Inter-Agency Comments on Draft 2008 CUE NPRM

July 12, 2007

p. 16, CEQ Comment: What is NPMA?

p. 17, The Agency is proposing to amend the table of critical uses
based, in part, on the technical analysis contained in the 2008 U.S.
nomination that assesses data submitted by applicants to the critical
use exemption program as well as public and proprietary data on the use
of methyl bromide and its alternatives. CEQ Comment: Where is this
available?  Would be helpful to have this referenced or available since
specific comment are requested on it.

p. 17, EPA is seeking comment on the aforementioned analysis and, in
particular, any information regarding changes to the registration or use
of alternatives that may have transpired after the 2008 U.S.  CEQ
Comment: Request for comments are scattered throughout the Notice. 
Would help immensely to have list of comments in one section.

p. 18, USDA Comment:  It is time to propose and finalize a domestic
Emergency Exemption rule to conform with the provisions of the Montreal
Protocol.  Failure to do so places CUE users at risk if they move to an
alternative, and then have the use of that alternative restricted.

p.18, DOS Comment: what about the recent NPMA letter on cocoa- how does
that change the table for critical uses and the amounts allocated?

p. 23, Comment about limiting critical conditions for Dry Cured Pork
Products: As there are no alternative treatments, doesn’t the presence
of these pests constitute a “severe” infestation requiring
treatment?

p. 24, removing California from the approved locations for pepper
growers because the United States Government did not support this
location in its 2008 Critical Use Nomination; CEQ Comment: What does
“USG did not support this location” mean?  Reads like it is
arbitrary?

p. 24, Section V.D.5. also explains the reasoning for and implications
of EPA’s use of the term “field trial purposes” in this proposed
action, instead of the term “research purposes,” which EPA used in
previous CUE rulemakings. CEQ Comment: This sentence appears out of
place here. Might consider one section on “changes from previous
rulemakings.”

p. 26, In this section, EPA proposes to change certain aspects of the
Agency’s approach for determining the amount of methyl bromide that
may be produced or imported for critical uses each year, and the amount
of material that may be sold from stocks for critical uses each year. 
CEQ Comment: Should this be “this action”?  Also, why are there
changes? –based on comments received, problems with last years
approach, etc.  

p.28, USDA comment: However, the provisions of the CAA amendments of
1998 also require EPA to be no more restrictive than as required by the
Parties to the Montreal Protocol.  For this reason, the Agency continues
to propose and grant these CUEs while taking available stocks into
account.

p.28, USDA Comment: This aggregated amount, however, does not address
the physical availability (location), or form (100% technical methyl
bromide versus methyl bromide formulated with chloropicrin) of methyl
bromide held in stocks.

p. 29, Given this uncertainty, and the continuing decline in inventory
levels, EPA is exercising caution in this year’s CSA allocation.  EPA
will consider various approaches to this issue in the future based on
the data received during this notice and comment rulemaking process and
other information obtained by the Agency” (71 FR 75399).  CEQ Comment:
First, wording “exercising caution” is awkward for a rulemaking;
second, this appears contradictory with what is being done since the
proposal is recommending taking MORE from the stockpile/inventory than
recommended by the Parties.

p.30, DOS Comment: the EPA data shows that mebr levels in 2008 will be
4754 MT or 19% of baseline- is that less than one year?

p. 30, DOS Comment: Not clear what intent of including the meeting
report language is. DOS recommends deleting mention of the 18th meeting
report

p. 30, “The Parties did not take a decision at the 18th MOP on whether
it would be appropriate for a member country to maintain a reserve, or
what size inventory would be adequate; however, in other instances,
namely the Essential Use Exemption process for CFC inhalers, the Parties
have allowed for working stocks up to one year’s supply (USDA
addition).”

p.31, The proposed methods for determining the critical use amounts,
described in Section V.D.2. and V.D.3. of this preamble, form a new
approach for determining how much critical use methyl bromide may be
produced and imported and how much may be sold to critical users from
existing inventories in a given year, should inventories be available
(DOS addition)

p. 31, Preamble: In addition to providing a clear and robust method for
determining CUE production and import levels, the proposed new approach
addresses the decline in methyl bromide inventories by considering the
amount of existing stocks that is available for critical uses. in a
manner that better reflects what may be reasonably available within a
future control period based on data collected from an earlier control
period (USDA addition).

USDA comment: The Agency has previously considered the amount
“available”, so this in itself is not new.

p.33, EPA is considering new information it has gathered about the
availability of stocks for critical uses, because that information helps
the Agency balance the environmental and economic implications of
exempting amounts of methyl bromide production, importation, and
consumption for critical uses.  CEQ Comment: What new information;
should reference source.

p. 33, EPA’s proposed methodology for calculating the amount of
available stocks can be expressed as follows: AS = ES – D – SCF,
where AS = available stocks ; ES = existing stocks of methyl bromide
held in the United States by producers, importers, and distributors on
January 1, 2007; D = estimated drawdown of existing stocks during
calendar year 2007; and SCF = a supply chain factor, the calculation of
which is described below and in more detail in the Technical Support
Document available in the public docket for this rulemaking. CEQ
Comment: Since proposing to use for subsequent years, shouldn’t this
be “previous calendar year” and not specify exact year? NOTE –
used “year in question” later in document

p. 34, Where AS = ES – D – SCF formula is described

USDA comment: This formula fails to take into account that Post-harvest
sectors require only pure (100% technical) methyl bromide that is NOT
formulated with chloropicrin.  Failure to account for existing stocks so
formulated will potentially place post-harvest users at risk of
undersupply using this calculation, unless separate calculations are
made for the various sectors, including the geographic distribution of
such stocks.

p. 34, The term “existing stocks” does not include methyl bromide
produced under the exemption for quarantine and preshipment (QPS),
methyl bromide produced with Article 5 allowances to meet the basic
domestic needs of Article 5 countries, or methyl bromide produced for
feedstock or transformation purposes.  CEQ Comment: How much is this
annually?  Is it a small percentage of total produced?

p. 34, USDA addition: Such amounts have been removed from the
calculation of existing stocks from which the “available stocks”
were estimated.

p. 34-35, EPA CHANGE: The paragraph about the drawdown estimate revised
to clarify EPA’s estimation methods.  Certain years and numbers were
corrected, as they were incorrect due to a version-control problem.

p. 35, EPA estimates that following an unforeseen shutdown of the
domestic production facility, it would take 6-12 months to restart
production, but only 15 -weeks for significant imports of methyl bromide
to reach the U.S.  CEQ Comment: Add (About 4 months)” to relate to the
6-12 months.

p. 35, Preamble: EPA estimates that following an unforeseen shutdown of
the domestic production facility, it would take 6-12 months to restart
production, but only 15-weeks for significant imports of methyl bromide
to reach the U.S.

USDA Comment: Based on limited foreign production, is 15 weeks equally
applicable to the East and West Coasts?  What is the expected
transportation cost differential? (e.g. all ocean shipping versus
ocean/transcontinental truck or ocean/transcontinental rail/truck)

p.37, USDA Comment: Recall that existing formulated stocks would not be
available to Post-harvest users, regardless of the cause of any supply
disruption.  Also, even if a manufacturing or other storage facility had
a catastrophic loss of product (e.g. tank failure) without losing
production capacity, there is a need to replace this product into the
supply chain within the control period for which the product was
produced.

p. 38, Furthermore, factors such as the small number of methyl bromide
production facilities around the world, and the continued drawdown of
existing methyl bromide inventories make a major supply disruption
possible an issue for Agency consideration (DOS insertion).

p.39, Furthermore, factors such as the small number of methyl bromide
production facilities around the world, and the continued drawdown of
existing methyl bromide inventories make a major supply disruption
possible more likely than before due to more limited global production
capacity.

p.39, USDA Comment: Define this or bring a number to the proposal. 
Although previous capacity may have existed, it is difficult to say what
can be brought back online in a given period of time.  As these
decisions are made on the basis of cost-effectiveness, independent
companies may not view the recommissioning of a moth-balled plant as
being cost-effective for 6 months unless they are controlled by the same
entity that lost the capacity!!

p. 39, In fact, EPA estimates that in the event of a plant production
failure, importing methyl bromide from abroad is likely to be the
fastest and most practical way to replace the lost production (but not
necessarily the most cost-effective over the long-run).

p.43, USDA Comment: Because of the time-lag between the decision of the
Parties and the beginning of the control period for which the decision
applies, it has been the experience of the United States that the level
of inventories cannot be known with certainty in advance.  Even when the
allocation rule for a control period is

p., 45, USDA Comment: The provisions of the Montreal Protocol concerning
the use of existing stocks fails to recognize that perfect information
about the status of closing stocks from one control period are not
available instantaneously at the beginning of the next control period. 
An overly aggressive allocation of estimated stocks could result in a
failure to meet the legitimate approved needs of CUE users if the
estimates proved to be too optimistic.  As there is no provision in the
Protocol to ask for a revised production allocation within the control
period (and no practical means within the domestic rulemaking framework
employed by EPA to reallocate from CSAs to CUAs), it is imperative that
EPA not overallocate CSAs and underallocate CUAs for FUTURE control
periods, including 2008.  This supports EPA’s ongoing efforts to
determine what constitutes “available stocks”.

p. 45, DOS Comment: Equating "available" with "existing" would read the
relevant language out of IX/6, effectively replacing "methyl bromide is
not available in sufficient quality and quantity from existing stocks"
with "there are existing stocks."  Such a reading would not be true to
the negotiated text, therefore we would not simply replace
“existing” with “available” in terms of our discussion of
amounts from stocks.  Another possible line of argument might include:
Decision IX/6 states that stocks should be used if they are "available
in sufficient quality and quantity from existing stocks."  Thus, a
determination has to be made about whether existing stocks are of
"sufficient quality and quantity" to meet the CUE need.  This is the
essence of "availability" -- looking at the existing stocks to determine
whether they are "available" to end-users, both in quality (that is, the
right formulation for end-users) and in quantity (that is, enough to
actually reach the end-users).  When determining whether there is
sufficient quantity available to end-users, using a supply-chain factor
would therefore be an appropriate means to reach such a determination.

p. 47, DOS proposes deleting: For example, EPA anticipates that that at
the 19th Meeting of the Parties in September 2007, the Parties may
discuss the future when it is likely that there will be no more, or very
little, pre-phaseout inventory remaining.  At this point in time EPA is
not proposing specific approaches that the Agency might take when
pre-phaseout inventories are gone.  EPA is, however, seeking advance
comment on approaches that the Agency might consider when very little or
no pre-phaseout inventory remains.

DOS Comment: Is this part necessary- EPA already stated how they will
use the formula even when AS is less than authorized level

p. 48, As described in the Framework Rule, after applying this reduction
to the total volumes of allowable new production or import, EPA is
pro-rating critical use allowances (CUAs) to each company based on their
1991 baseline market share.  CEQ Comment: Was this done in past years or
is it a change?

p. 49, USDA Comment: For 2008, EPA is proposing to reduce the total
level of new production and import for critical uses by 539,428 kg to
reflect the total level of carry-over material available at the end of
2006 unless reliable information is provided to show that this
overestimates the carryover from 2006.

p. 50, USDA Comment: Does this cover QPS and CUE research conducted
solely in a laboratory?

p. 50, USDA Comment: Would the term “CUE field efficacy trial” be
better suited to describe both pre-plant and post-harvest research uses
outside of a laboratory?

p. 50, A common example of a field trial use of methyl bromide is an
experiment that requires methyl bromide as a standard control treatment
with which to compare the trial alternatives’ results that occurs
outside of a laboratory.  

p. 51, USDA Comment: Does this apply to work looking solely at QPS uses?

p. 51, DOS Comment: Can EPA clarify the timeline on this point- when did
we begin imposing a transition rate in the nominations???

p.51, DOS Comment: delete “finalized from the phrase “finalized
transition rates”

p. 52, USDA Comment: NPMA Cocoa:  Are we waiting for NPMA to provide
comments on the amount they believe they can reduce their use in 2007
before making any adjustments?

p. 52, USDA Comment: Furthermore, the 2009 CUN, which represents the
most recent analysis and the best available data for methyl bromide
alternatives, does not conclude that transition rates should be
increased for 2008 (except, possibly for a one-time adjustment for NPMA
cocoa).

p. 53, USDA Comment: In section V.C. the Agency is soliciting comments
from the public on the technical [and economic?] basis for determining
that the uses listed in this proposed rule meet the criteria of the
critical use exemption (CUE).

p. 53, USDA Comment: Based on the way this is worded, does this require
applicants to reestablish their claims for a CUE, or is EPA merely
trying to solicit alternative comments to its analysis, and the Decision
of the Parties, that the CUE sectors in this proposed rule meet the
criteria of a CUE?  Why not economic basis as well?

p. 54, DOS Change: Users of methyl bromide should make every effort to
decrease minimize overall emissions

p. 54, DOS Comment: 1) What about VIF/metalized films research underway
in Florida etc.- we should include a paragraph on these significant
developments in this section and perhaps describe how new  information
in this area will be considered?  2) In recent decisions, we indicated
that we'd request the use of these kinds of technologies- it would be
helpful to rephrase the preambular language to make this request  on the
understanding that compliance is obviously voluntary.

p. 56, USDA Comment: Has TriCal actually submitted any data showing that
it has sold Post-Harvest CUAs since 2005 or is this an artifact of the
original global allocation of CUA to each of the four
producers/importers?  Although this is only a 0.4% difference for the
post-harvest sector, this could become more important as production
amounts become ever smaller.

p. 58, USDA Comment: Will EPA check to see that the CSA amount allocated
to a company does not exceed the amount of existing stock detailed in
its 2006 report to EPA?  Will EPA utilize its “least squares”
analysis to estimate drawdown from existing stocks by each entity
reporting ending stocks in 2004, 2005 and 2006, and thereby determine
whether any stock is likely to be held by an individual company at the
end of 2007 for use in 2008?

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