Biofuel groups sue Obama admin over RFS

Source: Tiffany Stecker, E&E reporter • Posted: Tuesday, January 12, 2016

Seven pro-biofuel organizations are challenging U.S. EPA’s latest mandates under the renewable fuel standard program, the first of what many observers expect will be a long legal battle over the legally mandated arrangement.

Petitioners — including Americans for Clean Energy, the American Coalition for Ethanol, the Biotechnology Innovation Organization, Growth Energy, the National Corn Growers Association, the National Sorghum Producers and the Renewable Fuels Association — filed their challenge in the U.S. Court of Appeals for the District of Columbia Circuit on Friday.

Critics of EPA’s decision say the agency failed to correctly interpret its waiver authority under the RFS law. The 2007 Energy Independence and Security Act, which expanded the RFS to boost biofuels production to 36 billion gallons annually by 2022, allows EPA to waive the yearly statutory biofuel blending goals if those targets are unrealistic.

EPA released a final rule for 2014, 2015 and 2016 biofuel requirements in November. The agency continued to raise year-on-year ethanol volumes through 2016 but cut back from the levels Congress mandated nearly a decade ago (E&ENews PM, Nov. 30, 2015).

In the final rule, EPA invoked its waiver authority based on the ability of oil refiners to blend and distribute biofuels because of the relative lack of infrastructure to bring gasoline with ethanol blends of higher than 10 percent to consumers.

Biofuel groups say a waiver should only apply when the industry is unable to produce enough biofuel. They believe EPA’s interpretation in the final rule allows the petroleum industry more leverage in deciding whether more biofuels will make it to the nation’s fuel pumps.

“By focusing on fuel distribution capacity and demand rather than supply, and by failing to consider surplus [renewable identification numbers] from prior years, the agency erroneously concluded that there was an inadequate supply of renewable fuel to justify a waiver of the levels established by Congress,” said the statement from the petitioners.

Renewable identification numbers are credits that represent gallons of biofuel production that oil refiners use to comply with the program.

The American Fuel and Petrochemical Manufacturers group responded with a statement in support of EPA’s use of the waiver. Oil and gas interests argue that increasing the percentage of biofuels in the fuel supply, particularly corn ethanol, could pose risks to vehicles.

“We are confident that the D.C. Circuit will uphold EPA’s legal authority” to use the waiver, said AFPM President Chet Thompson. “This lawsuit is yet another attempt by the ethanol industry to use government mandates to force higher percentage ethanol blends upon consumers.”