EPA’s Legwork On Ethanol Mandate To Get Inspected

Source: By John Kennedy, Law 360 • Posted: Monday, October 19, 2015

Law360, New York (October 16, 2015, 7:18 PM ET) — The U.S. Environmental Protection Agency’s internal watchdog said Thursday that it is launching a project to determine if the agency considered legally mandated studies and complied with reporting requirements while putting its Renewable Fuel Standard program into effect.

The EPA’s Office of Inspector General will soon begin preliminary research on the RFS, also known as the ethanol mandate, with the goal of ensuring that public health and the environment are protected, the OIG said in a letter to the agency.

The OIG will specifically evaluate whether the EPA had updated its support of the RFS with findings from the legally mandated National Academy of Sciences 2011 study on biofuels, the EPA’s own 2011 report to Congress on the environmental impacts of biofuels, and any subsequent reports or relevant research regarding biofuels. The watchdog will also look into whether the EPA followed reporting requirements.

The controversial RFS has taken fire from legislators, industry groups and environmental activists alike.

Earlier this year, lawmakers in both houses of Congress introduced legislation that would eliminate the use of corn-based ethanol from the renewable fuels that refiners are required to blend into the U.S. fuel supply as part of the RFS program.

The first bill came from the House, when Reps. Bob Goodlatte, R-Va., Peter Welch, D-Vt., Steve Womack, R-Ark., and Jim Costa, D-Calif., rolled out the RFS Reform Act, or H.R. 704, in an attempt to reform the program. They said it would remove the last remaining consumer subsidy of the ethanol industry — the mandated blending of ethanol into gasoline.

The legislation also aimed to cap at 10 percent the amount of ethanol that can be blended into conventional gasoline.

The bill was referred to the House Energy and Commerce Committee’s Subcommittee on Energy and Power in February, but has not progressed.

Less than a month after H.R. 704 was introduced, a bipartisan trio of U.S. senators floated their own legislation that aimed to do approximately the same thing. The Corn Ethanol Mandate Elimination Act of 2015, or S.577, was co-sponsored by Sens. Pat Toomey, R-Pa., Jeff Flake, R-Ariz., and Dianne Feinstein, D-Calif.

The bill was Toomey and Feinstein’s second attempt at scrapping the ethanol requirement in as many months — they proffered an amendment to now-dead legislation approving construction of the Keystone XL pipeline in January.

S.577 has not been sent to any committee or subcommittee since it was introduced on Feb. 26.

Meanwhile, the petroleum industry wants the RFS scrapped, calling it a stealth tax on gasoline and saying that the Renewable Identification Number program is ripe for fraud. That program allows blenders and refiners to use RINs for trading renewable fuel credits to meet the EPA’s biofuel requirements.

In April, the EPA settled with the American Petroleum Institute and American Fuel and Petrochemical Manufacturers over delayed renewable fuel volume standards, agreeing it would announce some standards by June 1.

The industry groups had sued the EPA to force the establishment of renewable fuel volume standards for 2014 and 2015, saying the agency’s delay was hurting their members’ bottom lines.

Environmental groups have also taken issue with the RFS, including the Environmental Working Group, which has called corn ethanol worse for the environment than the Keystone XL pipeline.

–Additional reporting by Keith Goldberg, Kurt Orzeck and Juan Carlos Rodriguez. Editing by Edrienne Su.