API’s new campaign seeks repeal of biofuel mandates

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, January 16, 2013

The American Petroleum Institute is rolling out a new media campaign, a major goal of which is to push for repeal of the nation’s biofuel mandates.

The campaign, which started this week with a national television ad promoting domestic refining, will also push for “reasonable regulation” over the oil industry and the approval of the Keystone XL pipeline, representatives from API said today. Called “Investing in America’s Future,” it will include TV, print, radio and online ads both in the Beltway and across the country.

API did not give a cost figure for the new advertising, but Cindy Schild, refining senior manager, said that the group has an “all hands on deck” approach to the campaign.

“We are devoting a significant amount of resources,” Schild said. The campaign “is focused on the benefits that we can provide to our communities, for American lives. … Maintaining a strong domestic refining industry is really critical to our national and economic security.”

A major goal of the campaign, the oil industry group said, will be to repeal the renewable fuel standard, which mandates that certain levels of traditional ethanol and advanced biofuels be blended into the nation’s motor fuel supply each year.

“We are encouraging Congress to take it up this year,” said Patrick Kelly, API’s downstream senior policy adviser, regarding an RFS repeal. “Essentially, what we would like to see is a complete repeal of the RFS. It’s not specific provisions of the RFS we’re looking to repeal. It is the entire program.”

On a call today, Kelly said that refiners support renewable fuels for their blending characteristics but that the current version of the standard, which stems from 2007, has become “unworkable” given that the targets in it exceed 10 percent of the nation’s total gasoline supply, or what is known commonly as the “blend wall.” While U.S. EPA has approved ethanol for use in 15 percent blends with gasoline in some vehicles, refiners argue that the expanded ethanol use is not safe for cars and gas stations.

API and the American Fuel & Petrochemical Manufacturers have also challenged EPA’s levels for cellulosic biofuel, or the next generation of alternative fuel, made from plant-based inputs other than corn. The levels, API said today, cause refiners to be penalized for not using a fuel that doesn’t exist in significant quantities in today’s market.

“We believe that the mandate should be set at realistic projections of what can be expected in the marketplace in the subsequent year,” Kelly said. “I don’t think it’s accurate to say that those facilities will not be producing ethanol ever or any cellulosic biofuel. I think it’s more a question of when. In order to work under a realistic and workable mandate, our companies need the certainty of EPA’s projections.”

Kelly said that API would be open to either a stand-alone RFS repeal bill or a more comprehensive set of regulatory relief measures that also includes measures to address several new regulations that EPA is expected to soon release.

Those include new refinery greenhouse gas rules, ambient air quality standards for ozone and fine particulates, and what are known as Tier 3 sulfur rules.

“We’re open to exploring avenues with congressional staff to figure out the right bill at the right time in the right place,” Kelly said.

Fuels America, a coalition of biofuel groups and supporters, today blasted API’s new campaign, saying that the oil industry would like to have a continued monopoly over the nation’s transportation fuel.

“The oil industry is rehashing tired old arguments to hide the fact that they have had years to comply with the RFS,” Fuels America said in a statement. “They should not be rewarded for dragging their feet.”