EPA’s RVO Proposal Cannot Stand

Joanna Schroeder

fuels-americalogoFuels America coalition hosted a media call in reaction to the EPA’s proposed renewable volume obligations (RVOs) today. The biofuels industry said they were disappointed and that the proposed volumes would set the entire industry back and that the EPA’s proposal cannot stand.

During the call, Bob Dinneen from the Renewable Fuels Association (RFA) unveiled a new analysis showing how the RVOs, if implemented, would impact gas prices. In addition to Bob Dinneen, participants included Brent Brent Erickson, Executive Vice President, BIO; Roger Johnson, President of the National Farmers Union; Tom Buis, CEO of Growth Energy; and Jeff Lautt, CEO of POET.

The Fuels America said of today’s proposed 2014 RFS numbers, “We are astounded by the proposal released by the Administration today. It reflects an “all of the above, except biofuels” energy strategy. If implemented, would cost American drivers more than $7 billion in higher gas prices, and hand the oil companies a windfall of $10.3 billion. The impact of this proposal on the renewable fuel industry– both first and second generation – cannot be overstated. It caps the amount of renewable fuel used in our gasoline far below what the industry is already making, and could make next year, using an approach that is inconsistent with the RFS.

Dinneen said during the press conference, “By re-writing the statute and re-defining the conditions upon which a waiver from the RFS can be granted, EPA is proposing to place the nation’s renewable energy policy in the hands of the oil companies. That would be the death of innovation and evolution in our motor fuel markets, thus increasing consumer costs at the pump and the environmental cost of energy production. This proposal cannot stand.”

biofuel research“An Administration committed to addressing climate change cannot turn its back on biofuels. An Administration managing an economic recovery cannot watch gasoline prices rise for lack of competition. An Administration intent upon seeing the next generation of biofuel technology commercialized cannot eviscerate the demand base that would allow those fuels to succeed. And an Administration that understands the importance of a healthy farm economy cannot rip away demand that farmers relied upon in growing the largest corn crop in history, particularly at a time when there is no Farm Bill safety net. This Administration, a consistent supporter of the RFS, will not affect its demise,” added Dinneen.

Buis noted that this is a proposed rule and not a final rule and there will be a 60 day comment period. “We welcome the opportunity to ensure that biofuel stakeholders are able to express their concern with this proposed rule, while also laying out a reasonable pathway to achieve the goals of the RFS during the forthcoming comment period.

Listen to the full Fuels America press call: EPA's RVO Proposal Cannot Stand

“We are only five years into a 15 year policy that is working and has saved Americans billions of dollars at the pump,” Buis continued. “Now is not the time to turn back on the progress we have made and ask Americans to pad big oil’s already record profits. When all the facts are presented during the public comment period, I am confident that it will be clear to everyone that the RFS is the most successful energy policy enacted within the last 40 years, and that the final rule should be modified to allow our country’s energy policy to move forward, not backwards.  For over 40 years our nation has been held captive by our addiction to foreign oil, the proposed rule if finalized in its current form is a victory for OPEC and Big Oil and a loss for America.”

This fall, the corn industry is looking at a record breaking harvest while the EPA has proposed renewable fuel volumes well below what the ethanol industry is capable of supplying. Lautt responded during the call that the opportunity to offer more affordable fuel options to consumers has never been better.

Ethanol plant surrounded by corn field“At the same time, cellulosic ethanol capacity is coming online in a large part thanks to significant investment from grain ethanol producers such as POET. The proposed reduction from EPA is troubling, as it not only cuts grain ethanol use below the levels set by Congress, it cuts them to a level below the 13.8 billion that was met in 2013.

“Ethanol use this year remained strong even in the midst of a drought, primarily due to ethanol’s significant price discount to gasoline. Moving backwards from 2013 would not only cost drivers at the pump, it would undermine the positive impact ethanol has had in lowering tailpipe emissions and improving the greenhouse gas footprint of transportation fuel. Additionally, cellulosic ethanol capacity today is being built to take advantage of shared infrastructure, expertise and investment from grain ethanol producers. Its development and expansion depends on grain ethanol’s continued success.

Lautt concluded, “Our world has been beholden to the oil industry for a century, and ethanol has provided the first real alternative to gasoline in history. The Renewable Fuel Standard was created to provide a choice to consumers outside of oil-based fuel. We must seek ways to build on that work, not move backwards. Let’s be clear: This is about market share for our fuel supply. Under this rule, American drivers and American farmers lose and Big Oil wins.”

Audio, biofuels, Fuels America, Growth Energy, RFA, RFS