Ethanol backers, bashers jam EPA’s mailbox with comments on RFS rollback

Source: Amanda Peterka, E&E reporter • Posted: Thursday, January 30, 2014

U.S. EPA yesterday closed its public comment period on a controversial proposal to lower this year’s ethanol and advanced biofuel mandates.

According to the federal docket, EPA received 16,575 comments as of 11:59 p.m. yesterday, when the comment period on the proposal ended.

EPA’s proposal calls for a 16 percent cut in ethanol and advanced biofuel usage this year compared with the level set out in the 2007 Energy Independence and Security Act. The agency would mandate 13 billion gallons of conventional ethanol — 1.4 billion gallons below what the act requires — and 2 billion gallons of advanced biofuels made from feedstocks other than corn starch, a reduction of 1.75 billion gallons from the act’s goal.

This is the first time since the nation had a renewable fuel standard in place that EPA has proposed to slice the mandates. In proposing the lower figures, the agency cited concerns with the limit to the amount of ethanol that can be used in today’s fueling infrastructure and cars, as well as low confidence that the nation can produce a substantial amount of next-generation biofuels this year.

“This proposal seeks to put the RFS program on a steady path forward — ensuring continued growth of renewable fuels while recognizing the practical limits on ethanol blending,” EPA said when it released the proposal in November.

A broad array of organizations and individuals commented on the proposed rule during the 60-day comment period, reflecting the wide swath of the economy affected by the renewable fuel standard. EPA received responses from biofuel producers, the oil industry, farmers and ranchers, environmentalists, livestock producers, food manufacturers, restaurant owners, and small-engine makers, among others. Several lawmakers, both at the local level and in Congress, also responded.

Comments ran the gamut, from the unintelligible single sentence to lengthy documents laying out legal arguments against EPA’s proposal. Ethanol trade group Renewable Fuels Association submitted a 180-page document, while Growth Energy’s comments ran more than 300 pages.

Ethanol producers’ main argument is that EPA overstepped its statutory authority in proposing to lower the overall amount of renewable fuel that must be blended into petroleum-based gasoline and diesel this year.

“There is absolutely no basis — legal or economic — for EPA’s proposed waiver,” said Tom Buis, president of Growth Energy, which advocates on behalf of ethanol producers.

Advanced biofuel producers focused their comments on the effects of the proposal on investment in next-generation fuels that do not use corn starch as an input. The proposal disproportionately affects advanced biofuels and fails to maximize the energy security and greenhouse gas benefits as intended by the Energy Independence and Security Act, the Advanced Biofuels Association said in its comments.

“As a matter of policy, EPA should set RFS standards that encourage production and consumption of all available advanced biofuels,” the association said in a blog post summarizing its comments. “Setting a target below current production is highly destructive to the industry, and an arbitrary and capricious application of its statutory authority.”

During a meeting yesterday with EPA staff, supporters of the renewable fuel standard and critics of the proposal also delivered a petition with more than 110,000 signatures calling on EPA Administrator Gina McCarthy to protect the renewable fuel standard., a progressive veterans group, and Rep. Bruce Braley of Iowa, a Democrat in the nation’s largest ethanol-producing state, led the effort. More than 35,000 of the signatures were from veterans and military family members, while about 1,000 were from Iowans.

Critics of the renewable fuel standard as a policy, on the other hand, said in their comments that the action by EPA was a step in the right direction. But they repeated calls that Congress must step in to “fix” the mandate permanently.

“The EPA’s decision to modestly reduce the levels of corn ethanol marks a historic shift in the food versus fuel debate, and is the first, public sign from the government that its artificial quotas, mandated by the RFS, are unrealistic and arbitrary,” National Council of Chain Restaurants Executive Director Rob Green said. “Although the proposal is a small first step in the right direction, it is really up to Congress to address the unworkable and unfair RFS.”

Oil industry trade groups, which have said the RFS hurts refiners because of compliance costs, also commended the agency for lowering the targets in a 65-page comment.

“EPA’s exercise of these waiver authorities is consistent with the plain language of the law and is entirely reasonable,” the American Petroleum Institute and American Fuel & Petrochemical Manufacturers wrote in the joint comment.

The oil trade groups, though, said they found “shortcomings” with the analysis EPA used to reach the targets. They recommended that the agency lower both its conventional ethanol target and its cellulosic biofuel standard — a subset of advanced fuels that has consistently overestimated the amount of fuel in the market — to reflect the most recent three months of production data.

API and AFPM also are taking EPA to task over its delay in setting the renewable fuel targets for this year. By statute, the agency was required to finalize the targets by Nov. 30 of last year.

“EPA can’t wait to set the requirements for the year when the year is halfway over,” said Patrick Kelly, senior fuels policy adviser at API.

EPA will now have the unenviable task of sorting through all the feedback to shape a final rule setting the targets for this year. Bob Dinneen, president and CEO of the Renewable Fuels Association, last week predicted it would take the agency months to reach a final decision given the response from stakeholders.

In a statement, EPA said it expected to finish the rule by summer.

“We appreciate this level of engagement and additional information from stakeholders as the Agency works in consultation with the Departments of Agriculture and Energy toward the development of a final rule which we expect to issue by the summer of 2014,” EPA said in the statement.