Biofuel: Governors Want Federal Policies to Help Expand Markets

Source: By Todd Neeley, DTN/Prpgressive Farmer • Posted: Friday, March 10, 2017

The Governors’ Biofuels Coalition on Monday asked President Donald Trump to support a number of changes to federal law to support biofuels production.

In a letter signed by Nebraska Gov. Pete Ricketts, chairman of the coalition; Iowa Gov. Terry Branstad, Trump’s nominee to be the next U.S. ambassador to China; and South Dakota Gov. Dennis Daugaard, the coalition asks the new administration to support changes to a number of federal policies to help expand markets for ethanol and other biofuels.

Among the requests, the governors ask the Trump administration to change the fuel volatility limitations placed on E15 in current law.

For years, the ethanol industry has called on the U.S. Environmental Protection Agency to equalize the Reid vapor pressure, or RVP, regulations for E10 and E15 during the summer driving season. Because of those requirements, E15 has largely not been available to some wholesale suppliers and retailers who receive only E10 blends.

Ethanol increases the RVP, which measures the release of volatile organic compounds into the atmosphere. The RVP for gasoline is the lowest, or most stringent, during the summer months when the weather is hot. E10 currently receives an RVP waiver, which keeps the fuel in compliance with RVP requirements year-round. However, E15 is not given the same waiver, so it can’t be sold in the summer.

The RVP regulation is believed to be a subject of discussion among ethanol industry groups and the White House about the future of the Renewable Fuel Standard.

The coalition includes governors from Alabama, Ohio, Arkansas, Maryland, Oregon, Colorado, Minnesota, South Dakota, Hawaii, Missouri, Tennessee, Idaho, Montana, Washington, Illinois, Nebraska, Wisconsin, Indiana, New York, Iowa and Kansas.

“The U.S. Environmental Protection Agency should provide parity for E10 and higher ethanol blends,” the governors’ letter said.

“EPA’s erroneous legal analysis that E15 — although it is an even cleaner fuel than E10 — does not qualify for the decades-old partial exemption of E10 from the Clean Air Act’s fuel volatility limitations discriminates against higher blends of ethanol and demonstrates unnecessary red tape from Washington, D.C.”

In addition, the governors call on the administration to update corn ethanol’s lifecycle carbon emissions profile to reflect advances in ethanol production technology.

“The EPA has failed to update lifecycle carbon findings for a decade, thereby sanctioning the use of obsolete data,” the governors said.

“This distorts the public’s perception of biofuels’ environmental benefits. Recent studies show that an effective way to reduce the carbon in gasoline is the widespread use of high-octane, lower-carbon gasoline blends.”

What’s more, the coalition said EPA should enforce the Renewable Fuel Standard as approved by Congress.

The governors asked for EPA to update the 2014 motor vehicle emission simulator model to prohibit spurious comparisons of high- and low-ethanol emissions factors.

The so-called MOVES model — which EPA requires the states to use in developing their state implementation plans — “negatively impacts those who live in the nation’s largest cities or near congested roadways,” the governors said.

In April 2016, a federal court rejected an effort by the states of Kansas and Nebraska to overturn the EPA’s model. The states tried to challenge the use of the model because they alleged it concludes that when ethanol is added to gasoline it increases fuel emissions. So states not in compliance with air quality standards are required to limit ethanol blending in motor-vehicle fuel to return to compliance.

Kansas and Nebraska have argued that using the model would lead to a decrease of demand for ethanol, as well as lead to lower prices for corn and ethanol.

“We write on behalf of governors from states across the nation who believe that two of America’s great treasures are agriculture and renewable fuels and to commend you for your positive statements about biofuels over the last year,” the governors said in the letter to Trump.

“Our states are the home to over 200 biorefineries that are producing tens of thousands of jobs, sequestering tons of carbon, saving millions of barrels of foreign oil, and making enormous financial contributions to our states’ and the nation’s economies. As governors, we agree that one of the best ways to meet the nation’s energy needs is to expand biofuels production.”