Guidelines for Voluntary Greenhouse Gas Reporting, 20784-20817 [06-3745]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 71, Number 77 (Friday, April 21, 2006)]
[Rules and Regulations]
[Pages 20784-20817]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-3745]



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Part III





Department of Energy





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10 CFR Part 300



Guidelines for Voluntary Greenhouse Gas Reporting; Final Rule

Federal Register / Vol. 71, No. 77 / Friday, April 21, 2006 / Rules 
and Regulations

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DEPARTMENT OF ENERGY

10 CFR Part 300

RIN 1901-AB11


Guidelines for Voluntary Greenhouse Gas Reporting

AGENCY: Office of Policy and International Affairs, U.S. Department of 
Energy.

ACTION: Final rule.

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SUMMARY: Section 1605(b) of the Energy Policy Act of 1992 directed the 
Department of Energy (DOE) to issue guidelines establishing a voluntary 
greenhouse gas reporting program. On February 14, 2002, the President 
directed DOE, together with other involved Federal agencies, to 
recommend reforms to enhance the Voluntary Reporting of Greenhouse 
Gases Program established by DOE in 1994. DOE issued interim final 
General Guidelines on March 24, 2005, and also on that date published a 
notice of availability inviting public comment on draft Technical 
Guidelines needed to fully implement the revised Voluntary Reporting of 
Greenhouse Gases Program. This notice of final rulemaking responds to 
public comments on the interim final General Guidelines and draft 
Technical Guidelines; sets forth the final General Guidelines; and 
announces the availability of the final Technical Guidelines.

DATES: Effective Date: The final General Guidelines and Technical 
Guidelines are effective June 1, 2006. The incorporation by reference 
of the Technical Guidelines is approved by the Director of the Federal 
Register as of June 1, 2006.

FOR FURTHER INFORMATION CONTACT: Mark Friedrichs, PI-40, Office of 
Policy and International Affairs, U.S. Department of Energy, 1000 
Independence Ave., SW., Washington, DC 20585, or e-mail: 
1605bguidelines.comments@hq.doe.gov

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
    A. Background
    B. Process for Implementing the Guidelines
II. Overview of Major Changes Made in Response to Comments
III. Discussion of Public Comments and the Final Revised Guidelines
    A. Implementation Schedule
    B. Process for Updating or Amending the Guidelines
    C. Distinction Between Reporting Under the Program and 
Registering Reductions
    1. Reporting Under the Program
    2. Registration Requirements
    D. Entity Definitions, Boundaries and Statements
    1. Entity Definition
    2. Entity Boundaries--General
    3. Entity Boundaries--U.S. and Non-U.S. Emissions
    4. Entity Statements
    E. Large v. Small Emitters
    F. Aggregators
    G. Other Definitions
    H. Start Year and First Reduction Year
    I. Electricity Dactors and Benchmarks
    J. Inventories
    1. Requirement for Entity-Wide Inventories With a Quality Rating 
of at Least 3.0
    2. De minimis Exclusion From Entity-Wide Emission Inventories
    3. Ratings for Estimation Methods Using Default Values
    4. References to Continuous Emissions Monitoring Systems (CEMS)
    5. Citations of Protocols and Emission Factors Developed by 
Other Organizations
    6. Options for Simplifying Emission Reports
    7. Eliminate Requirements To Report Emissions From Biogenic 
Sources and To Report Certain Non-Fuel Uses of Fossil Fuels
    8. Treatment of Agriculture and Forestry
    9. Stationary Source Combustion
    10. Mobile Sources
    11. Industrial Processes
    12. Indirect Emissions
    13. Geologic Sequestration
    K. Reductions
    1. Selecting Appropriate Reduction Calculation Methods
    2. Base Periods and Base Values
    3. Enabling Reporters To Choose More Stringent Base Values
    4. Emissions Intensity
    5. Absolute Emissions
    6. Changes in Carbon Stocks
    7. Avoided Emissions
    8. Action-Specific Methods
    9. Estimating Reductions From Energy Generation and Distribution
    L. Offset Reductions
    M. Certification and Verification
    1. Certification
    2. Independent Verification
    N. Reporting and Recordkeeping
    O. Report Review and Acceptance Process
    P. Publication of General Guidelines in the Code of Federal 
Regulations
IV. Regulatory Review and Procedural Requirements
    A. Review Under Executive Order 12866
    B. Review Under the Regulatory Flexibility Act
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act
    E. Review Under Executive Order 13132
    F. Review Under the Treasury and General Government 
Appropriations Act, 2001
    G. Review Under Executive Order 12988
    H. Review Under the Unfunded Mandates Reform Act of 1995
    I. Review Under the Treasury and General Government 
Appropriations Act, 1999
    J. Review Under Executive Order 13211
    K. Congressional Review

I. Introduction

A. Background

    Section 1605(b) of the Energy Policy Act of 1992 (EPACT) directs 
the Department of Energy, with the Energy Information Administration 
(EIA), to establish a voluntary reporting program and database on 
emissions of greenhouse gases, reductions of these gases, and carbon 
sequestration activities (42 U.S.C. 13385(b)). Section 1605(b) requires 
that DOE's guidelines provide for the ``accurate'' and ``voluntary'' 
reporting of information on: (1) Greenhouse gas emission levels for a 
baseline period (1987-1990) and thereafter, annually; (2) greenhouse 
gas emission reductions and carbon sequestration, regardless of the 
specific method used to achieve them; (3) greenhouse gas emission 
reductions achieved because of voluntary efforts, plant closings, or 
state or federal requirements; and (4) the aggregate calculation of 
greenhouse gas emissions by each reporting entity (42 U.S.C. 
13385(b)(1)(A)-(D)). Section 1605(b) contemplates a program whereby 
voluntary efforts to reduce greenhouse gas emissions can be recorded, 
with the specific purpose that this record can be used ``by the 
reporting entity to demonstrate achieved reductions of greenhouse 
gases'' (42 U.S.C. 13385(b)(4)).
    In 1994, after notice and public comment, DOE issued General 
Guidelines and sector-specific guidelines that established the 
Voluntary Reporting of Greenhouse Gases Program for recording 
voluntarily submitted data and information on greenhouse gas emissions 
and the results of actions to reduce, avoid or sequester greenhouse gas 
emissions. The 1994 General Guidelines and supporting documents may be 
accessed at https://www.eia.doe.gov/oiaf/1605/guidelns.html. The 
Guidelines were intentionally flexible to encourage the broadest 
possible participation. They permit participants to decide which 
greenhouse gases to report, and allow for a range of reporting options, 
including reporting of total emissions or emissions reductions or 
reporting of just a single activity undertaken to reduce part of their 
emissions. From its establishment in 1995 through the 2004 reporting 
year, 417 entities, including utilities, manufacturers, coal mine 
operators, landfill operators and others, have reported their 
greenhouse gas emissions and/or their emission reductions to EIA.
    On February 14, 2002, the President directed the Secretary of 
Energy, in consultation with the Secretary of

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Commerce, the Secretary of Agriculture, and the Administrator of the 
Environmental Protection Agency, to propose improvements to the current 
section 1605(b) Voluntary Reporting of Greenhouse Gases Program. These 
improvements are to enhance measurement accuracy, reliability, and 
verifiability, working with and taking into account emerging domestic 
and international approaches.
    On May 6, 2002, DOE published a Notice of Inquiry soliciting public 
comments on how best to improve the Voluntary Reporting of Greenhouse 
Gases Program (67 FR 30370). Written comments were received from 
electric utilities; representatives of energy, manufacturing and 
agricultural sectors; Federal and State legislators; State agencies; 
waste management companies; and environmental and other non-profit 
research and advocacy organizations. DOE held public workshops in 
Washington, DC, Chicago, San Francisco and Houston during November and 
December of 2002 to receive information and hear the views of 
interested persons. In addition, the U.S. Department of Agriculture 
sponsored two workshops in January 2003 to solicit input on the 
accounting rules and guidelines for reporting greenhouse gas emissions 
in the forestry and agriculture sectors. These workshops explored in 
greater depth many of the issues raised in the Notice of Inquiry and 
addressed in the written comments.
    On December 5, 2003, DOE proposed revised General Guidelines (68 FR 
68204). A public workshop was held on January 12, 2004, to discuss that 
proposal and to receive public comment. Approximately 200 persons 
attended the workshop. In addition, over 300 written comments were 
received by the close of the public comment period on February 17, 
2004.
    DOE published interim final revised General Guidelines on March 24, 
2005 (70 FR 15169), and, in a notice published in the Federal Register 
on the same day, made available for public comment the draft Technical 
Guidelines necessary to fully implement the revisions to the Voluntary 
Program (70 FR 15164). DOE sponsored a public workshop on these revised 
guidelines on April 26 and 27, 2005, and USDA and DOE co-sponsored 
another workshop on May 5, 2005. In response to public comments, DOE 
extended the period for comments on the revised guidelines by 30 days 
to June 22, 2005. Ultimately, DOE received over 90 written comments, 
totaling over 1000 pages. All written comments and transcripts of the 
public workshops are available on the Web and can be accessed at: 
https://www.pi.energy.gov/enhancingGHGregistry/. On September 19, 2005, 
DOE published a notice in the Federal Register delaying the effective 
date of the interim final guidelines until June 1, 2006 (70 FR 54835).
    DOE now publishes final General Guidelines and announces the 
availability of final Technical Guidelines that are incorporated by 
reference in the General Guidelines. The revised General and Technical 
Guidelines are designed to enhance the measurement accuracy, 
reliability and verifiability of information reported under the 1605(b) 
program and to contribute to the President's climate change goals. The 
key elements of the revised guidelines remain the same as those present 
in the interim final General Guidelines:
     Enable larger emitters to register reductions if they 
provide entity-wide emissions data and can demonstrate they achieved 
entity-wide emission reductions that contribute to the President's goal 
of reducing the greenhouse gas emissions of the U.S. economy.
     Provide for simplified procedures for small emitters to 
report and to register reductions.
     Provide for simplified reports from entities that do not 
want to register their reductions.
     Encourage companies and other reporting entities to report 
at the highest level.
     Require participants to ensure the accuracy and 
completeness of their reports, and encourage independent verification.
     Allow participants to report and register reductions 
achieved internationally.
    Based on the framework set forth by the interim final guidelines 
and the various improvements made in response to the public comments 
received, today's final revised guidelines will enhance:
     Measurement accuracy by creating a ranking system for 
methods to calculate emissions, incorporating the best available 
inventory methods, and enabling more sources to be covered;
     Reliability by creating a more systematic approach to 
reporting, stressing inventories and entity-wide reporting; and
     Verifiability by creating a more transparent reporting 
system for emissions and reductions, requiring recordkeeping and 
encouraging independent verification.
    The Secretary of Energy has approved issuance of this final rule.

B. Process for Implementing the Guidelines

    The General Guidelines set forth in this notice and the Technical 
Guidelines incorporated by reference will go into effect on June 1, 
2006. In the near future, EIA intends to make available for public 
review and comment draft forms for collecting the data covered by these 
guidelines, including the Simplified Emissions Inventory Tool (SEIT) 
referenced in the guidelines. After taking into account any public 
comments it receives and complying with the requirements of the 
Paperwork Reduction Act of 1995, EIA anticipates that final forms will 
be issued before the end of 2006. In addition, EIA will be developing 
the software necessary to permit electronic reporting and the creation 
of an automated and widely accessible data base. EIA does not 
anticipate completing the necessary software until mid-2007. If time 
and resources permit, EIA may conduct cognitive testing of beta 
versions of the reporting software. Should EIA conduct such testing, 
EIA will solicit potential participants via a public notice, postings 
to its website, or some other means. According to the forms and 
software schedule currently anticipated by EIA, the revised guidelines 
will be used to govern the 2007 reporting cycle. Until then, entities 
interested in reporting under the program during the 2006 reporting 
cycle should use the existing guidelines and forms.

II. Overview of Major Changes Made in Response to Comments

    The public comments received by DOE expressed considerable support 
for the emphasis of the revised guidelines on entity-wide reporting on 
all greenhouse gas emissions, including the added requirements imposed 
on entities that are seeking to register reductions. There was also 
substantial support for DOE's efforts to enhance the quality, 
consistency and credibility of the emission inventories and reductions 
being reported. The comments, however, raised a number of concerns 
regarding the potential burdens of reporting under the revised 
guidelines, possible incompatibilities with various existing reporting 
programs or protocols, and the limitations on reporting certain types 
of emission reductions, especially those occurring outside the 
boundaries of the reporting entity. While the basic framework of the 
guidelines remains the same, DOE has made a number of changes designed 
to address these concerns, and has adopted many of the specific 
recommendations made during the comment period.

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    To reduce the potential burdens of reporting under the revised 
guidelines, DOE's final guidelines:
     Enable entities that have their reports independently 
verified or that certify their use of higher quality inventory methods 
to file less detailed reports;
     Increase the ratings of some commonly used methods for 
estimating emissions;
     Enable reports on non-U.S. emissions to be consolidated 
regionally or globally (as long as U.S. data is kept separate); and
     Clarify the flexibility available to reporters that wish 
to avoid or minimize the complexities of accounting for changes in 
carbon stock or other provisions.
    To increase the compatibility of the revised guidelines with 
various existing reporting programs and protocols, DOE's final 
guidelines update its references to existing protocols and update the 
emission factors drawn from such protocols; provide an exception in 
section 300.5(b) for participants in EPA's Climate Leaders or DOE's 
Climate VISION who may wish to use base periods that end as early as 
2000; and attempt to increase the alignment of various definitions and 
methods with those used by other existing programs.
    To expand the opportunities for reporting offset emission 
reductions, DOE's final guidelines, among other things: (1) Add new 
action-specific methods for demand-side management programs, the 
substitution of fly ash for cement by concrete mixers, and anaerobic 
digestion of waste at agricultural facilities and wastewater treatment 
plants; (2) enable multiple reporting entities to register portions of 
the offset reductions achieved by a single other entity, as long as the 
other entity complies with all of the requirements for registration and 
has entered into an agreement with each of the reporting entities; and 
(3) permit the accelerated reporting of carbon stock increases expected 
to occur on land that is being reforested, restored and permanently 
protected.
    DOE has not adopted the recommendation of commenters who advocated 
that DOE mandate participation in the 1605(b) program because such a 
mandate is beyond the statutory authority of DOE.

III. Discussion of Public Comments and the Final Revised Guidelines

    This section of the Supplementary Information discusses the issues 
raised by the public comments on the interim final General Guidelines 
and the draft Technical Guidelines and any changes to the guidelines 
that DOE has made in response to the comments.

A. Implementation Schedule

    A few comments suggested that DOE consider a delay in the start of 
the revised program or a phased implementation of the new requirements. 
DOE does not consider either a delayed or phased implementation of the 
revised guidelines to be necessary or practical. Starting the program 
in calendar year 2007 should give most reporters sufficient time to 
prepare to meet the requirements of the new program. If individual 
reporters require additional time, they may delay their own 
participation. Entities that are unable to meet all of the requirements 
for registration may simply choose to meet only the requirements for 
reporting under the program until such time as they are prepared to 
meet all of the requirements for registration. Another available option 
would be to take more time to complete the entity's first or second 
annual reports. For example, an entity could decide to submit its 
report on 2006 emissions during 2008, rather than by the 2007 deadline 
for reports that are to be included in EIA's first public report on 
2006 emissions (likely to be issued in late 2007 or early 2008). 
Entities may submit reports on prior year emissions and emission 
reductions at any time.

B. Process for Updating or Amending the Guidelines

    DOE intends to review and, if necessary, update the guidelines 
approximately every three years, although exceptional circumstances may 
require amendment of the guidelines at other times. Modifications to 
either the General Guidelines or the Technical Guidelines will be 
subject to public notice and comment. Some commenters noted that this 
public process might be too cumbersome and time consuming for the 
adoption of routine updates to the many emission factors and protocols 
cited by the guidelines. To address this concern, DOE has modified some 
provisions of the Technical Guidelines to direct reporters to use the 
most current version of certain government-sponsored or consensus-based 
factors, methods and protocols.

C. Distinction Between Reporting Under the Program and Registering 
Reductions

    The revised guidelines set forth the requirements for all reporters 
under the 1605(b) program as well as requirements that must be met by 
only those reporters that are seeking to register emission reductions 
(see section 300.1(b) and (c) of this rule for a description of the 
requirements for reporting and registering emissions and reductions). 
More specifically, while some new requirements are imposed on all 
reporters by the revised guidelines, the requirements for entity-wide 
reports and use of high quality emission inventory and reduction 
methods are imposed only on those entities that are seeking to register 
reductions. The distinct requirements for reporting under the program 
and for registering reductions are key to achieving DOE's objective of 
enhancing the overall quality and credibility of the reductions 
documented by the program, while at the same time preserving most of 
the flexibility available to reporters under the original program 
guidelines.
    Some commenters recommended that the distinction between reporting 
under the program and registering emission reductions be eliminated, 
which would enable all reporters to receive the same level of 
recognition, regardless of whether or not they met the entity-wide 
reporting requirements. DOE believes that the elimination of this 
distinction would significantly diminish the incentive for large 
emitters to improve the overall quality of their reports by undertaking 
the more costly activities associated with emission inventories and 
entity-wide assessments of reductions, which are required for 
registration.
    In addition to objecting on policy grounds to the distinction 
between reported registered reductions and other reported reductions, 
one commenter argued that in the absence of express authorization, 
there is no legal basis in section 1605(b) for changing from a unitary 
system of reporting to a two-tier system that distinguishes between two 
types of reported emissions and reductions. Other commenters contended 
that because section 1605(b) expressly includes reductions from plant 
closings among the information that entities may report under the 
program, DOE may not exclude such reductions from the reductions that 
can be registered under the revised guidelines.
    DOE rejects the comments arguing that DOE may not distinguish among 
different types of reported emissions and reductions within EIA's 
database because there is no express authority for such differentiation 
in section 1605(b). Section 1605(b) broadly charges DOE with issuing 
guidelines, after opportunity for public comment, for the ``voluntary 
collection and reporting of information on sources of greenhouse

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gases.'' 42 U.S.C. 13385(b)(1). Further, the guidelines must include:

Procedures for the accurate voluntary reporting of information on--
(A) greenhouse gas emissions [starting with a statutorily-prescribed 
baseline period and annually thereafter]; (B) annual reductions of 
greenhouse gas emissions and carbon fixation achieved through any 
measures, including [a list of such measures]; (C) reductions in 
greenhouse gas emissions achieved as a result of--(i) voluntary 
reductions; (ii) plant or facility closings; and (iii) State or 
Federal requirements; and (D) an aggregate calculation of greenhouse 
gas emissions by each reporting entity.

42 U.S.C. 133385(b)(1)(A)-(D) (emphasis added).
    Nothing in the statute limits the information on sources of 
greenhouse gases reported under the program to that described in 
section 1605(b)(1)(A)-(D). Rather, the information described in (A) 
through (D) is the minimum information that may be reported under DOE's 
procedures. While the text of section 1605(b) does not specifically 
address the question of whether DOE may create categories of reported 
greenhouse gas information within the EIA database, DOE's procedures 
must provide for the accurate voluntary reporting of information. One 
of the goals of registration under the final revised guidelines is to 
enhance the accuracy and reliability of greenhouse gas emissions and 
reductions information. Thus, the text of section 1605(b), read in its 
entirety, supports DOE's view that establishment of a category of 
registered emissions for emissions and reductions that meet certain 
requirements for entity-wide reporting is implicitly authorized by the 
statute.
    DOE also rejects the comment that because section 1605(b) expressly 
includes reductions from plant and facility closings among the 
information that entities may report under DOE's procedures, DOE may 
only establish categories of reported information that include 
reductions from plant and facility closings. DOE's textual analysis 
stated above in rejecting the argument that DOE may not establish a 
two-tiered reporting system applies here as well. Nothing in the 
statute limits DOE's authority to go beyond the minimum information 
categories in section 1605(b)(1)(A)-(D), and the requirement that DOE's 
procedures provide for the accurate voluntary reporting of information 
is implicit authorization for DOE to establish a system of registration 
that enhances the accuracy and reliability of information reported on 
an entity-wide basis.
    Several commenters suggested that the revised program guidelines 
should include a summary of the guidelines' requirements for reporting 
and for registering emissions and reductions. In response, DOE is 
providing a summary of the requirements in section 300.1 of today's 
General Guidelines. The requirements for reporting and registering 
emissions and reductions are described in the following sections of 
this Supplementary Information.
1. Reporting Under the Program
    Each reporter under the program must be an ``entity,'' as defined 
in the guidelines and must file an entity statement. Reporters not 
intending to register emission reductions must, at minimum, meet the 
entity statement, record keeping, and certification requirements set 
forth in sections 300.5(f), 300.9, and 300.10, respectively. They may 
choose to report their emissions and/or their emission reductions on an 
entity-wide basis or for selected elements of their entities, selected 
gases or selected sources. Emission inventories for any year back to 
1990 may be reported, and emission reductions may be reported for any 
year back to 1991, relative to base periods of one to four years, 
ending no earlier than 1990. All reporting entities, whether or not 
they intend to register reductions, must use the emission inventory and 
emission reduction calculation methods specified in the Technical 
Guidelines. For example, as discussed in section III.K.8. of this 
Supplementary Information, the guidelines now provide for the reporting 
of the emissions and reductions associated with chlorofluorocarbons 
(CFCs), although such reductions are not eligible for registration. In 
the future, DOE may revise the guidelines to add methods that permit 
the reporting and, in some cases, the registration of reductions 
associated with other gases. While entities that do not intend to 
register reductions need not ensure that their emission inventories 
achieve a weighted average quality rating of 3.0 or higher (a 
requirement that is discussed in section III.J.1 below), they must 
calculate and report the weighted average quality rating of any 
emission inventories they do report. In most situations, entities not 
registering reductions may choose an emissions intensity, absolute 
emissions or generic action-specific method to calculate the emission 
reductions they report. However, in those situations where a special 
calculation method is provided, such as sequestration, the sale of 
distributed energy, or an action-specific method, the entity must use 
the appropriate method provided in the Technical Guidelines. Entities 
not intending to register reductions may also report (but not register) 
offset reductions achieved by third parties outside their boundaries as 
long as such reductions are reported separately and calculated in 
accordance with methods specified in the guidelines. The third party 
that achieved these reductions must agree to their being reported as 
offset reductions, and must also meet all of the other minimum 
requirements of reporting under the program, including the provision of 
an entity statement, the maintenance of records, and necessary 
certifications as stipulated in Sec. Sec.  300.9 and 300.10.
2. Registration Requirements
    Entities that intend to register reductions must meet a number of 
additional requirements, although these requirements differ depending 
on whether the entity is a large or small emitter.
    To be eligible for registration, a reduction must have been 
calculated using a base period ending no later than 2002, unless the 
entity has committed under the Climate Leaders or Climate VISION 
programs to reduce its entity-wide emissions relative to a base period 
that ends earlier than 2002, but no earlier than 2000.
    In order to register reductions, large emitters must submit entity-
wide emission inventories that meet or exceed the minimum quality 
requirements specified in Sec.  300.6(b) and the Technical Guidelines. 
Any registered reductions must be based on entity-wide assessments of 
annual changes in net emissions, determined in accordance with 
Sec. Sec.  300.7 and 300.8 and the Technical Guidelines. They must also 
meet the entity statement and certification requirements specified in 
Sec. Sec.  300.5 and 300.10.
    Small emitters must also submit emission inventories that meet 
minimum quality requirements and base their registered reductions on 
assessments of annual changes in net emissions, but small emitters may 
restrict these inventories and assessments to a single type of 
activity, such as forest management, building operations or 
agricultural tillage, rather than covering all of their entity's 
emissions. Small emitters must also submit entity statements, certify 
the accuracy of their reports and meet other requirements of reporting 
and registering.
    Both large emitters and small emitters that have met the 
requirements for registering their own reductions may also register 
offset reductions achieved by other entities, as long as they have an 
agreement with the third party to do

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so and these third parties have met all of the requirements for 
registration. Small emitters that serve as aggregators may register 
offset reductions without reporting on their own emissions. Entities 
that report offset reductions achieved by very small emitters (those 
typically emitting less than 500 metric tons of CO2 
equivalent emissions per year) as a result of demand management or 
other programs that reduce greenhouse gas emissions, may register such 
reductions as long as they are calculated in accordance with the 
action-specific method identified in section 300.8(h)(5).

D. Entity Definitions, Boundaries and Statements

    Most of the comments on these provisions of the interim final 
guidelines were generally supportive, although a few significant 
concerns were raised and a number of specific changes were recommended.
1. Entity Definition
    Several commenters urged DOE to require entities to report at their 
highest level of aggregation within the United States, while other 
commenters urged DOE to provide entities even more flexibility in how 
they define themselves for the purpose of reporting under the program. 
The final guidelines retain the basic approach put forward in the 
interim final General Guidelines: entities must have a legal basis and 
are encouraged--but not required--to report at their highest level of 
aggregation within the United States. If an entity chooses to report at 
a lower level of aggregation, the reporting entity must have a legal 
basis and must be defined in a way that is consistent with the 
management structure of the parent company or organization.
    Section 300.2 of the interim final rule defines ``entity or 
reporting entity'' as the whole or part of any business, institution, 
organization or household that is recognized as an entity under any 
U.S. Federal, State or local law that applies to it; is located, at 
least in part, in the United States; and whose operations affect U.S. 
emissions of greenhouse gases. Some commenters argued that the 
``legally distinct entity'' test is too inflexible and urged DOE to 
abandon the test. One stated that electricity providers may have 
different reporting options due to differences in State regulation or 
the absence of such regulation. The commenter recommended revising the 
definition to allow an entity to consist of a set of corporate business 
and other organizational units that comprise a single business 
activity, even though they may not be legally distinct. Another 
commenter stated that the definition of ``entity'' would pose a problem 
for global corporations that are legally structured by product line, 
rather than by country. A large industry association did not criticize 
the substance of DOE's definition of ``entity or reporting entity,'' 
but rather offered drafting guidance that it considered would better 
accomplish DOE's intent. It also suggested a separate definition of 
``reporting entity.''
    After considering the comments, DOE has retained the requirement 
that an entity that reports under the 1605(b) program must be 
recognized as an entity under a U.S. Federal, State or local law. In 
light of changes to the provisions for reporting non-U.S. emissions 
(discussed elsewhere in this Supplementary Information), DOE does not 
believe the definition of ``entity'' in the final guidelines will pose 
a problem for global corporations. While not necessarily agreeing with 
many of the criticisms of the interim final guideline definition of 
``entity or reporting entity,'' DOE found the suggested drafting 
improvements to be helpful and has included several of them in revised 
definitions for the terms ``entity'' and ``reporting entity.'' These 
changes include increased emphasis on the coverage of government 
bodies, agencies or other institutions, which DOE always intended to be 
encompassed by the broad definition of entity included in the 
guidelines.
2. Entity Boundaries--General
    The organizational boundaries of reporting entities largely 
determine which emissions and sources are covered by the entity's 
reports. DOE's interim final General Guidelines encourage entities to 
use financial control as the primary basis for determining the 
organizational boundaries of the reporting entity. While the interim 
guidelines encourage the use of financial control as the basis for 
setting organizational boundaries, they permit entities to use other 
methods, such as equity share or operational control, as long as they 
are explained.
    Boundary definitions are important because they determine what 
emission and emission reductions a particular reporting entity may 
assume responsibility for when reporting under the program. As a 
voluntary reporting program, however, 1605(b) boundaries do not 
determine the legal rights of reporting entities to emissions or 
emission reductions. They are used only as the basis for DOE 
recognition of any registered reductions reported under the program. 
The comments received by DOE on these provisions of the guidelines were 
generally supportive of DOE's approach, although some encouraged even 
more flexibility. No changes have been made to the provisions included 
in the interim final guidelines.
    Financial control encompasses all buildings, facilities, lands, 
vehicles and equipment that are wholly owned by the entity or in which 
the entity has a controlling financial interest. Conversely, it usually 
does not include buildings, facilities, lands, vehicles and equipment 
that are wholly owned by a different entity or in which another entity 
has a controlling financial interest. However, financial control would 
exist if an entity has a long-term lease or other long-term agreement 
that gives it effective control over capital investment and operational 
decisions.
    An alternative method for determining entity boundaries is equity 
share, where more than one entity has a financial interest in a 
particular facility or emission source, and each of the entities takes 
responsibility for reporting only a portion of the facilities emissions 
and reductions. Operational control, where an entity controls the day-
to-day operations of facility or source, but does not exercise long 
term financial control might also be an option under certain 
circumstances. If either equity share or operational control is chosen 
as the method for determining boundaries, the reporting entity must 
inform the other entities that share responsibility for particular 
sources of its intention to report under the 1605(b) in order to ensure 
that the sources emissions or reductions are not double-counted under 
the program. Finally, the General Guidelines have been modified to 
provide further guidance regarding the coverage of partially-owned or 
leased sources, and sources that are neither owned nor leased by the 
reporting entity.
3. Entity Boundaries--U.S. and Non-U.S. Emissions
    The interim final guidelines permit entities to define their entity 
so as to include operations, and their associated emissions, located 
outside of the United States. They also permit certain non-U.S. 
entities to be the source of offset emission reductions, as long as 
they meet all of the requirements of the revised guidelines. The 
interim final General Guidelines would allow entities to both report 
and register emissions and emission reductions occurring outside of the 
United States, subject to certain requirements. One of these 
requirements is that non-U.S. emissions

[[Page 20789]]

and reductions must be reported separately from U.S. emissions and 
reductions. DOE has clarified the guidelines to indicate that this does 
not mean that the U.S. and non-U.S. emissions and reductions must be 
submitted in separate reports. Under the final guidelines, non-U.S. 
emissions and reductions must be included in one or more distinct 
subentities identified in the entity's report to EIA and must be 
separately sub-totaled before being considered as part of the entity's 
net emission reductions qualifying for registration. Unless 
specifically identified by the report, EIA will presume that all non-
U.S. reductions are governed, at least in part, by national or 
international greenhouse gas regulations, and that such reductions 
might be eligible for transfer or trading to other entities. However, 
reporters will not be able to register emission reductions that do not 
meet the requirements of these guidelines, whether or not they are 
eligible for transfer or trading under a foreign national or multi-
national scheme.
    In allowing entities to both report and register emissions and 
emission reductions occurring outside of the United States, the interim 
final General Guidelines require that emissions and reductions for each 
country be segregated in the report submitted to EIA. One stakeholder, 
a large multinational corporation, argued that this would place an 
undue burden on companies having operations in numerous countries, 
particularly where business units that provide an appropriate level of 
aggregation (i.e., as separate subentities) cross national borders. In 
the final guidelines, DOE encourages entities that wish to report or 
register non-U.S. activities to segregate emissions and reductions from 
each country in a separate subentity. However, reporters are permitted 
to aggregate non-U.S. emissions and reductions at regional and even 
non-U.S. global levels, as long as they identify each of the countries 
covered and the country-specific factors used to generate their 
reports.
4. Entity Statements
    DOE's interim final guidelines include a number of specific 
requirements for the contents of the entity statements to be submitted 
by all reporters, although the specific requirements vary somewhat 
depending on whether the reporter is a large or small emitter 
interested in registering reductions, or a reporter that is not 
intending to register reductions. Very few comments were received on 
the requirements and no significant changes have been made to the 
provisions concerning the entity statement.

E. Large v. Small Emitters

    Under the interim final guidelines, ``small emitters'' are a 
special category of reporters that are exempted from certain 
requirements for the registration of reductions, including entity-wide 
emission inventories and entity-wide assessments of reductions. DOE 
received a substantial number of comments on these provisions. Several 
of these comments were critical of the exemptions and argued that small 
emitters deserve no special treatment. These were countered by a number 
of other comments that argued that the burdens on small emitters under 
the interim final guidelines are too onerous, and the exemptions should 
be expanded. After considering these comments, DOE believes that the 
provisions in the interim final guidelines strike the proper balance 
between relieving the burden on small emitters and requiring the 
submission of emissions information for registration. Consequently, DOE 
has not significantly altered these provisions of the guidelines. It 
should be noted that small emitters seeking to register reductions are 
only required to report on the emissions and reductions associated with 
a single, chosen ``activity,'' rather than all of the entity's 
activities. Finally, the guidelines continue to permit entities to use 
a Simplified Emissions Inventory Tool (SEIT), to be provided by the 
Energy Information Administration, to estimate their emissions for 
purposes of determining whether the entity is a small or large emitter, 
and for estimating the quantity of emissions excluded as de minimis. 
The guidelines now clearly state that the SEIT may not be used for the 
preparation of emission inventories.

F. Aggregators

    In the interim final guidelines, DOE provides some special guidance 
for entities that register reductions on behalf of other entities, so-
called ``aggregators.'' Large emitters that serve as aggregators must 
meet all of the requirements for registration, including submission of 
entity-wide emission inventories and entity-wide assessment of their 
emission reductions. However, entities that are small emitters can 
register the offset reductions of other entities and not report on any 
of their own emissions or reductions, although such small emitters 
would have to submit an entity-statement and an estimate of their total 
emissions indicating that they qualified as a small emitter. While 
aggregators can be either small or large emitters, DOE believes that 
most are likely to be small organizations or companies that would 
qualify as small emitters. Some aggregators, such as trade 
associations, might report on behalf of large emitters, but the 
potential benefits of such indirect reporting by large emitters are 
limited because essentially the same data and certifications would have 
to be provided to DOE, whether the entity reported directly or through 
an aggregator. DOE received some requests for clarification of these 
requirements, but none of the comments suggested major changes.

G. Other Definitions

    The interim final General Guidelines, and the Glossary accompanying 
the draft Technical Guidelines, define terms used in the guidelines. 
These definitions were the focus of considerable comment, and many 
comments offered specific suggestions for changes. Others recommended 
the addition of new definitions of terms or, in some cases, the 
transfer of a definition that appeared in the Glossary to the 
definition section of the General Guidelines. A few comments noted 
differences between terms and definitions used in the DOE guidelines 
and comparable terms and definitions used in other protocols for the 
reporting of greenhouse gas emissions. While DOE has attempted to 
minimize such differences, DOE has concluded that in some situations, 
it is necessary to use a new term or define a term in a way that 
differs from the usage or definition of the term used by other 
programs. For this reason, DOE urges reporters and other users to 
carefully review the definitions contained in both the final General 
Guidelines and the final Technical Guidelines.
    The following sections summarize the comments received on 
definitions and DOE's response to the comments.
    Activity of a small emitter. This term is used to define the 
minimum scope of reports by small emitters interested in registering 
reductions. It has been modified slightly to more clearly indicate that 
it applies to anthropogenic actions that result in emissions or 
sequestration.
    Anthropogenic. This definition has been moved from the Glossary to 
the General Guidelines and has been modified to more closely parallel 
the definition of this term under the Climate Leaders and Climate 
VISION programs.
    Avoided emissions. The definition of this term has been modified to 
enable it to encompass more types of ``avoided emissions'' in the 
future. Its practical scope is still strictly limited by the reduction 
calculation methods

[[Page 20790]]

specifically identified and permitted under the guidelines. As 
modified, the term encompasses any emission reduction that occurs 
outside an entity's boundary that results from changes in the activity 
of an entity, but in practice avoided emissions is still strictly 
limited to the emissions displaced by increases in the distribution of 
various types of energy that have been derived from renewable, nuclear 
or other low or non-emitting sources.
    Carbon dioxide equivalent. A definition for this term has been 
added to the General Guidelines.
    Carbon stocks. The definition of this term has been slightly 
modified to clarify its scope in the context of these guidelines, as 
suggested by public comment.
    Climate Leaders and Climate VISION. The definitions of these 
programs have been modified and moved to the General Guidelines.
    Direct emissions. The definition has been modified to link such 
emissions to sources within the organizational boundaries of reporting 
entities.
    Distributed energy. A definition for this term has been added to 
the General Guidelines. The term ``exported energy,'' sometimes used in 
the interim final guidelines, is no longer used.
    The definition for ``entity-level reporting,'' which previously 
appeared in the Glossary, has been deleted.
    The definition of ``entity statements'' that appears in the 
Glossary has been deleted. The meaning of the term ``Entity 
Statements'' is fully described in section 300.5(d) and (e).
    Greenhouse gases. The definition has been modified to more clearly 
identify the gases that may be the subject of reports under the 
guidelines.
    Incidental lands. A definition for this term has been added to the 
General Guidelines.
    Indirect emissions. The definition for this term has been modified 
to parallel similar modifications made to the definition of ``direct 
emissions.'' The definition of ``emission, indirect'', which appears in 
the Glossary, is repetitive and has been deleted. While the indirect 
emissions are currently limited to those associated with the generation 
of energy by another entity that is ultimately used by the reporting 
entity, the definition leaves open the possibility that other types of 
indirect emissions may be added in the future.
    Intergovernmental Panel on Climate Change (IPCC). The definition 
for the IPCC that appears in the Glossary has been modified in response 
to comments received.
    Net emission reductions. This refers to the sum of all reductions 
in a given year that qualify for consideration as registered 
reductions. It has been only slightly modified to improve its clarity.
    Offset. The definition has been modified to improve its clarity.
    Registration. A definition for this term has been added to the 
General Guidelines.
    Reporting entity. A definition for this term has been added to the 
General Guidelines.
    Sequestration. The definition has been simplified, but its intended 
scope remains broad.
    Source. The definition has been slightly expanded to emphasize its 
broad scope.
    Small emitter and large emitter. Definitions for both of these 
terms have been added to the General Guidelines.
    Start year. The definition has been simplified to improve its 
clarity, as suggested by public comments.
    Total emissions. The definition has been modified to correct an 
error, as suggested by public comments.

H. Start Year and First Reduction Year

    The interim final General Guidelines provide that reporters not 
intending to register reductions can establish base periods as early as 
the 1987-1990 timeframe identified in section 1605(b) and can report 
reductions beginning as early as 1991. However, the interim final 
guidelines provide that entities intent on registering reductions must 
establish base periods of no more than four years that end no earlier 
than 2002, and may not register reductions that were achieved prior to 
2003.
    DOE received a number of comments on these provisions of the 
interim final guidelines, most of which recommended that entities be 
allowed to report emissions and emission reductions that occurred prior 
to 2002/2003. Some commenters indicated that they had made commitments 
under the Climate Leaders or Climate VISION programs that used base 
periods that ended prior to 2002 and that they were able to report the 
progress made toward the achievement of these commitments prior to 
2003. In response to these comments, DOE has modified the guidelines to 
permit entities that have made a commitment to reduce entity-wide 
emissions under the Climate Leaders or Climate VISION to establish base 
periods that end as early as 2000. This exception would permit most, 
but not all participants in these programs to use the same base periods 
used in such voluntary programs in their reports to DOE under the 1605b 
program.
    DOE believes that even with this exception, the program will 
continue to be focused on recent and future efforts to reduce 
greenhouse gas emissions and consistent with providing an indication of 
the reporting entities' contributions to the President's goal of 
reducing greenhouse gas emissions intensity of the U.S. economy by 18 
percent between 2002 and 2012. The revised General Guidelines still 
permit reporting of historical activity, however, and therefore fully 
comply with the statutory requirements of section 1605(b).

I. Electricity Factors and Benchmarks

    The interim final guidelines establish several different kinds of 
emission factors and benchmarks intended to approximate the emissions 
associated with electricity use, the emissions avoided as a result of 
reduced electricity demand, or the emissions avoided by increasing 
generation from non-emitting or low-emitting sources. For emission 
inventories, the interim final guidelines provide that entities should 
convert their electricity demand to emissions using factors supplied by 
DOE that would be based on the regional averages of electric sector 
emissions intensities. DOE stated that entities should use factors that 
were derived from the national average emissions intensity of the 
electric sector as a whole for calculating reductions associated with 
reduced electricity demand or increased generation from non-emitting or 
low-emitting sources. DOE indicated that the national average emissions 
intensity was considered to be a better indicator of the actual 
emissions likely to be displaced by reduced demand or increased 
generation.
    Many commenters recommended making the factors used for inventories 
and for calculating reductions the same, although some supported the 
DOE's rationale for proposing different factors. Some advocated 
regional factors as better indicators of the emissions and reductions 
associated with specific sources. Others advocated national factors as 
good indicators of actual emissions and reductions, and as a way of 
simplifying the reporting burden of entities that operated in multiple 
regions. Some utilities recommended that the benchmark used for 
estimating avoided emissions be based on the regional averages of 
fossil-fired generating plants, which they argued would be a better 
indictor of the emissions being displaced. Other utilities recommended 
that entities be permitted to choose either a system-specific 
benchmark, based on the emissions intensity of marginal plants, or a 
regional average.
    After careful consideration of the comments, DOE has adopted the

[[Page 20791]]

recommendation of some utilities to base the factors used to estimate 
the emissions avoided by reduced electricity demand or increased 
generation from non-emitting or low-emitting sources on the regional 
average emissions intensities of fossil-fired generating plants, with 
the proviso that no regional value may exceed 0.9 metric tons of 
CO2 per megawatt hour (MWH). The maximum value of 0.9 metric 
tons per MWH is designed to ensure that all utilities have a clear 
incentive to build new capacity that is at least as efficient as the 
most efficient coal-fired generating plants. DOE chose not to provide 
generators with the flexibility to choose national or regional values, 
or to develop their own, system-specific values in order to avoid the 
significant self-selection bias that would result from such 
flexibility.
    The definition of the U.S. regions to be used in calculating the 
indirect emissions associated with electricity use and avoided emission 
benchmarks is an important technical issue. In the draft Technical 
Guidelines, DOE indicated its intent to use North American Electric 
Reliability Council (NERC) regions as the basis for the indirect 
emission factors used in preparing emission inventories. Some comments 
suggested that NERC subregions, especially for the western United 
States would be more appropriate. Others urged DOE to consider the use 
of EPA's eGRID regions. In choosing among these and other options, DOE 
considered whether: (1) It would be possible to provide meaningful 
values for all possible reporting years (the earliest possible 
reporting year is 1987) based on readily available public data; (2) 
reporters would be able to readily determine which factor applied to 
specific facilities or operations; and (3) the resulting factors would 
provide a good approximation of the indirect emissions associated with 
electricity use or demand reductions in a particular region. After 
careful consideration, DOE concluded that basing indirect emission 
factors on either NERC or eGRID regions would not achieve one or more 
of these three objectives. For example, because the NERC and eGRID 
regions cut across state lines, it will likely be difficult for 
reporters to determine which region is applicable to a specific 
facility.
    Consequently, DOE decided to base these factors on the electric 
sector emission intensities of state-based regions that approximate the 
most current NERC regions and, in the case of the western United 
States, appropriate subregions. The purpose of these state-based 
regions is to approximate the actual emissions associated with the 
electricity supplied to users, while also utilizing data that is 
readily available for all reporting years and boundaries that are well 
recognized by potential reporters. EIA will determine the most 
appropriate State groupings for the development of the indirect and 
avoided emission factors based on NERC regions and applicable 
subregions, as defined in June 2006. Generally, those states that are 
split among two or more NERC regions or subregions should be assigned 
to the state grouping that contains most of the state's population. One 
possible grouping that will be considered by EIA is: (1) New York, 
Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire and 
Maine; (2) New Jersey, Delaware, Pennsylvania, Maryland, West Virginia, 
Ohio, Indiana and Michigan; (3) Illinois and Wisconsin; (4) Missouri, 
Kentucky, Virginia, Arkansas, Tennessee, North Carolina, South 
Carolina, Louisiana, Mississippi, Alabama and Georgia; (5) Florida; (6) 
Texas; (7) Oklahoma and Kansas; (8) North Dakota, South Dakota, 
Nebraska, Minnesota and Iowa; (9) Colorado, Utah, Nevada, Wyoming and 
Montana; (10) New Mexico and Arizona; (11) Oregon, Washington and 
Idaho; (12) California; (13) Hawaii; and (14) Alaska. EIA will provide 
factors for 1999 and subsequent data years and will periodically (e.g., 
every three to five years) update these factors to reflect what they 
determine to be significant and lasting changes in the electric sector 
emissions intensity of the established state groupings. EIA will also 
provide a set of values to be used for all data years prior to 1999.
    Several comments focused on the treatment of transmission and 
distribution (T&D) losses in the calculation of the factors used to 
represent the emissions associated with electricity demand (to be 
included in emission inventories) and reductions in electricity demand 
(to be included in emission reduction calculations). Some noted that 
T&D losses were not included in the emission factors widely used by the 
Climate Leaders program. Others favored the inclusion of such T&D 
losses in the factors representing emissions associated with 
electricity demand and reductions. DOE decided to continue to include 
such losses in the factors used to estimate both the inventories and 
reductions associated with electricity use. By including such losses, 
these factors will provide a better indicator of the emissions 
resulting from electricity demand. Entities that wish to include both 
generation and T&D losses in their reporting of indirect emissions to 
the Climate Leaders program may do so, as long as they note that their 
reports include both types of losses, based on the factors provided by 
DOE.

J. Inventories

    The interim final guidelines provide detailed guidelines for the 
conduct of emission inventories. DOE received a large number of 
comments that touched on emission inventory guidelines in some way. 
Most comments were generally supportive of the framework for emission 
inventories set forth in the General Guidelines and the more detailed 
provisions of the draft Technical Guidelines. However, some commenters 
raised concerns regarding the start year and de minimis requirements of 
the interim final guidelines, while others suggested various 
improvements to the methods cited or the quality ratings assigned to 
these methods.
    In the final guidelines, an emissions inventory is an accounting of 
an entity's actual emissions (direct, indirect and sequestered) during 
a specified year. An emissions inventory provides, by itself, a useful 
record of an entity's actual emissions over time, but it also serves as 
one of the inputs necessary for the calculation of the base values used 
in determining emission reductions. For this reason, an emissions 
inventory is usually a major element of an entity's first report under 
the program.
    Since emission inventories are a critical part of calculating 
emission reductions, all reports under the revised program should 
include some kind of inventory. Entities that do not intend to register 
reductions and small emitters may restrict their inventory data to 
those sources or activities that will be the focus of future emission 
reduction calculations. However, large emitters that intend to register 
reductions must submit entity-wide emission inventories and may exclude 
from such inventories only de minimis emissions. Any entity that wishes 
to register reductions must ensure that its annual inventories meet the 
minimum quality requirements specified in the guidelines.
    The following sections summarize the major comments that addressed 
the emission inventory requirements of the interim final guidelines and 
DOE's responses to the comments.
1. Requirement for Entity-Wide Inventories With a Quality Rating of at 
Least 3.0
    The interim final guidelines established a quality rating system 
for emission inventories. Reporters could choose among a range of 
different methods for measuring or estimating the emissions from 
specific sources. Each

[[Page 20792]]

different method was assigned a rating of A, B, C or D and each of 
these ratings was assigned a numerical value from 4.0 (for A rated 
methods) to 1.0 (for D rated methods). Entities that were intent on 
registering reductions would be required to complete emission 
inventories that had a quantity-weighted quality rating of at least 
3.0.
    Most comments received by DOE supported the emphasis of the interim 
final guidelines on quality entity-wide inventories. The final rule 
retains the requirement for a 3.0 quality rating for the emissions 
inventories that large emitters must submit as a prerequisite for 
registering reductions. DOE believes that methods given an A or B 
rating are sufficiently accurate to serve as the basis for entity-wide 
reporting, while methods given a C or D rating should be used only for 
those gases or sources that represent a small share of the reporting 
entity's total emissions. Several commenters suggested that the A and B 
methods available for specific sources or industrial sectors are too 
burdensome and will make it difficult for some entities to prepare 
inventories that meet the 3.0 quality rating. DOE has made some 
modifications to the ratings for the available methods to ensure that a 
cost-effective and practical A- or B-rated method is available for 
every emissions source.
    As the table below demonstrates, three very different companies 
with diverse emission profiles could meet the 3.0 quality rating 
threshold using an inventory approach specific to their company. 
Company A is a large electric utility, with a vast preponderance of 
emissions attributable to stationary fossil fuel combustion. As a 
result, this company may use lower rated (and lower cost) methods for 
estimating emissions from its smaller sources, such as fleet vehicles 
and sulfur hexafluoride used as an insulator on transmission lines. 
Similarly, a landfill operator could achieve the quality-rating 
threshold by ensuring that it uses ``B'' or better-rated methods for 
estimating methane emissions from the landfill. Company C, a large 
Federal defense contractor, is able to offset its lower rated estimates 
of emissions from mobile sources with higher rated methods for 
estimating emissions from stationary combustion at its lone 
manufacturing facility.

----------------------------------------------------------------------------------------------------------------
                                                           Emissions
                         Source                           metric tons     Method      Emissions weighted grade
                                                              CO2e        grade
----------------------------------------------------------------------------------------------------------------
                Company A (Large Utility)
Direct Emissions:
    Stationary Combustion...............................      300,000        A = 4         300,000*4 = 1,200,000
    Fleet Vehicles......................................       10,000        C = 2             10,000*2 = 20,000
    Sulfur Hexafluoride on T&D System...................          500        C = 2                 500*2 = 1,000
Indirect Emissions:
    Electricity in Commercial Offices...................        1,000        B = 3               1,000*3 = 3,000
                                                         -------------------------------------------------------
        Total...........................................      311,500         3.92      1,224,000/311,500 = 3.92
                                                         =======================================================
              Company B (Landfill Operator)
Direct Emissions:
    Methane from Decomposition..........................       50,000        B = 3            50,000*3 = 150,000
    Heavy Duty Vehicle Fuel Use.........................          200        B = 3                   200*3 = 600
Indirect Emissions:
    Electricity Consumption.............................           50        A = 4                    50*4 = 200
                                                         -------------------------------------------------------
        Total...........................................       50,250         3.00         150,800/50,250 = 3.00
                                                         =======================================================
      Company C (Large Federal Defense Contractor)
Direct Emissions:
    Vehicle Fuel Use....................................          500        C = 2                 500*2 = 1,000
    Stationary Combustion at Manufacturing Facility.....          800        A = 4                 800*4 = 3,200
Indirect Emissions:
    Electricity in Commercial Offices...................        9,000        B = 3