EPA hears lawmaker rage, but real action may be in courts

Source: Marc Heller, E&E reporter • Posted: Thursday, February 25, 2016

U.S. EPA is dashing the cellulosic ethanol industry’s dreams by setting renewable fuel mandates too low, Sen. Barbara Boxer (D-Calif.) said yesterday.

Boxer, the ranking Democrat on the Senate Environment and Public Works Committee, rapped EPA’s use of its waiver authority under the renewable fuel standard program to set fuel levels lower than Congress mandated in the 2007 RFS law.

“It’s a mixed signal to folks out there thinking about making investments,” Boxer said at an oversight hearing on the program.

She was responding to testimony by EPA’s acting assistant administrator for air and radiation, Janet McCabe, who said the agency is committed to increased use of alternative fuels to reduce carbon emissions.

McCabe defended her agency’s actions amid questioning from Boxer and Sens. Jeff Merkley (D-Ore.) and Deb Fischer (R-Neb.), who complained that EPA sends a “message of uncertainty” to the industry by missing deadlines to set annual fuel mixture levels and then calling for levels lower than Congress dictated.

McCabe said the levels Congress set “simply were not achievable.” The agency adopts a waiver only to the point it determines is necessary, she said, and has cited increased consumption of gasoline and diesel among other factors.

EPA in November set a renewable fuel level for 2016 of 18.1 billion gallons, an increase of 1.8 billion gallons, or 11 percent, from 2015. That’s short of the congressional mandate of 22.25 billion gallons for 2016.

“Our job, we believe, is to evaluate and make sure the levels we set will be ambitious but will not be impossible to achieve,” McCabe said.

Ethanol industry groups have challenged EPA’s assertion that greater levels weren’t attainable. In a telephone interview yesterday, Bob Dinneen, president and CEO of the Renewable Fuels Association, called McCabe’s comment “utter nonsense” and said EPA has been too timid in setting levels.

“That is an affirmation that the agency has adopted the narrative of the oil companies,” Dinneen said.

The agency faces competing pressure in Congress from Democrats who support the RFS and want goals set higher and Republicans — such as committee Chairman James Inhofe (R-Okla.) — who want to repeal or rewrite it. But the lines aren’t strictly partisan, as Republicans from corn-producing states tend to support mandates that boost corn ethanol.

As spirited as the debate is in Congress, movement may be more likely in federal court, where EPA faces a flurry of lawsuits from industry groups over the November regulations. Among other complaints, oil refiners say the agency didn’t give them enough notice to meet the requirement for 2016.

Inhofe said he would do away with the mandate, confident that its disappearance wouldn’t hurt corn farmers and that fuel blenders would continue to add ethanol as an octane booster.

For Inhofe, another question is what happens to the mandate after 2022, the last year for which Congress set renewable fuel levels. He asked McCabe whether EPA would run the RFS beyond that point, and she said the agency would — although she later conceded she couldn’t predict how future EPA officials might handle renewable fuel levels.

Under prodding from Inhofe, McCabe defended the agency’s delayed rulemaking, commenting on the “very complex” nature of the fuel supply and “divergent views” within the industry about what levels can be met — and she told the panel that EPA doesn’t like missing deadlines.

McCabe said EPA intends to propose the next renewable fuel levels, for 2017, on time, but added, “I don’t control the world.”