EPA Launches Review of Obama Regulation; Ethanol Industry Could Benefit

Source: By Todd Neeley, DTN/Progressive Farmer • Posted: Thursday, March 16, 2017

OMAHA (DTN) — President Donald Trump’s announcement to review fuel economy standards set by his predecessor could give the ethanol industry a chance to make its case for including fuels along with technologies to improve energy efficiency.

The U.S. Environmental Protection Agency and the U.S. Department of Transportation on Wednesday announced they would revisit the standards. Trump made an announcement during a speech in Detroit.

The Obama administration’s rule from 2012 finalized standards to increase fuel economy to the equivalent of 54.5 miles per gallon for cars and light-duty trucks by model year 2025.

Some ethanol industry groups argue EPA should identify the fuels that could help meet the standards.

Bob Dinneen, president and CEO of the Renewable Fuels Association, said in a statement that taking a second look at the rule could benefit the ethanol industry.

Recent evaluations of corn ethanol have found the fuel has 43% lower carbon emissions than gasoline. The ethanol industry has been pushing the agency to update ethanol’s carbon footprint data in the Renewable Fuel Standard to reflect the current state of ethanol-production technology.

“Today’s actions allow the opportunity for EPA to slow down, remove politics from the process, and take a more comprehensive approach to fuel-economy standards,” Dinneen said.

In 2012, the EPA and the National Highway Traffic Safety Administration promulgated final regulations that established the fuel economy and greenhouse-gas standards for 2017 to 2025.

The final rule included a requirement that the agencies conduct a midterm evaluation for the 2022 to 2025 standards to determine whether the standards were still appropriate in light of new data.

The RFA was one of several groups that filed comments focused on the role fuels have in enabling more-efficient vehicle technologies.

“By rushing through a cursory review to finalize a rule before the transition, the agency clearly did not fully consider our comments, or the comments of other stakeholders,” Dinneen said.

In that mid-term evaluation, EPA identified technologies that would improve energy efficiency and reduce greenhouse gases. But EPA failed to consider the fuels that will enable those technologies, Dinneen said.

High-octane, low-carbon fuels like ethanol can play a “significant role” in helping to meet fuel-economy targets, he said.

“That is an omission that must be addressed moving forward if future vehicles can in fact help us address climate change without backsliding on other critical air quality and public health priorities,” Dinneen said.

Brian Jennings, executive vice president of the American Coalition for Ethanol, said the move by EPA will put the ethanol industry in a better position. Jennings noted the Trump administration’s action doesn’t roll back the higher fuel economy — Corporate Average Fuel Economy — standards, but requires a new review.

“This is good news because reconsideration of the 2022-2025 standards will enable us to emphasize the need for EPA to allow high-octane, high-ethanol blends to be used in meeting future efficiency standards,” Jennings said.

In addition, Jennings said the review will allow the industry to make the case for “meaningful incentives” for flexible-fuel vehicles and engines designed to operate most efficiently on high-octane, high-ethanol blends.

“Currently, the standards are biased in favor of electric vehicles,” he said, “and ignore the role that FFVs and engines optimized to run on blends in the range of E25 to E40 can play in meeting fuel economy and GHG reduction goals.”

EPA Administrator Scott Pruitt said in a statement the current standards are “costly” for automakers and the American people.

“We will work with our partners at DOT to take a fresh look to determine if this approach is realistic,” Pruitt said.

“This thorough review will help ensure that this national program is good for consumers and good for the environment.”

EPA announced it was revisiting the so-called midterm evaluation process established as part of the 2012 greenhouse gas emissions standards for model years 2017 to 2025.

The evaluation requires EPA to determine by April 1, 2018, whether the 2022-2025 standards established are “appropriate,” according to a news release.

If the new evaluation finds that meeting the standards is not feasible, the EPA would submit a new proposal for public comment.

In a joint statement, House Environment Subcommittee Chairman John Shimkus, R-Ill., and Digital Commerce and Consumer Protection Subcommittee Chairman Bob Latta, R-Ohio, welcomed the announcement.

“We applaud President Trump on his decision to resume a collaborative examination of the stringent fuel economy standards rather than the midnight political decision of the previous administration,” they said.

“Our nation’s motor vehicles are getting more efficient and will continue to do so, but we must ensure that the standards set are not rigid and that they do not raise sticker prices or threaten the auto industry.”

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