Critics pounce on EPA’s proposed renewable fuel targets

Source: Marc Heller, E&E reporter • Posted: Thursday, May 19, 2016

U.S. EPA’s newly proposed renewable fuel targets drew immediate criticism and pleas for the agency to reconsider.

EPA this afternoon called for 14.8 billion gallons of conventional ethanol to be mixed into fuel in 2017, slightly shy of the 15 billion-gallon target set in the federal renewable fuel standard. As it did for 2016, EPA used its waiver authority under the renewable fuels law to set a target less than Congress dictated, citing market conditions and refiners’ stated capacity to meet the level.

The proposal calls for a total renewable fuels level of 18.8 billion gallons, slightly higher than the 2016 target of 18.11 billion gallons.

Groups representing ethanol companies and farmers said EPA exceeded its authority in waiving congressionally set targets. Other than making the announcement on time — a goal the agency missed for the past two years — officials fell short of improvements in running the program, they said.

“For months, EPA has been saying it plans to put the program ‘back on track,'” Bob Dinneen, president and chief executive officer of the Renewable Fuels Association, said in a press release. “Today’s proposal fails to do that. The agency continues to cater to the oil industry by relying upon an illegal interpretation of its waiver authority and concern over a blend wall that the oil industry itself is creating.”

In setting targets lower than Congress directed, EPA has cited concerns that refiners can’t meet higher levels.

Ethanol advocates take issue with that position. DuPont Co., branching into cellulosic ethanol, said EPA “has again injected infrastructure constraints into the calculation, rather than setting biofuels volumes based on the industry’s ability to supply fuel.”

And Growth Energy, representing ethanol producers, said retailers and the auto fleet are capable of providing greater amounts of the fuel.

The American Petroleum Institute said the Obama administration was doing the bidding not of the oil industry but of ethanol producers.

“Consumers’ interest should come ahead of ethanol interests,” API downstream group director Frank Macchiarola said in a press release. “EPA is pushing consumers to use high ethanol blends they don’t want and that are not compatible with most cars on the road today.”

The agency’s announcement comes as EPA defends its handling of the renewable fuel standard — including the use of waivers — in federal court, and as some Republicans in Congress press for the program’s repeal or overhaul. Sen. Jim Inhofe (R-Okla.), chairman of the Senate Environment and Public Works Committee, has said corn ethanol use would probably remain steady without the federal mandate.

“The agency’s numbers continue to disregard market realities related to demand for gasoline and the availability of cellulosic biofuel,” Inhofe said in a statement today. “As I’ve said before, the RFS is a flawed program that creates nothing but uncertainty and unnecessary volatility for our refiners.”

Congress passed the program in 2005 and updated it in 2007 to encourage alternatives to petroleum. Congress included fuel blend targets through 2022, but EPA is free to waive those levels under certain conditions.

After 2022, under the program, the congressional mandates end and EPA may set targets at its discretion.

Today’s proposal is open for public comment until July 11. EPA set a public hearing for June 9 in Kansas City, Mo.

Of the total 18.8 billion gallons, 4 billion gallons would be advanced biofuels and 312 million gallons would be cellulosic ethanol. Advanced biofuels would rise from 3.61 billion gallons and cellulosic ethanol from 230 million gallons in the 2016 targets.

“The Renewable Fuel Standards program is a success story that has driven biofuel production and use in the U.S. to levels higher than any other nation,” Janet McCabe, acting assistant administrator for EPA’s Office of Air and Radiation, said in a press release.