Advanced biofuel companies warn EPA change to renewable fuel standard could hurt growth

Source: by Christopher Doering, Des Moines Register • Posted: Wednesday, October 30, 2013

Nearly three dozen advanced biofuel companies warned the White House Tuesday that as the administration considers making changes to the country’s renewable fuels policy, it should be careful not to irreversibly harm the next generation of fuels.

In a letter to President Barack Obama, the 37 companies, including ethanol producer Poet and agribusinesses giants Monsanto and DuPont, urged the administration not to make major changes to the Renewable Fuel Standard — a law that requires refiners to buy alternative fuels made from corn, soybeans and other products to reduce the country’s dependence on foreign energy. The oil industry has lobbied vigorously against the standard that it calls outdated.

“We are highly aware of the pressure the administration and Congress are under with regard to the (Renewable Fuel Standard),” Brooke Coleman, executive director of the Advanced Ethanol Council, and Jim Greenwood, president of the Biotechnology Industry Organization said in the letter.

“But the RFS is only recently pushing the oil industry out of its comfort zone with regard to the amount of renewable fuel utilized in the marketplace and the types of advanced fuels beginning to come online from new sectors.” They said changing the program “too aggressively at this critical juncture will only make the deployment of advanced biofuels more challenging.”

The groups said that in setting the annual blend level of advanced biofuels, the EPA should base it on expected production of advanced biofuels in the coming year, rather than gallons produced to date requested by oil groups. Current production levels, they contend, do not adequately reflect future demand.

“Allowing the RFS to reflect, rather than drive the marketplace is a problem

because the oil industry controls off-take of our fuel, which in turn gives them unreasonable leverage to determine themselves how quickly our industry grows,” Coleman and Greenwood said.

They also warned that any solution to the so-called blend wall — a level where refiners must include more ethanol into the country’s fuel mix than can be blended in at a 10 percent threshold accepted in all cars and trucks – must be “consistent and unwavering administration of the program.”

The American Petroleum Institute, which represents 500 oil and natural gas companies, and other groups have said that with people driving less and cars having better fuel efficiency, it’s harder for refiners to blend the required level of fuel into the motor fuel supply at the 10 percent ethanol rate. Higher fuel blends with 15 percent ethanol, they contend, will damage cars over time.

“Softening the RFS in any way to address the blend wall will actually perpetuate the blend wall as a construct to dampen innovation and competition, which will cost consumers at the pump and undercut innovation in the sector,” the advanced biofuel companies said.

The EPA has indicated it may be understanding of the oil industry’s plea. A leaked draft plan outlining 2014 blending quotas indicated the agency would require 13 billion gallons of corn-based ethanol and lower levels for advanced biofuels.