Back-and-forth RFS campaigns continue as EPA heads into home stretch

Source: Amanda Peterka, E&E reporter • Posted: Thursday, May 1, 2014

Renewable fuel standard lobbying is continuing to build as U.S. EPA reaches the final stages of weighing a proposed reduction of the nation’s biofuel blending mandates.

Today, two pro-renewable fuels groups announced that they would be launching ads Sunday charging the American Petroleum Institute with using Saudi Arabian oil money to fight the federal biofuels mandate.API also announced that it would run the next in a series of ads calling for EPA to reduce the requirements for refiners to use renewable fuels. The group also released a letter sent to EPA Administrator Gina McCarthy yesterday urging her to set the ethanol mandate no higher than 9.7 percent of the nation’s total gasoline supply.

The campaigning comes as industry watchers expect EPA to send its final 2014 renewable fuel targets to the White House’s Office of Management and Budget for review in order to meet a self-imposed June deadline for their release.

“It has to go to OMB in a matter of days or a week or so. We expect it to go over to OMB at any time at this point,” said Bob Greco, API’s director of downstream activities.

Under the renewable fuel standard passed by Congress in 2007, EPA is required to set yearly mandates for conventional ethanol and advanced biofuel use. For the first time, the agency has proposed to reduce the targets this year, largely on oil industry concerns about the limits to the amount of ethanol that can be used in gasoline (E&ENews PM, Nov. 15, 2013).

In ads that are scheduled to appear on Sunday cable television shows, Americans United for Change and are charging that a subsidiary of Saudi Aramco, the state-owned oil company, pays API membership dues that have helped fund the oil and gas group’s campaign against the renewable fuel standard.

The groups today also released tax documents showing that a registered Saudi Arabian lobbyist, Tofiq Al-Gabsani, was on API’s board of directors between 2010 and 2011. He was one of about 40 board members.

“The American people deserve to know who is funding ads that are trying to lengthen and deepen this country’s addiction to crude oil,” Brad Woodhouse, Americans United for Change, said in a press call. “They need to know that the Saudis are sitting on the board of the American Petroleum Institute.”

In response to the campaign, API pointed out that numerous foreign companies also support the U.S. biofuels industry, including Spain’s Abengoa Bioenergy and Dutch-based Royal DSM.

API said that its membership list was publicly available on its website and that it acts as an advocacy presence for oil and gas companies that have U.S. operations.

“Given the U.S. energy renaissance, many international companies have a substantial presence in the U.S. as employers and taxpayers, just as many U.S. companies have an international presence,” API spokesman Carlton Carroll said in an email.

API has launched several campaigns over the last year and a half to repeal the renewable fuel standard. The latest series of ads features consumers complaining to lawmakers about damages caused by increased ethanol consumption in the United States.

API has not given cost figures for its RFS campaigns but says it has spent “significant” amounts of money. The group will launch a new ad on TV, radio and print media next week in the nation’s capital, Greco said today.

API is also continuing to pressure EPA directly in the face of public comments by McCarthy suggesting that the agency will increase its proposed targets based on recent updates in gasoline supply. In its letter yesterday, the oil and gas trade group said EPA is trying to “micromanage” the RFS based on slight changes in gasoline consumption.

Keeping the ethanol mandate at 9.7 percent, even though most gasoline contains 10 percent ethanol, provides for an appropriate margin of safety, API said.

“A 9.7 percent limit represents the minimum ‘buffer’ warranted to safeguard against the negative economic consequences for consumers from hitting the ethanol blend wall,” Greco said in a press call today.

But pro-renewable fuel standard groups are charging that API is keeping up its full-court press against the renewable fuel standard merely to maintain a petroleum monopoly on transportation fuel.

“API’s agenda is very simple. And in fact it’s quite greedy,” Woodhouse said. “They want the EPA to cut the amount of renewable fuel in gasoline while raising the amount of crude oil.”