API plans to use lobbying muscle to repeal renewable fuel standard

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, November 28, 2012

The American Petroleum Institute today said it will launch a full-scale effort to repeal the nation’s biofuel mandates in the new year.

Bob Greco, API’s head of downstream activities, said the oil industry trade group plans to begin by approaching a bipartisan group of House and Senate members who earlier this year called on U.S. EPA to waive the corn ethanol requirement in response to the drought. API also plans to “hit the ground running” on “educating” new members of Congress, Greco said.

API has previously urged Congress to reform the renewable fuel standard, but today Greco said the group’s opinion has evolved based on an “accumulation of problems.”

“Despite repeated and ongoing efforts to address the program’s shortcomings — through regulatory petitions, legal actions and suggested solutions to implementation concerns — little has been done to make the program workable, and sometimes actions have been taken that make matters worse,” Greco said today. “There is a fundamental flaw in the enabling statute, so the only way to fix it is to scrap the law and start over if Congress believes such a program is necessary.”

The 2007 renewable fuel standard calls for 36 billion gallons of traditional ethanol and advanced biofuel to be blended into the nation’s gasoline supply by 2022. It sets up a system of credit trading for refiners to meet the obligations and imposes penalties when they don’t.

The standard has come under fire this year as critics have blamed it for driving up corn prices in the face of the drought. EPA recently denied a petition by several livestock-state governors to provide a short-term waiver of the corn ethanol section of the standard, a move that led critics to call on Congress to take action.

API, Greco said, will join a wide coalition of partners in its effort to repeal the RFS, including livestock groups and some environmental organizations.

Greco said the standard and EPA’s administration of it contained “many flaws,” including requiring refiners to purchase credits for advanced biofuel that doesn’t exist and failing to address fraud in the credit marketplace.

Biofuels groups responded quickly to API’s call for repeal, saying such action would undermine efforts to build up the advanced biofuels sector and to increase energy independence.

D.C.-based ethanol trade group Growth Energy, one of several groups that recently joined a coalition to fight efforts to undermine the RFS, said the oil industry was using the “same old talking points.”

“I am not surprised to hear that API held a press conference to discuss how to ‘fix’ the RFS. This is a classic example of the fox guarding the chicken coop. Really?” Tom Buis, CEO of Growth Energy, said in a statement. “Special interests will stop at nothing to discredit the success of renewable fuels created right here at home to ensure their lock on the fuels market goes unchecked.”

API’s repeal call came just a day after it filed a lawsuit against the agency over its 2013 biodiesel requirement of 1.28 billion gallons, calling it “overzealous” and “unworkable.”

Last week, American Fuel & Petrochemical Manufacturers filed a similar lawsuit with the U.S. Court of Appeals for the District of Columbia Circuit. The groups have also petitioned the agency directly for review of the requirement, which represents a 28 percent increase from this year’s biodiesel level.

The suits are among several filed by both organizations against the agency over various aspects of the renewable fuel standard.