SUPPORTING STATEMENT FOR THE

RENEWABLE FUELS STANDARD (RFS2) PROGRAM (FINAL RULE)

(DRAFT – November 2012)

A.	JUSTIFICATION

1.	Identification of the Information Collection

a.	Title:  Renewable Fuels Standard (RFS2) Program, EPA ICR No.
2380.01,OMB Control Number  2060-0637.

 

b. 	Short characterization:

 

	The Energy Policy Act (EPAct) of 2005 amended the Clean Air Act,
section 211(o), and required the existing RFS program.  The existing RFS
program is referred to in this supporting statement as "RFS1". The RFS1
program started  in 2006 and was covered by EPA ICR No. 2242.02, OMB
Control Number 2060-0600. Please refer to “Regulation of Fuels and
Fuel Additives: Renewable Fuel Standard Program – Notice of Proposed
Rulemaking” and “Regulation of Fuels and Fuel Additives: Renewable
Fuel Standard Program – Final Rule” (both available in docket number
EPA-HQ-OAR-2005-0161) for a detailed discussion of the RFS1 program.

	The Energy Independence and Security Act (EISA) of 2007 further amends
the Clean Air Act, section 211(o), and has required EPA to propose new
regulations for renewable fuels.  The new RFS program is referred to in
this supporting statement as "RFS2."  Under RFS2, the volume requirement
and types of renewable fuels are expanded; non-road uses are included
(RFS1 only affected motor vehicle fuel); there are additional types of
waivers and special provisions for renewable fuel types; and EPA has
implement an EPA-Moderating Transaction System (EMTS) for RINs. 
Additional parties will be required to register, keep records, and
report.  Please refer to the Final Rule (available in docket number
EPA-HQ-OAR-2005-0161) for a detailed discussion of the RFS2 program.   

This supporting statement provides tables that break down reporting
items by party (e.g. producer, importer, refiner, etc.,) and the cost
related to their reporting activity. For compliance purposes, under 
RFS2, volumes of renewable fuel are identified through the use of
renewable identification numbers (RINs) that are initially generated by
the producer of the renewable fuel.  However, there are additional types
of RINs and the volume of RINs traded is expected to be great.

	The Regulatory Impact Analysis (RIA), which was prepared for the Final
Rule, has been placed in the public docket.  The document was consulted
to provide additional detailed information about the regulated universe
(see Chapter 1 of the draft RIA). We also considered the actual number
of reporting parties under FRS1 and similar reporting programs.  

	

	   

2.  Need For, and Use of, the Collection

Authority for the Collection

	Sections 114 and 208 of the Clean Air Act (CAA), 42 U.S.C. §§ 7414
and 7542, authorize EPA to require recordkeeping and reporting regarding
enforcement of the provisions of Title II of the CAA.  

	

	b. 	Practical Utility/Uses of the Data

	The recordkeeping and reporting requirements of this regulation will
allow EPA to monitor compliance with the RFS program.

3.  Non-duplication, Consultation, and other Collection Criteria

	a. 	Non-duplication

	Efforts have been made to eliminate duplication in this information
collection.

	

b. 	Public Notice

		A Notice will be published in the Federal Register for comments.

	c. 	Consultations

	We have drawn upon our experience with RFS1 and with similar fuels
regulations to develop the estimates in this supporting statement. 
Interested parties may also be interested in reviewing "Chapter 1 –
Industry Characterization" of the draft Regulatory Impact Analysis (RIA)
available in the public docket.  Some assumptions from the RIA were used
for this supporting statement.

	

	d. 	Effects of Less Frequent Data Collection

	We have designed the reporting schedule to coincide with existing
reporting deadlines applicable to many of the same parties under such
programs as RFG (Reformulated Gasoline) and anti-dumping and diesel
fuel.  Less frequent collection of data would make it impossible to
carry out the provisions of the CAA and EISA.    

	e. 	General Guidelines

	This rule does not exceed any of the OMB guidelines.

	

f. 	Confidentiality

	We inform respondents that they may assert claims of business
confidentiality (CBI) for information they submit. Actual RINs should
not be treated as confidential business information under RFS2, as they
are necessary identifiers to accompany renewable fuels.  Any information
claimed as confidential will be treated in accordance with 40 CFR Part 2
and established Agency procedures.  Information that is received without
a claim of confidentiality may be made available to the public without
further notice to the submitter under 40 CFR § 2.203.

g. 	Sensitive Information

	

	This information collection does not require submission of any
sensitive information.

4.	The Respondents and the Information Requested

		Respondents/with NAICS and SIC Codes

The respondents to this information collection fall into the following
general industry categories:  petroleum refineries (324110/2911), ethyl
alcohol manufacturers (325193/2869), other basic organic chemical
manufacturing (325110/2869), chemical and allied products merchant
wholesalers (426990/5169), petroleum bulk stations and terminals
(422710/5171), petroleum and petroleum products merchant wholesalers
(422720/5172), and other fuel dealers (454319/5989).  

	Using the terminology associated with the RFS2 Rule, we have assumed
the following classes of party, which are covered by this supporting
statement.  

Producers of renewable fuels

Importers

Obligated Parties

Parties who own RINs (including foreign RIN owners)

 

5.  The Information Collected, Agency Activities, Collection
Methodology, and Information Management

a.	Agency Activities

All reports and registrations will be reviewed by EPA for completeness
and for potential violations.

Potential violations will be referred to enforcement personnel.

Registration numbers will be issued for new registrants.

Contacting reporting parties if there is a problem with their
submission.

b. 	Collection and Methodology and Management

EPA wants to continue to receive all reports, registrations, initial
registrations and updates. We anticipate receiving data in a simplified
and secure fashion via the Agency's electronic Central Data Exchange
(CDX).  Information claimed as CBI will be stored in appropriately
controlled areas.

c.	Small Entity Flexibility

	This collection will not adversely affect small entities.   Flexibility
provisions are available to small entities.

d.	Collection Schedule

	Registrations are received on a rolling basis.  Updates may be sent in
at any time after initial registration.  New parties may enter the
regulated industry at any time, triggering registration requirements.  
Petitions for new renewable fuels and pathways are also being received.

6.	Estimating the Burden and Cost of Collection

a.	Estimating the Respondent Universe

	We drew upon experience implementing similar regulations among the same
entities to develop estimates of the burden associated with this
collection.  

b.	Estimating the Respondent Burden and Cost

	Three labor categories are involved:  managerial (includes legal and
professional review), technical, and clerical. The estimates used the
Bureau of Labor Statistics figures from "National Industry-Specific
Occupational Employment & Wage Estimate “Petroleum and Coal Products
Manufacturing” (May 2011), with a 3% annual inflation factor applied
to bring the values to the present.  Using this method, the following
wages and benefits apply by category:

Wages and Benefits

Managerial    		$67.44   per hour

Technical		$65.56  per hour

Clerical		$22.17  per hour

Doubling for company overhead beyond wages and benefits, and for
convenience, rounding up to the dollar, gives the following rates for
this ICR:

Total Employer Cost

Managerial		$135.00  per hour

Technical		$131.00  per hour

Clerical		$   44.00  per hour

It is assumed that for each hour of activity the mix will be about 0.1
hour managerial, 0.7 hour technical, and 0.2 hour clerical.  This gives
an average labor cost of $103 per hour, which will be used in this ICR.
For purchased services related to attest engagements and some items of
registration, we have doubled this hourly cost to $206 in order to more
accurately reflect the cost of a certified public accountant (CPA) or
licensed professional engineer's (PE) services.

The estimates by party are indicated in Tables I –V below.

c.  	Estimating the Agency Burden and Cost  

	EPA must generate company and facility registration number(s) for new
registrants and notify them of these numbers, which must appear on
reports. Report formats and instructions/guidance must be prepared by
Agency personnel.  Reports will be processed by contractors and must be
reviewed by Agency personnel.  Reporting parties must be contacted if
there is a problem with their submission. We have developed forms for
RFS2 reporting to include four types, rather than one type, of RIN
unlike the RFS1 templates. We have provided RFS2 reporting templates as
an attachment to this document.

 

This supporting statement considers all Agency costs associated with
accepting new registrants and new reports associated with RFS2, as
expressed in EPA ICR Number 2333.02. Using the RFS1, and the RFG and
anti-dumping ICR, and other recent fuels-related ICRs as a guide in
developing these initial estimates for RFS, we anticipate that RFS2 may
require the equivalent labor of one full time GS-13 technical employees
for a total of $115,000, and labor costs of $54,875 in the clerical
category and $19,438 in the management category.  Since we are using the
CDX, some costs incurred by the Agency will be tied to the number of
registrants who send us reports.  Specifically, there is an annual
"subscription cost" associated with the use of CDX that is passed on to
the EPA program office and we estimate that registrants due to RFS2 will
cost our office approximately $200,000 per year in 2013, 2015 and 2015. 
We anticipate $266,666 in annual contract costs related to registration
and reporting activities.  We anticipate IT development and testing
costs at $ 600,000 divided by three years to yield an annual cost of
$200,000.  Adding the following values results in an annual estimated
Agency burden as follows:

One GS-13 technical employee (full time) = 		$   115,000

One GS-7 clerical worker (full-time) 	 = 	      	       54,875

One GS-15 manager (1/8 time) 	 = 		       19,438

Annual CDX subscription fee = 			     200,000

Annual contract costs = 				     266,666

Testing and development= 				     200,000

TOTAL = 						   $855,979

  As with all items in this supporting statement, we strongly encourage
comment on the estimated Agency burden and on the Agency activities
associated with this proposed information collection.    

	  

d.	Estimating the Respondent Universe

	We were able to estimate the number of regulated entities drawing upon
experience regulating the same or similar entities.  

e.	Bottom Line Burden Hours and Costs

	From the tables, we estimate the following  annual totals:

TOTAL NO. OF RESPONDENTS:    				  6,065

TOTAL NO. OF RESPONSES:					  6,065

TOTAL BURDEN HOURS:    	    				52,095

TOTAL COST TO RESPONDENTS:  		                $ 8,010,130

f.	Reason for Change in Burden

	This decrease came due to the change in the respondent universe.  Two
obligated parties categories, the importers of renewable fuels and any
party who own/intend to own RINs which include blenders, brokers and
marketers dropped significantly.  Importers dropped from 360 respondents
to 270 and any party who own/intend to own RINs which include blenders,
brokers and marketers dropped from 3000 respondents to 1650 thus
lessening the reporting burden. The number of respondents by these two
parties decreased by a total  of  6,638  responses and 7530 hours.  

 

g.	Burden Statement

	The annual public reporting and recordkeeping burden for this
collection of information is estimated to be 7.9 hours per response
(total number of hours divided by total number of responses).  Burden
means the total time, effort, or financial resources expended by persons
to generate, maintain, retain, or disclose or provide information to or
for a Federal agency.  This includes the time needed to review
instructions; develop, acquire, install, and utilize technology and
systems for the purposes of collecting, validating, and verifying
information, processing and maintaining information, and disclosing and
providing information; adjust the existing ways to comply with any
previously applicable instructions and requirements; train personnel to
be able to respond to a collection of information; search data sources;
complete and review the collection of information; and transmit or
otherwise disclose the information.  An agency may not conduct or
sponsor, and a person is not required to respond to, a collection of
information unless it displays a currently valid OMB control number. 
The OMB control numbers for EPA's regulations are listed in 40 CFR part
9 and 48 CFR chapter 15.     

	To comment on the Agency's need for this information, the accuracy of
the provided burden estimates, and any suggested methods for minimizing
respondent burden, including the use of automated collection techniques,
EPA has established a public docket for this ICR under Docket ID number
EPA-HQ-OAR-2005-0161, which is available for online viewing at  
HYPERLINK  "http://www.regulations.gov/"  www.regulations.gov ,or in
person viewing at the Air Docket in the EPA Docket Center in Washington,
DC (EPA/DC).  The docket is located in the EPA West Building, 1301
Constitution Avenue, NW, Room 3334, and is open from 8:30 a.m. to 4:30
p.m., Eastern Standard Time, Monday through Friday, excluding legal
holidays.  The telephone number for the Reading Room is (202) 566-1744,
and the telephone number for the Air Docket is (202) 566-1742.

	

	You may use www.regulations.gov to submit or view public comments,
access the index listing of the contents of the public docket, and to
access those documents in the public docket that are available
electronically.  When in the system, select “search,” then key in
the Docket ID Number EPA-HQ-OAR-2005-0161.  Also, you can send comments
to the Office of Information and Regulatory Affairs, Office of
Management and Budget, 725 17th Street, NW, Washington, D.C. 20503,
Attention: Desk Officer for EPA.  Please include the EPA Docket ID
Number EPA-HQ-OAR-2005-0161 and OMB Control Number 2060-0637 in any
correspondence.

.       

 These estimates are derived from "OPM Salary Table 2012-DCB," effective
January 2012.  This table may be found at
http://www.opm.gov/oca/06tables/indexGS.asp.  The extreme of step 10 was
assumed for all categories.  We have assumed a half-time GS-7 clerical
worker, one full-time GS-13 technical worker, and a GS-15 manager
working one-eighth of his/her time managing this project (0.125).  All
values were multiplied by 1.6 (which is a common factor utilized in ICRs
to account for overhead costs). We rounded the resulting dollar value to
the nearest thousand.  This cost is per year.

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