A coalition of clean fuel groups is going straight to the White House, after being “rebuffed” by the Environmental Protection Agency, over fears the agency could be placing their future into the hands of the oil industry.
Now that the EPA has finally sent its renewable fuel blending requirements for 2014, 2015 and 2016 to the White House for review, the biofuel industry wants to make sure the administration is still on its side.
Under the EPA’s flagship renewable fuel program, the Renewable Fuel Standard, the agency sets annual targets that oil refiners must meet by purchasing corn ethanol and other biofuels to blend into the nation’s gasoline and diesel supplies. They also can comply by purchasing credits.
In 2013, the EPA proposed slashing the 2014 targets by nearly one billion gallons, saying that it considered the implications of an oil industry argument that the fuel system had hit a “wall” in its ability to absorb renewable fuels.
The coalition sent a letter to President Obama earlier this week asking for a meeting to ensure that the agency’s rationale for lowering the requirements is removed in the recently redone 2014, 2015 and 2016 rules. No one has seen the rules, but they are slated to be re-proposed June 1.
The letter says the past proposal would do the president and his climate change legacy a disservice by leaving the fate of the green fuel industry in the hands of its competitors — the oil industry.
“Mr. President, we are deeply concerned that the EPA may be about to issue a new proposal that takes a similar approach,” it adds. “Such a decision virtually ensures that no new advanced biofuel plants would be built in the United States any time soon, undermining an emerging industry that you have so strongly championed.”
The EPA’s first shot at setting the renewable fuel blending targets for 2014 “was an enormous disservice to you and your legacy, Mr. President. Prior to the release of that proposal, we had asked to meet with EPA, but were rebuffed. We would like to work with you to ensure that the mistake is not repeated,” the letter reads.
The “mistake” the letter refers to is the rationale EPA used in the 2014 proposal.
After the EPA took the unprecedented action of cutting the ethanol requirement by nearly one billion gallons, the industry fired back, accusing the agency of buying into an argument from the oil industry, called the “blend wall.” That argument says the Renewable Fuel Standard is approaching a point at which the amount of biofuel the EPA is asking refiners to blend into gasoline is overtaking their ability to blend it using 10 percent ethanol blends, or E10, the fuel blend that comprises most of the U.S.’s gasoline supply.
The ethanol industry accused EPA of, in fact, breaking the law, and going above and beyond the limits of its Clean Air Act authority.
Under the air law, the EPA can reduce the amounts that oil companies are required to blend in gasoline only if there is a supply disruption. It cannot waive the requirements based on demand issues, such as the lack of fueling infrastructure.
One solution to overcome the wall would be to blend higher amounts of ethanol in gasoline, which refiners argue would harm vehicle engines, as well as cause other problems that could result in fuel shortages.
The right path, according to the oil industry, is to reduce the requirements.
“Opponents of the Renewable Fuel Standard continue to predict apocalypses that have never come to pass,” the letter reads. “Contrary to their predictions, the inflation-adjusted price of gasoline has fallen by roughly 50 cents per gallon since the [standard] was first enacted in August 2005.
“Opponents claimed that the rising price of Renewable Identification Numbers (also known as RINs, the tradable credits used to comply with the RFS) would cause gasoline prices to skyrocket. But that hasn’t happened,” the letter adds.
The letter was sent as the Biotechnology Industry Organization, a strong supporter of the standard and a member of the coalition, circulated a report showing that continued delays in issuing the fuel targets was stifling investment in new state-of-the-art biofuel facilities.
The industry report showed that in the nearly two years since the 2014 cut was proposed, investment has shrunk by nearly $14 billion. That investment was meant to usher in a new era of fuels derived from biomass and crop waste, which would have lower greenhouse gas emissions, which most scientists blame for manmade climate change.
The letter acknowledged that under the fuel standard, corn ethanol is limited to 15 billion gallons. The rest of the 36 billion gallon goal of the program is to be made up of second-generation fuels not derived from food crops.
“The only question is whether we stop there, or whether we bring online the next wave of large-scale advanced biofuel production,” the letter reads.
