API urges court to review ‘unrealistic’ RFS

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, October 9, 2013

The American Petroleum Institute today filed a lawsuit against U.S. EPA over the agency’s mandates for renewable fuel production this year.

EPA’s cellulosic biofuel target for this year is unrealistic given market conditions, and the overall renewable fuel targets were issued several months after the statutory deadline, the oil trade group argues in its petition filed in U.S. District Court for the District of Columbia. The group asked the court to review the agency’s decision.

“EPA’s unrealistic ethanol mandates for 2013 are simply bad public policy,” said Harry Ng, API vice president and general counsel, in a statement.

The 2007 renewable fuel standard requires EPA to set targets each year for both conventional ethanol and advanced biofuel that must be blended into the nation’s petroleum-based motor fuel supply. Though the statute lays out a schedule for increasing amounts of renewable fuel, the agency is allowed some leeway in the numbers it chooses.

Under EPA’s final targets this year, refiners must blend a total of 13.8 billion gallons of corn ethanol and 2.75 billion ethanol/equivalent gallons of advanced biofuel into petroleum-based fuel. Of the advanced bucket, 1.28 billion gallons must be biodiesel and 6 million gallons must be cellulosic biofuel, a fuel made from plant-based materials like agricultural residue, perennial grasses and municipal solid waste.

In its suit, API says the cellulosic number does not accurately reflect the nascent domestic market. Though several companies are working to scale up technology to bring cellulosic fuel to market, EPA has recorded about 130,000 gallons of the fuel this year through August. The oil industry won a similar lawsuit earlier this year in which it argued that EPA’s 2012 cellulosic numbers grossly overestimated the amount of fuel actually produced in the market (Greenwire, Jan. 25).

API also argued in its new lawsuit that the agency was nine months behind schedule in releasing its final numbers for 2013.

By statute, EPA is required to issue its final annual renewable fuel requirements by Nov. 30 of the previous year. The agency has consistently fallen behind schedule and issued the 2013 numbers in early August of this year. A proposal for 2014 is currently at the Office of Management and Budget, though its timeline for release remains uncertain given the government shutdown.

The oil trade group, which has waged a war against the renewable fuel standard both in the courts and in Congress, said the 2013 targets showed the unworkable nature of the standard.

“The 2013 mandates are an example of why EPA can’t be relied upon to implement the RFS effectively and in the interest of consumers,” Ng said. “Ultimately, Congress must fully repeal this unworkable and costly mandate.”

The domestic ethanol industry, which has increased rapidly over the last few years largely because of the renewable fuel standard, slammed the oil trade group’s latest lawsuit.

Bob Dinneen, president and CEO of the Renewable Fuels Association, called the move “a lawsuit in search of a problem,” while Tom Buis, CEO of Growth Energy, said it “comes as no surprise.”

“Big Oil is doing, and continues to do, everything possible to undermine the RFS and prevent competition in the marketplace from higher blends of renewable fuel,” Buis said.