EPA’s call for small ethanol increase angers producers

Source: By Christopher Doering, Des Moines Register • Posted: Thursday, May 19, 2016

WASHINGTON — The Obama administration on Wednesday proposed a modest increase in the amount of ethanol that must be blended into America’s gasoline supply next year, angering producers of the renewable fuel who wanted the White House to adopt the much more aggressive targets set by Congress.

The Environmental Protection Agency proposed that refiners blend an “ambitious yet achievable” 18.8 billion gallons of renewable fuels in 2017. That preliminary figure is a small increase from the 18.11 billion gallons mandated by the EPA for 2016, but well below the 24 billion gallon threshold established by Congress in 2007.

As much as 14.8 billion gallons of the EPA recommendation could come from corn-based ethanol, compared with 14.5 billion in 2016. Cellulosic ethanol made from grasses, wood chips, corn stalks and other inputs, would increase to 312 million gallons from 230 million.

Iowa produced more than 4 billion gallons of ethanol in 2015, more than any other state.

Janet McCabe, the acting assistant administrator for the EPA’s Office of Air and Radiation, said the White House is “committed to keeping the (ethanol mandate) on track (and) spurring continued growth in biofuel production and use.”

The Renewable Fuel Standard, a 2007 law requiring increasing amounts of alternative fuels to be blended into cars, trucks and other vehicles, has been widely popular in Iowa, where farmers, ethanol producers and rural economies are tied to the mandate. A Des Moines Register/Mediacom Iowa Poll released in March found 71 percent of Iowans favored the mandate.

Ethanol supporters were quick to criticize the EPA.

“Today’s proposal represents yet another missed opportunity for consumers, energy security and rural America,” said Monte Shaw, executive director for the Iowa Renewable Fuels Association.

He said the EPA’s proposal of ethanol from corn for 2017 “doesn’t match the current reality of the nation’s fuel sector.”

Shaw said low fuel prices have spurred consumers to drive more, and with a growing number of fueling stations offering fuel with more than 10 percent ethanol, the EPA should require 15 billion gallons of ethanol to be made from corn, as required by Congress, rather than 14.8 billion.

Sen. Chuck Grassley called the proposal a “positive step” but said he remains worried that the EPA “continues to rely too much on arguments from Big Oil.”

Sen. Joni Ernst warned that the blending requirements will discourage investment in next generation biofuels and ” hurt an already struggling agricultural economy in Iowa and across the nation.”

The EPA has said it has the legal authority to adjust the numbers to below what Congress intended. Among the reasons, the agency cited: Growth in cellulosic ethanol has been slower than expected, gasoline consumption has not kept pace with forecasts, and higher ethanol blends such as E15 and E85 have not been widely accepted.

Most gasoline currently is E10 — 10 percent ethanol and 90 percent gasoline.

The American Petroleum Institute, a trade group representing oil and natural gas companies, said the RFS is broken and outdated. Frank Macchiarola, API’s downstream group director, said the EPA is pushing higher ethanol blends that consumers “don’t want” and that are not compatible with most cars on the road.

“EPA’s proposal makes abundantly clear that the only solution is for Congress to repeal or significantly reform the RFS,” Macchiarola said. “Members on both sides of the aisle agree this program is a failure, and we are stepping up our call for Congress to act.”

The Environmental Working Group joined the oil industry in criticizing the plan. It said requiring more ethanol to come from corn would make air pollution worse and siphon grain away from needed food.

“The administration’s decision continues a wrong-headed policy that promotes a fuel that is bad for the environment, rather than pushing the market toward better renewable fuel options,” said Emily Cassidy, a research analyst with the environmental group.

Contact Christopher Doering at cdoering@usatoday.com or reach him at Twitter: @cdoering