EPA to reconsider 2011 cellulosic target

Source: Amanda Peterka, E&E reporter • Posted: Friday, April 5, 2013

U.S. EPA told a federal court yesterday that it will voluntarily reconsider its 2011 target for next-generation biofuels, representing another win for oil industry groups that allege the agency is mandating the use of “phantom fuels.”

In the document filed with the U.S. Court of Appeals for the District of Columbia Circuit, EPA said it used “basically the same method” to determine the 2011 target for cellulosic biofuels as it did for last year’s, which the D.C. appeals court struck down in January (Greenwire, Jan. 25).

“The petitions for reconsideration of the 2011 standard raised the same argument that the court addressed” in the 2012 lawsuit, “that EPA cannot set a cellulosic biofuel standard with a tilt for promoting growth in the cellulosic biofuel industry,” EPA wrote in the court filing.

The agency has asked that the court stay the lawsuits filed by the American Petroleum Institute, American Fuel & Petrochemical Refiners and the Western States Petroleum Association over the 2011 target while it reconsiders.

At issue is EPA’s decision to mandate that 6.6 million gallons of cellulosic biofuel, or fuel made from plant-based materials such as agricultural residues, switchgrass and municipal solid waste, be blended into the nation’s motor fuel supply in 2011. EPA recorded zero gallons of the fuel actually produced that year.

Oil trade groups last year petitioned the agency to retroactively change the standard, saying they were being forced to pay penalties for not blending fuel that does not yet exist. EPA denied the petition, and the groups took the issue to court.

The agency said in the court filing yesterday that in reconsidering the decision to deny the petition, “it is unlikely that under reevaluation EPA would simply re-affirm the 2011 cellulosic biofuel standard without further analysis or explanation.”

It is more likely that EPA will zero out the standard, as it did with the 2012 target after the court decision. Such a decision would effectively end the lawsuits.

Several biofuels groups intervened in the lawsuit, and in a statement today they reaffirmed their support for the renewable fuel standard, despite the recent hiccups in the cellulosic program.

“The program has worked. Advanced biofuel companies across the United States have invested in technology development and construction of first-of-a-kind commercial scale refineries for cellulosic and other advanced biofuels,” the biofuels groups said. “EPA’s implementation of the court order does not impact the industry’s progress in developing technologies that reduce dependence on foreign oil and contribute to a cleaner environment.”

The industry, though, continues to hit stumbling blocks. ZeaChem Inc., a cellulosic ethanol company that has trumpeted its progress in the past several months, said it recently had to scale back its operations at its demonstration plant in Boardman, Ore. The company failed to secure a needed bridge loan, spokeswoman Carrie Atiyeh said.

“As a result of this unforeseen delay, we could not avoid scaling back our operations, which we intend to be a short-term event,” Atiyeh said. “We are having very productive conversations with investors and are quickly making progress in the right direction.”

ZeaChem last year received a $232.5 million loan guarantee from the Department of Agriculture toward the construction of the Boardman biorefinery. Last month, ZeaChem announced it had begun producing gallons of cellulosic ethanol at the 250,000-gallon-a-year plant.

Atiyeh stressed that the company does not intend to sell the plant.