appendix d draft environmental analysis low carbon fuel standard alternative diesel fuel regulations

279 Pages·2014·0.91 MB·English

APPENDIX D

DRAFT
ENVIRONMENTAL ANALYSIS

FOR THE
LOW CARBON FUEL STANDARD

AND
ALTERNATIVE DIESEL FUEL
REGULATIONS
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APPENDIX D
Draft Environmental Analysis
Prepared for the
Low Carbon Fuel Standard and
Alternative Diesel Fuel Regulations

Air Resources Board
1001 I Street
Sacramento, California, 95812

Date of Release: January 2, 2015
Low Carbon Fuel Standard and Table of Contents
Alternative Diesel Fuel Regulations
Draft Environmental Analysis
TABLE OF CONTENTS
1.  INTRODUCTION AND BACKGROUND .............................................................. 1 
A.  Background on Low Carbon Fuel Standard and Alternative Diesel
Fuel Regulations ............................................................................................ 1 
B.  Objectives of the Proposed LCFS and ADF Regulations ............................... 2 
C.  Scope of Analysis and Assumptions .............................................................. 3 
D.  Organization of the Environmental Analysis .................................................. 4 
E.  Environmental Review Process ..................................................................... 5 
2.  PROJECT DESCRIPTION ................................................................................... 8 
A.  Background Information on Proposed Low Carbon Fuel Standard
Regulation ...................................................................................................... 8 
B.  Background Information on Proposed Alternative Diesel Fuel
Regulation .................................................................................................... 10 
C.  Essential Concepts ...................................................................................... 10 
D.  Low-Carbon Fuel Types and Sources .......................................................... 16 
E.  Provisions to Opt Into the Low Carbon Fuel Standard Program .................. 23 
F.  Commercialization of Alternative Diesel Fuels ............................................. 25 
G.  Compliance Response Scenario .................................................................. 26 
3.  ENVIRONMENTAL AND REGULATORY SETTING ......................................... 36 
4.  IMPACT ANALYSIS AND MITIGATION MEASURES ....................................... 37 
A.  Basis for Environmental Impact Analysis and Significance
Determinations ............................................................................................. 37 
B.  Impact Analysis and Mitigation Measures .................................................... 39 
5.  CUMULATIVE AND GROWTH-INDUCING IMPACTS .................................... 103 
A.  Approach to Cumulative Analysis .............................................................. 103 
B.  Significance Determinations and Mitigation ............................................... 105 
C.  Cumulative Impacts by Resource Area ...................................................... 105 
C.  Growth-Inducing Impacts ........................................................................... 125 
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Low Carbon Fuel Standard and Table of Contents
Alternative Diesel Fuel Regulations
Draft Environmental Analysis
6.  MANDATORY FINDINGS OF SIGNIFICANCE ................................................ 126 
A.  Mandatory Findings of Significance ........................................................... 126 
7.  ALTERNATIVES ANALYSIS ........................................................................... 129 
A.  Approach to Alternatives Analysis .............................................................. 129 
B.  Project Objectives ...................................................................................... 130 
C.  Description of Alternatives ......................................................................... 130 
8.  REFERENCES ................................................................................................. 138 

Attachments
Attachment 1: Environmental and Regulatory Setting
Attachment 2: Summary of Environmental Impacts and Mitigation Measures
Tables
Table 2-1: Carbon Intensity Reduction Requirements through 2020 ............................. 10 
Table 2-2: Di-Tert Butyl Peroxide (DTBP) Mitigation Control Level ............................... 26 
Table 2-3: Illustrative California Reformulated Gasoline Blendstock for Oxygenate
Blending Source Types through 2020 .......................................................... 28 
Table 2-4: Illustrative Alternative Diesel Fuel Source Types through 2020 ................... 29 
Table 2-5: Global Ethanol Trade ................................................................................... 30 
Table 2-6: Global Biodiesel Trade ................................................................................. 30 
Table 2-7: U.S. Biofuels Production and Consumption ................................................. 32 

Table 4-1: NOx emissions 2014-2022 ........................................................................... 52 
Table 4-2: Well-to-Wheel Life Cycle Analysis of Transportation Fuels (Current LCFS
Regulation) .................................................................................................. 62 
Table 4-3: Projected LCFS GHG Emissions Reductions ............................................... 71 
Table 4-4: Land Cover Changes due to Expansion of U.S. Corn Ethanol, U.S. Soybean
Biodiesel, and Sugarcane Ethanol in Brazil in One Year ............................. 88 

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Low Carbon Fuel Standard and Chapter 1
Alternative Diesel Fuel Regulations Introduction and Background
Draft Environmental Analysis
1. INTRODUCTION AND BACKGROUND
A. Background on Low Carbon Fuel Standard and Alternative Diesel Fuel
Regulations
Executive Order S-01-07, ordering the establishment of the Low Carbon Fuel Standard
(LCFS), calls for a reduction of at least 10 percent in the carbon intensity (CI) of
transportation fuels sold for use in California by 2020 as one of the measures to meet
the reductions in statewide greenhouse gas (GHG) emissions mandated by the
California Global Warming Solutions Act of 2006 (Assembly Bill (AB) 32, codified at
Health and Safety Code section 38500 et seq.). Under the LCFS, CI is an expression of
the combined carbon emissions from all production, distribution, and consumption steps
in the life cycle of a transportation fuel —steps that occur due to demand for and
consumption of transportation fuels in California. The LCFS is a performance-based and
fuel-neutral standard that allows the market to determine how the overall CI of
California’s transportation fuels would be reduced. Implementation of the LCFS
regulation is intended to decrease GHG emissions from transportation fuels and to
realize additional benefits, including diversification of the State’s fuels portfolio, reduced
dependence on petroleum and the associated economic impacts of gasoline and diesel
price spikes, greater innovation and development of cleaner fuels, and support for
California’s ongoing efforts to improve ambient air quality. The reductions in CI by 2020
are also expected to set the stage for greater changes in the State’s transportation fuel
portfolio in subsequent years.
On April 23, 2009, the California Air Resources Board (ARB or the Board) approved the
original LCFS regulation for adoption. The regulation became effective on
January 12, 2010, additional provisions became effective on April 15, 2010. The first
year of the program, 2010, was intended solely as a reporting year for regulated parties
to begin acclimating to the recordkeeping, reporting, and other administrative provisions
by using the LCFS Reporting Tool and filing demonstrations of pathways. Actual
implementation of the CI requirements began on January 1, 2011. The Board amended
crude oil and other provisions in the original LCFS regulation in 2011, and those
amendments took effect November 26, 2012.
In December, 2009, POET, LLC initiated litigation alleging that ARB violated the
California Environmental Quality Act (CEQA) and Administrative Procedure Act (APA) in
adopting the LCFS. On July 15, 2013, the State of California Court of Appeal, Fifth
Appellate District (Court) issued its opinion in POET, LLC v. California Air Resources
Board (2013) 218 Cal.App.4th 681 (POET vs. ARB). Although the Court found there
were CEQA and APA issues associated with the original adoption of the regulation, the
Court left the LCFS in place, holding that ARB could continue to implement and enforce
the 2013 regulatory standards until ARB could consider re-adoption of the regulation.
Specifically, the Court held that a proposal to address potentially significant impacts of
nitrogen oxides (NO ) associated with biodiesel use through a future rulemaking
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Low Carbon Fuel Standard and Chapter 1
Alternative Diesel Fuel Regulations Introduction and Background
Draft Environmental Analysis
constituted improperly deferred mitigation. The proposed regulation on the
commercialization of alternative diesel fuels (ADF) (hereinafter referred to as the
“proposed ADF regulation”) includes in-use requirements and fuel specifications for
biodiesel that would, among other things, ensure that the proposed LCFS regulation
would not result in increased NO emissions compared to current conditions and also
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ensure that past increases in NO emissions from biodiesel in comparison to ARB
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diesel emissions would be eliminated by 2020. The proposed ADF regulation would also
establish a regulatory process for other new, emerging diesel fuel substitutes to enter
the commercial market in California, while managing and minimizing environmental and
public health impacts and preserving the emissions benefits derived from ARB vehicle
and fuel regulations.
To address the Court’s 2013 ruling and achieve the State’s objectives with the two
regulations, ARB staff is proposing that the Board take the following actions in 2015: (1)
set aside adoption of the existing LCFS regulation; (2) re-adopt the newly proposed
LCFS regulation (including revisions to the original regulation); and (3) adopt the
proposed ADF regulation. ARB staff is proposing a suite of revisions to the existing
LCFS regulation as part of the re-adoption which would promote investments in and
production of the cleanest fuels, offer additional flexibility, update critical technical
information, and provide for improved efficiency and enforcement of the regulation. The
proposed LCFS regulation with revisions (hereinafter referred to as the “proposed LCFS
regulation”), and the proposed ADF regulation are analyzed in this Environmental
Analysis (EA) to meet CEQA requirements under ARB’s certified regulatory program.
The proposed LCFS and ADF regulations will be considered by the Board in separate
proceedings. However, the two regulations are being analyzed as one project under
CEQA because they are interrelated in two important ways: 1) the proposed ADF
regulation defines specifications for biodiesel, which is among the low-carbon fuels that
LCFS encourages, and 2) compliance responses by fuel producers and suppliers would
be influenced concurrently by both regulations. Assessing them together captures the
compliance responses, which are the physical actions reasonably expected to occur in
response to the proposed regulatory action, without regard to whether they are
attributable to the LCFS, ADF, or a combination of the two proposed regulations. This
approach is consistent with CEQA’s requirement that an agency consider the whole of
an action when it assesses a project’s environmental effects, even if the project consists
of separate approvals (Title 14 of the California Code of Regulations [14 CCR],
hereafter “CEQA Guidelines”, Section 15378(a)).
B. Objectives of the Proposed LCFS and ADF Regulations
The objective of the proposed LCFS regulation is to reduce the CI of transportation fuels
in the California market by at least 10 percent of its 2010 level by 2020. The lower CI is
expected to reduce GHG emissions from the State’s transportation sector by about 35
million metric tons (MMT) during 2016-2020 and achieve other important benefits as
well, including greater diversification of the state’s fuel portfolio, a reduced dependence
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Low Carbon Fuel Standard and Chapter 1
Alternative Diesel Fuel Regulations Introduction and Background
Draft Environmental Analysis
on petroleum and a decrease in the associated economic impacts of gasoline and
diesel price spikes caused by volatile oil price changes, greater innovation and
development of cleaner fuels, and support for California’s ongoing efforts to improve
ambient air quality. The reductions in CI by 2020 are expected to account for almost
20 percent of the total GHG emission reductions needed to meet the AB 32 mandate of
reducing California’s GHG emissions to 1990 levels by 2020 and are also expected to
set the stage for greater changes in the State’s transportation fuel portfolio in
subsequent years.
The primary objective of the proposed ADF regulation is to establish a comprehensive
path to bring new or emerging diesel fuel substitutes to the commercial market in
California as efficiently as possible while preserving or enhancing public health, the
environment, and the emissions benefits of the State’s existing diesel regulations. The
proposed ADF regulation also establishes specific rules governing the use of biodiesel
fuel to ensure its use would meet the program goals of protecting public health and the
environment.
C. Scope of Analysis and Assumptions
The degree of specificity required in a CEQA document corresponds to the degree of
specificity inherent in the underlying activity it evaluates. Environmental analysis for
broad programs cannot be as detailed as for specific projects (CEQA Guidelines
15146). For example, the assessment of a construction project would naturally be more
detailed than for the adoption of a plan because the construction effects can be
predicted with a greater degree of accuracy (CEQA Guidelines 15146 (a)). This analysis
addresses a broad market-based regulatory program, so a general level of detail is
appropriate, however, thisEA makes a rigorous effort to evaluate significant adverse
impacts and beneficial impacts of the regulatory program and contains as much
information about those impacts as is currently available, without being unduly
speculative.
The scope of analysis in this EA is intended to help focus public review and comments
on the proposed regulations, and ultimately to inform the Board of the environmental
benefits and adverse impacts of the proposed action prior to Board action.This analysis
specifically focuses on potentially significant adverse and beneficial impacts on the
physical environment resulting from reasonably foreseeable compliance responses to
proposed changes to existing State regulations regarding fuel standards.
The analysis of potentially significant adverse environmental impacts from the proposed
LCFS and ADF regulations is based on the following assumptions:
1. This analysis addresses the potentially significant adverse environmental
impacts resulting from implementing the proposed LCFS and ADF regulations
compared to existing conditions, which include existing compliance with the
LCFS left in place by the Court at the 2013 regulatory standards.
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Alternative Diesel Fuel Regulations Introduction and Background
Draft Environmental Analysis
2. The analysis of environmental impacts and determinations of significance are
based on reasonably foreseeable compliance responses associated with the
proposed LCFS and ADF regulations; compliance with the existing State and
federal regulatory framework is considered part of the baseline of existing
conditions.
3. The analysis in this EA addresses environmental impacts both within
California and outside the State to the extent they are reasonably foreseeable
and do not require speculation.
4. The level of detail provided in each impact analysis is necessarily and
appropriately general, because the nature of the proposed LCFS and ADF
regulations is programmatic. Furthermore, industry decisions regarding the
specific location and design of new facilities and other infrastructure
undertaken in response to the proposed regulations are speculative, if not
impossible, to predict with precision, given the influence of other business and
market considerations in those decisions and the numerous locations where
those facilities might be built. Specific development projects undertaken in
response to the proposed LCFS and ADF regulations would undergo required
project level environmental review and compliance processes.
5. This EA generally does not analyze site-specific impacts when the location of
future facilities or other infrastructure is speculative. However, the EA does
examine regional (e.g., air basin) and local issues to the degree feasible
where appropriate. As a result, the impact conclusions in the resource-
oriented sections of Chapter 4, Impact Analysis and Mitigation Measures,
cover broad types of impacts, considering the potential effects of the full
range of reasonably foreseeable actions undertaken in response to the
proposed regulations. Chapter 5 provides a summary of potential cumulative
impacts of the proposed LCFS and ADF regulations.
D. Organization of the Environmental Analysis
The EA is organized into the following chapters to assist the reader in obtaining
information about the proposed LCFS and ADF regulations and their specific
environmental issues.
 Chapter 1, Introduction and Background – provides a project overview and
background information, and other introductory material.
 Chapter 2, Project Description – summarizes the proposed LCFS and
ADF regulations, implementation assumptions, and reasonably
foreseeable compliance responses taken in response to the proposed
regulations.
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Alternative Diesel Fuel Regulations Introduction and Background
Draft Environmental Analysis
 Chapter 3, Environmental and Regulatory Setting, in combination with
Attachment 1 – contains the environmental setting and regulatory
framework relevant to the environmental analysis of the proposed LCFS
and ADF regulations.
 Chapter 4, Impact Analysis and Mitigation – identifies the potential
environmental impacts associated with the proposed LCFS and ADF
regulations and mitigation measures for each resource impact area.
 Chapter 5, Cumulative and Growth-Inducing Impacts – identifies the
cumulative effects of implementing the proposed regulations against a
backdrop of past, present, and reasonably foreseeable future projects.
 Chapter 6, Mandatory Findings of Significance – discusses whether the
proposed regulations have the potential to degrade the quality of the
environment, cause substantial adverse impacts on human beings, and
cause cumulatively considerable environmental impacts.
 Chapter 7, Alternatives Analysis – discusses a reasonable range of
potentially feasible alternatives that could reduce or eliminate adverse
environmental impacts associated with the proposed regulations.
 Chapter 8, References – identifies sources of information used in this EA.
E. Environmental Review Process
1. Requirements under the California Air Resources Board Certified
Regulatory Program
ARB is the lead agency for the proposed LCFS and ADF regulations and has prepared
this EA pursuant to its CEQA-certified regulatory program. Public Resources Code
(PRC) Section 21080.5 allows public agencies with regulatory programs to prepare a
“functionally equivalent” or substitute document in lieu of an environmental impact report
or negative declaration once the program has been certified by the Secretary for
Resources Agency as meeting the requirements of CEQA. ARB’s regulatory program
was certified by the Secretary of the Resources Agency in 1978 (CEQA Guidelines
15251(d)). As required by ARB’s certified regulatory program, and the policy and
substantive requirements of CEQA, ARB has prepared this EA to assess the potential
for significant adverse and beneficial environmental impacts associated with the
proposed actions and to provide a succinct analysis of those impacts (17 CCR 60005(a)
and (b)). The resource areas from the CEQA Guidelines Environmental Checklist
(Appendix G) were used as a framework for assessing potentially significant impacts. In
accordance with ARB’s certified regulatory program for proposed regulations, this EA is
included in the Staff Report prepared for the rulemaking (17 CCR 60005).
ARB has determined that adoption and implementation of both the proposed LCFS and
ADF regulations is a “project” as defined by CEQA. Section 15378(a) of the CEQA
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