EPA boosts ethanol requirement for 2017

Source: Marc Heller, E&E News reporter • Posted: Monday, November 28, 2016

U.S. EPA Friday said it will require an additional 200 million gallons of ethanol to be mixed into the nation’s fuel supply next year, raising the level from its proposal earlier this year that drew criticism from renewable fuel advocates.

The EPA-mandated level of 15 billion gallons of conventional biofuel — mainly corn ethanol — for 2017 meets congressional requirements in the renewable fuels law.

In its final rule, EPA increased total renewable fuel to 19.28 billion gallons, from 18.8 billion in the proposed rule, and lowered cellulosic biofuel slightly from 312 million gallons to 311 million gallons.

“We believe that the RFS program can and will drive renewable fuel use, and we have considered the ability of the market to respond to the standards we set when we assessed the amount of renewable fuel that can be reasonably attained in 2017,” the agency said in the rule, to be published in the Federal Register.

Pro-ethanol groups praised EPA’s action, noting that the agency broke with its past practice of using a waiver authority in the law to set levels below what Congress required in the 2008 law.

Petroleum companies, which oppose ethanol mandates, renewed their call for dismantling the renewable fuel standard.

“The RFS mandate is a bad deal for the American consumer,” said Frank Macchiarola, downstream group director for the American Petroleum Institute, representing oil and gas companies. “Today’s announcement only serves to reinforce the need for Congress to repeal or significantly reform the RFS. Democrats and Republicans agree this program is a failure.”

Members of Congress who have called for capping ethanol at 9.7 percent in gasoline criticized the decision in a statement.

“These higher volumes of ethanol will increase the costs of fuel and food for our constituents. In addition, they are damaging to the engines of older vehicles, and to small engines used in boats, recreational vehicles, chainsaws, lawnmowers and similar equipment,” said the lawmakers, including Reps. Bill Flores (R-Texas) and Peter Welch (D-Vt.).

The National Corn Growers Association was among the groups hailing the announcement, which it said steers the RFS back in the direction supporters wanted.

“The Renewable Fuel Standard has been one of America’s great policy success stories. It has improved our energy independence, our air quality, and our rural economies,” NCGA President Wesley Spurlock said in a statement. “Although we believe the EPA did not have authority to reduce the ethanol numbers in the first place, we are pleased to see the [renewable volume obligations] finally back on track.”

In addition to setting conventional biofuel levels, the final rule dictates a volume of biomass-based diesel of 2.1 billion gallons in 2018, up from 2 billion in 2017.

EPA’s action comes as the agency continues to face legal challenges both from ethanol advocates and critics to its prior implementation of the RFS, including renewable fuel levels for 2017 that were below congressional mandates.

Oil and gas companies say refiners and distributors can’t satisfy the increasing levels of biofuel the law envisions. Their argument that the law risks breaching the “blend wall” of 10 percent ethanol in gasoline didn’t appear to sway EPA toward less ambitious goals.

“We have moved past the imaginary blend wall,” said Brooke Coleman, executive director of the Advanced Biofuels Business Council.

The announcement effectively hands the policy over to the incoming Trump administration. Coleman said he doesn’t expect the new administration to reconsider the rule, despite the president-elect’s pledge to view regulations issued at the end of the Obama administration. The RFS rule is already mandated by law, so it isn’t a last-minute move, he said.

“Team Trump supported the RFS loudly and unequivocally and then won the election by running the table in the middle of the country, where the RFS has the greatest positive impact on the economy. So reversing direction on the RFS, undercutting a robust manufacturing base and increasing our dependence on foreign oil would be a curious move for the president-elect,” Coleman said.