EPA faces ’14 accusations on ethanol

Source: By Tim Devaney, The Hill.com • Posted: Sunday, September 14, 2014

The American Petroleum Institute and renewable energy groups are furious with the Environmental Protection Agency for “playing politics” with the nation’s ethanol mandate.

These groups rarely see eye to eye, but they both agree the Obama administration is flip-flopping on the Renewable Fuel Standard to save face as the midterm elections approach — or as Jon Doggett of the National Corn Growers Association put it, “for all the wrong reasons.”

“Again and again and again, we find ourselves at the mercy of policies that can be changed for all the wrong reasons,” he said.

The Renewable Fuel Standard requires oil refiners to mix a certain amount of ethanol into their fuel before they ship it off to gas stations around the country.

Groups like the American Petroleum Institute (API) always want the mandate to be lowered to increase the amount of crude oil in the supply, while some green groups also want to abolish the mandate, but for other reasons.The Environmental Working Group, for instance, argues that the Renewable Fuel Standard encourages farmers to cut down more trees so they have more fields to grow corn — a process that may actual use more energy and emit more greenhouse gases than traditional fuels.

But the National Corn Growers Association and other pro-ethanol groups want the mandate to be raised.

Last November, the EPA proposed to cut the ethanol mandate for the first time to 15.21 billion gallons from 16.55 billion gallons in 2013, because some say ethanol is raising gas prices at the pump.

EPA Administrator Gina McCarthy is now signaling that the agency will do a 180 degree turn and actually raise the ethanol mandate when it releases the new Renewable Fuel Standard in the coming weeks.

“Moving forward, the administration is very committed to renewable fuels and to having a strategy that consistently increases that,” McCarthy said earlier this month during a speech in New York City when asked about the upcoming ethanol mandate.

McCarthy’s comments have API up in arms, because what the oil industry once thought of as a step in the right direction has now all but disappeared.

Bob Greco, the API’s top fuels expert, says the Obama administration is caving to political pressure to help Democrats in the midterm elections.

In the Iowa Senate race, Rep. Bruce Braley (D) is running to fill retiring Sen. Tom Harkin’s (D-Iowa) seat and has asked the administration to protect the ethanol mandate, which he argues has created tens of thousands of jobs in his corn-growing state.

“You don’t have to be a political insider to see how the Iowa Senate race — and the White House’s fear they will lose control of the Senate — plays into this decision,” Greco argued.

“Rather than protecting [Senate Majority Leader] Harry Reid’s job, Obama ought to be putting the interests of consumers first,” Greco said.

Renewable energy groups have also expressed frustration with the Obama administration, arguing political pressure affects the Renewable Fuel Standard.

“Politics are playing a role on both sides and not just in the Iowa Senate race,” Doggett said.

The ethanol mandate has long been sacrosanct in Iowa, one of the nation’s top corn-producing states. Over the years, candidates for president in both parties have backed the mandate while seeking to win the nation’s first presidential caucus state.

The renewable energy groups point out that McCarthy hinted the EPA is considering raising the mandate only because demand for gasoline is growing, but if demand were to fall again they’re afraid they could be stuck in the same position consistently seeking a higher mandate.

Brent Erickson, executive vice president of the Biotechnology Industry Organization, said lack of consistent growth in the Renewable Fuel Standard has “undercut” and “chilled” investment in the industry.

Steve Hartig, general manager at Poet DSM Advanced Biofuels, called the EPA’s recent fluctuations on the Renewable Fuel Standard “very discouraging.”

“What we’d like is for them to stick with the law and move forward,” Hartig said.