At a hearing, the EPA’s 2017 biofuels target is attacked from both directions

Source: By The Associated Press • Posted: Friday, June 10, 2016

KANSAS CITY, Mo. (AP) — The Obama administration’s proposal to boost the amount of ethanol and other renewable fuels blended into gasoline produced at least one consensus Thursday during the issue’s only public hearing: Few people — if anyone — are entirely satisfied with the plan.

Ethanol advocates, mostly from Midwest farming states, testified that the Environmental Protection Agency’s target for biofuels next year again falls short of what Congress had in mind.

Oil companies countered that the market, not the government, should dictate how much ethanol goes into gas, and that the target should be lowered.

The head of a renewable fuels trade group said Thursday he was “increasingly confident” that the EPA could be swayed to push the targets upward, citing the weight of about 140 people registered to testify — most of them pressing the EPA to call for more ethanol use when it issues its final rule, expectedly by the end of the year.

“If they don’t (boost the goal), you have to question the commitment of the administration,” Bob Dinneen, the Renewable Fuels Association’s president and CEO, said as the hearing unfolded in a Kansas City, Missouri, hotel.

The EPA oversees the decade-old Renewable Fuel Standard program, commonly called the ethanol mandate, which sets out how much corn-based ethanol and other renewable fuels refiners must blend into gasoline. The program’s goals are to reduce dependence on foreign oil, help address global warming and bolster the rural economy.

Conservative critics call it a market-meddling giveaway, a subsidy that ought to die. Environmental critics call it a waste of edible corn.

Next year’s target of 18.8 billion gallons of renewable fuel, mostly ethanol — although 700 million gallons bigger than 2016’s requirement — is still less than the 24 billion gallons Congress specified in the law.

Nebraska Gov. Pete Ricketts, vice chairman of the Governors’ Biofuels Coalition, testified against the proposed changes.

“A strong RFS means more jobs here at home, greater energy security and a cleaner environment,” he said.

Todd Sneller, Nebraska Ethanol Board administrator, said it was “important to remind the EPA that Congress intended for the RFS to provide a robust schedule for the production and marketing of renewable biofuels like ethanol.”

The EPA has flexibility to make adjustments, called waivers, in the yearly targets based on conditions; this year the agency cites fuel market constraints and slower-than-expected development of next-generation biofuels, made from agricultural waste such as wood chips and corncobs.

Simply parroting Congress’ targets “would be inappropriate, in our view,” said Benjamin Hengst of the EPA’s Office of Transportation and Air Quality. He said the proposed targets still “are consistent with Congress’ clear goal of increasing renewable fuel.”

“We believe the proposed standards to be ambitious and achievable,” he said.

More use of renewable fuels is good news for the agriculture and ethanol industries, which aggressively pushed back against a 2013 proposal to cut the amount of ethanol mixed into fuel. On Thursday, their representatives said Congress’ intentions were doable.

“The EPA is not keeping its side of the deal,” said Chip Bowling, the National Corn Growers Association’s president. “Our message today is clear: Any reduction of statutory targets takes America backward.”

On the other hand, Patrick Kelly of the American Petroleum Institute, the biggest oil lobby, which has spent years fighting the program, said the EPA should further cut the amount of ethanol in gasoline. Until Congress kills the requirement altogether, he said, “EPA must continue to address the outdated volume requirements.”