EPA considering a cut in ethanol mandate in 2014

Source: 3:15 PM, Oct 11, 2013 | by Christopher Doering, Des Moines Register • Posted: Sunday, October 13, 2013

The Environmental Protection Agency is considering a reduction in the amount of ethanol that refiners would need to blend into the U.S. motor fuel supply in 2014.

Draft documents from the EPA show it has considered cutting the mandate to 15.21 billion gallons for renewable fuels in 2014 down from 18.15 billion gallons initially required in the 2007 Renewable Fuel Standard, a law that requires refiners to buy alternative fuels made from corn, soybeans and other products to reduce the country’s dependence on foreign energy.

The agency would call for the use of 13 billion gallons of conventional corn-based ethanol, a drop from 13.8 million gallons this year. Iowa is the nation’s largest ethanol producer.

Agriculture Secretary Tom Vilsack said the EPA is still working on developing a draft proposal, and cautioned against accepting the numbers being discussed as final.

“The EPA has not yet reached a final decision regarding that proposal, and will not do so until all stakeholders have had the opportunity to comment and to provide input on what is required for this industry, and the rural communities that depend on it, to continue to thrive,” said Vilsack.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, said his trade group has been told that the “old draft document that was leaked is not the one under consideration” by the White House.

Earlier this year, the EPA indicated it would reduce the ethanol mandate in 2014, acknowledging that the increasing levels laid out by Congress in 2007 are unrealistic.

Growth Energy, the largest trade group representing the ethanol industry, said there is a long way to go before the 2014 blending levels become final.

“Obviously, someone was irresponsible in leaking such market sensitive information,” said Tom Buis, chief executive of Growth Energy. “Because of the dramatic economic impact on commodity markets there should by an immediate investigation by the Justice Department, and the Commodity Futures Trading Commission to determine if this was an attempt to manipulate markets such as corn futures, ethanol futures and/or RINS markets.”