API Eyes Clean Fuels Standard But Faces Skeptical Environmentalists

Source: By Doug Obey, Inside EPA • Posted: Tuesday, October 11, 2022

But the effort comes with environmentalists already expressing skepticism, in part due to prior oil industry opposition to state clean fuels standard efforts.

“We should be extremely skeptical,” Jason Rylander, an attorney at the Center for Biological Diversity’s Climate Law Institute told Inside EPA’s Climate Extra. “The devil is in the details.”

The Oct. 6 meeting in Washington, DC, first reported by the Washington Post, centered around a “well to wheels” concept for a fuels policy, and included unspecified representatives from the oil and gas sector, automobile industry, biofuels, and marketers, according to a draft meeting agenda.

“There is a pressing need to enact durable, predictable policies that incentivize the deployment of a wide range of solutions to achieve greater GHG emissions reductions faster and cost effectively,” the draft agenda states.

API’s objective is to develop an outline — and ultimately federal legislation — of a “holistic, technology neutral” policy that can reduce transport sector GHG emissions “relatively rapidly and in a cost-effective manner for the end user and society.” The policy should address “lifecycle GHG emissions of the fuel, the vehicle, and the necessary infrastructure.”

The agenda underscores API’s effort as a reaction to current policies — including the existing RFS program, vehicle tailpipe standards and “mandates/subsidies incentives” — that it describes as “too narrow in scope.”

“Many proposed policies do not consider technology-neutrality, consumer choice or market fairness for less affluent parts of society and do not foster innovation and marketplace competition,” according to the document.

The language thus takes an implicit swipe at policies including electric vehicle (EV) incentives or sales mandates, in line with critics who note that EVs have zero emissions at the tailpipe but not zero lifecycle emissions.

The agenda argues that federal action on the issue would “establish national policies that reduce market fragmentation and regulatory compliance inefficiencies that potentially increase societal costs.”

API’s push is consistent with arguments from both the oil and biofuels sector that EV-centric policies give short shrift to strategies for curbing GHG emissions from vehicles still likely to burn liquid fuels for some time.

The biofuel firm Growth Energy in a statement provided to Inside EPA’s Climate Extra confirmed the company was among the meeting’s attendees but did not elaborate on outcomes.

“We have always participated and will continue to participate in meetings that are educational and help us gather intelligence on any policy or public relations fronts that might affect our industry,” according to the statement from CEO Emily Skor.

Broader Trends

The API workshop comes amid a series of broader and potentially converging trends, including: the recent federal enactment of landmark climate legislation that includes electric vehicle tax credits for passenger and commercial vehicles: California’s recent ban on new combustion vehicle sales after 2035; ongoing questions about potential updates to the RFS; and efforts to enact state clean fuels programs that include recognition of EVs.

One electric vehicle industry source, who did not attend the meeting, interprets API’s effort as a bid keep potential fossil fuel related alternatives — such as “grey” hydrogen made from natural gas, along with biofuels — in the mix for recognition in such policies.

The source also notes that this comes amid pressures that include EPA preparing to issue within the next month or two a proposal for generating RFS credits for renewable electricity used to power vehicles.

The Washington Post report notes that API’s effort is the second time in roughly a month that talk about a clean fuels standard has surfaced inside the Beltway, after a group of stakeholders — including the Renewable Fuels Association, Rivian, the Coalition for Renewable Natural Gas, and the Alliance for Clean Energy New York — came together under the moniker of the Drive Clean Initiative in support of the concept.

The group’s website cites the initiative as facilitated by the lobbying firm AJW and including a wide array of stakeholders deeply invested in reducing emissions from transportation fuels.” This includes “automakers, farmers, utilities, environmentalists, science-based organizations, renewable fuel producers, technology companies, electric vehicle charging companies, truck and bus manufacturers, emissions controls makers, non-profit clean energy organizations, and more.

The group’s statement of principles touts a technology-neutral approach, as well as an approach that “complements existing or future state clean fuel standard programs,” in what may indicate a divergence from the nascent API effort.

It is not clear how much of an appetite there is on Capitol Hill for tackling a clean fuels standard, so soon after enactment of the recent landmark climate law that omitted such approaches.

But the API workshop comes just ahead of November elections that political analysts have also said could hand Republican lawmakers — including from biofuels states — control of at least the House of Representatives next year.

A source familiar with the Drive Clean Initiative likewise characterizes discussion of the clean fuel standard concept issue as at an early stage but adds that Capitol Hill meetings on the issue show bipartisan interest in the idea.

The source suggests it will likely be possible to have more focused discussions after the election on what a specific proposal could look like.

In addition, the source cites API’s effort as potentially noteworthy. “They don’t really come to the table unless they know the train is moving,” the source says.

But the API effort is garnering skepticism from a number of environmental groups.

“The oil industry has zero credibility when it comes to clean fuels policy, National Wildlife Federation climate and energy senior policy specialist David DeGennaro tells Inside EPA’s Climate Extra. “With all signs pointing to electrification of light duty vehicles and alternative fuels for other travel, Big Oil is grasping to extend its shelf life.”

CBD’s Rylander likewise fears that “API is about one thing and one thing only, ensuring a future for petroleum products.”

Rylander alludes to prior opposition by oil industry interests to clean fuels standards in venues including Washington state.

And he also reiterates his group’s longstanding concerns about the biofuels that such a clean fuels standard could encourage.

“The greenhouse gas [benefit] of biofuels ae overstated. And left out of the equation are the land use impacts of converting more and more acreage to non-food crops that require billions of gallons of pesticides and fertilizer, with impacts on wildlife habitat, endangered species, and even food security,” he says.

Rylander says he fears that if API’s clean fuel standard effort gains steam it could a route to “prohibiting more meaningful action at the state or federal level under a variety of programs.” — Doug Obey (dobey@iwpnews.com)