.@EPA 2017 #RFS Rules Sparks Inferno

Joanna Schroeder

The U.S. Environmental Protection Agency (EPA) has released its draft of the proposed Renewable Fuel Standard (RFS) renewable volume obligations (RVOs) for 2017 and have sparked an inferno of unrest among the biofuels industry. EPA has proposed an RVO of 18.8 billion gallons (BG) of which 4 BG is advanced biofuels and 312 million gallons is cellulosic biofuels. The RVO for first generation biofuels, such as corn ethanol, is 14.8 BG, an RVO under mandated legislation. The ethanol industry has consistently and often called on the EPA to adhere to congressional intent by increasing blending targets, but has not done so. Today, the Renewable Fuels Association (RFA), among several other biofuel associations and companies, are involved in litigation on the final 2014-2016 targets.

rfalogo1“For months, EPA has been saying it plans to put the program ‘back on track.’ Today’s proposal fails to do that,” responded RFA President and CEO Bob Dinneen to the draft rules. “The agency continues to cater to the oil industry by relying upon an illegal interpretation of its waiver authority and concern over a blend wall that the oil industry itself is creating. As a consequence, consumers are being denied higher octane, lower cost renewable fuels. Investments in new technology and advanced biofuels will continue to languish and greenhouse gas emissions from automobiles will be unnecessarily higher.”

“The real frustration is that EPA seems to be artificially constraining this market,” continued Dinneen. “The RFA has demonstrated just how easy it would be for obligated parties to reach the 15 billion gallon statutory volume for conventional biofuels next year. The fact is with rising gasoline demand, increased E15 and E85 use made possible by USDA’s infrastructure grant program, continued use of renewable diesel and conventional biodiesel that also generate D6 RINs (renewable identification numbers), well more than 15 billion gallons will be used next year. All of that is in addition to the 2 billion surplus RINs available to refiners due to EPA’s tepid enforcement of the RFS in the past.” (Click here to read Bob Dinneen’s full statement.)

aceBrian Jennings, executive vice president of the American Coalition for Ethanol (ACE) highlights an excuse from EPA used to rein-in the RFS is data from the U.S. Energy Information Administration (EIA) that shows gasoline consumption is falling. According to EIA, gasoline use rose to 9.2 million barrels per day (bpd) in 2015 – just shy of the 2007 record of 9.29 million bpd. In 2016, EIA predicts a new gasoline use record of 9.3 million bpd will be set and that trend will continue into 2017.

“EPA has claimed they can’t require oil companies to add more ethanol to a shrinking gasoline pool because of the so-called E10 blend wall. Under that logic, EPA’s ethanol blending volumes for 2017 should increase to statutory levels because gasoline use is on a steady rise and will set a new record this year. While we are pleased that EPA’s 2017 proposal increases ethanol blending levels from 2016, we remain disappointed that EPA falls back on the questionable E10 blend wall methodology which has disrupted implementation of the RFS for more than a year,” said Jennings. (Read Brian Jennings full statement here.)

NCGA-Logo-3Maryland farmer Chip Bowling, president of the National Corn Growers Association also acknowledged that the EPA has moved forward, but not enough and the result is to move America backward. “In the past, the EPA has cited a lack of fuel infrastructure as one reason for failing to follow statute. Our corn farmers and the ethanol industry have responded. Over the past year, we’ve invested millions of dollars along with the U.S. Department of Agriculture’s Biofuel Infrastructure Partnership to accelerate public and private investment in new ethanol pumps and fuel infrastructure. The fact is,” added Bowling, “today’s driver has more access than ever to renewable fuel choices.” (Read Chip Bowling’s full statement here.)

Ethanol supporters are in agreement that the EPA must be taken to task and reinstate mandated blending levels. The groups said they will continue to work to make this happen and encourage ethanol supporters to let their voices be heard in their local communities, and with state and federal legislators.

ACE, advanced biofuels, Biodiesel, EPA, Ethanol, NCGA, RFA, RFS