EPA chief: ‘production levels & demand matter’ in RFS decision

Source: By O. Kay Henderson, Radio Iowa • Posted: Friday, August 11, 2017

Scott Pruitt

Environmental Protection Agency administrator Scott Pruitt said during a trip to Iowa that regulators cannot ignore past performance when setting the federally mandated production levels for renewable fuels.

Iowa officials and industry groups have asked the EPA to raise the proposed volume levels for soybean-based biodiesel and for “cellulosic” ethanol that’s made from plant material rather than just the starch from corn kernels.

“Production levels and demand matter and that’s something that’s going to be a major part of how we set those limits,” Pruitt said during an interview with Radio Iowa this past Tuesday.

Leaders in the biodiesel industry argue the production mandate Pruitt’s agency has proposed for biodiesel in 2019 is lower than current consumption. And advocates urge Pruitt to boost the 2018 production mandate for the emerging cellulosic ethanol industry. Pruitt called that a “blue sky approach.”

“Has the infrastructure been built to increase production levels?” Pruitt asked. “The markets haven’t demonstrated that yet.”

Pruitt said he doesn’t want his agency “being used” to spur the expansion of biofuel facilities.

“We’re supposed to set volume obligations that are consistent with objective criteria,” Pruitt said. “…The most important of those criteria include, in my view, production levels and demand.”

The EPA’s recommended production level for “conventional” ethanol that’s made from corn starch is maxed out 15 billion gallons. Pruitt suggested that cap might need to be raised, plus Pruitt said it’s time to explore how to boost exports of American-made ethanol.

“We’ve got tremendous opportunity to continue growing this market and seeing tremendous progress being made in ethanol and in this category overall,” Pruitt said.

Pruitt, the former attorney general of Oklahoma, said he will fulfilling his promise that the EPA will meet the November deadline for setting next year’s biofuels mandates. There were delays in setting the yearly Renewable Fuels Standard during President Obama’s second term.