Ethanol group says ‘blend wall’ is no excuse for lowering RFS targets

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, October 16, 2013

An ethanol group today urged U.S. EPA to reject oil industry calls to lower next year’s renewable fuel targets, after a draft proposal surfaced last week showing that the agency is considering a steep drop for both conventional ethanol and advanced biofuels.

American Coalition for Ethanol Executive Director Brian Jennings said the proposal would represent no more than a win for oil companies that have not made needed investments in infrastructure that can handle higher blends of ethanol. Caving in to the oil industry’s demands would set a “dangerous precedent,” he warned EPA Administrator Gina McCarthy in a letter.

The proposal “rewards oil companies for doing nothing to comply with the inevitability of higher ethanol blends,” Jennings wrote, “and would take the teeth out of the most consequential policy Congress has enacted to improve the way we produce and use transportation fuel.”

Under the draft proposal that emerged last week, the agency would require that refiners blend 15.21 billion gallons of renewable fuel into petroleum-based gasoline and diesel, well below the 18.15 billion required by the 2007 Energy Independence and Security Act (Greenwire, Oct. 9).

If approved, the proposal would represent an official recognition by the agency of the blend wall, the term used by critics in the oil industry to refer to the 10 percent level of saturation that has been the technically feasible limit to the amount of ethanol that can be blended in today’s infrastructure.

Over the past several months, the oil industry has warned that the renewable fuel standard would require it to breach the wall, and has called on EPA to lower its targets. Oil industry groups this year have also launched a full-scale attack on the standard that largely centers on concerns over the blend wall.

But biofuels supporters say the wall is an artificial construct created by the oil industry’s refusal to invest in infrastructure that can handle higher blends of ethanol. EPA allows gasoline with up to 15 percent ethanol to be used in passenger vehicles from model years 2001 and newer.

Jennings, whose group has nearly 600 members in the biofuels sector, told McCarthy today that the blend wall should not trigger the agency’s waiver authority next year under the RFS.

“The oil industry is dragging their feet to allow consumer access to blends above 10 percent ethanol and creating a subterfuge designed to question the administration’s continued commitment to alternatives to petroleum,” Jennings said.

He slammed the oil industry’s lobbying against the renewable fuel standard, both at the time the standard was written into law and in the current Congress.

“Their state of denial about higher ethanol blends was the reason that the waiver language was one of the final outstanding provisions that oil companies tried to weaken as finishing touches were put on the RFS by Congress,” Jennings said. “They wanted the opportunity for their cuff-linked attorneys to wordsmith and dodge their way out of compliance.”

Other biofuel groups have expressed doubts about the legality of the agency’s using its general waiver authority to respond to the blend wall (Greenwire, Oct. 11).

According to the 2007 Energy Independence and Security Act, EPA has the authority to lower its renewable fuel targets for the next year if they represent a serious economic hardship to a state or region, or if there is an inadequate supply of biofuel available for refiners to meet the requirements.

Under the draft EPA proposal, the agency would use its authority grant a general waiver of the standard’s overall renewable fuel requirements next year based on an “inadequate domestic supply.”

EPA has publicly been quiet about its plans for next year. It’s unclear whether the draft that emerged last week is the same as the proposed rule that the agency sent to the Office of Management and Budget in late August. The White House office is still reviewing the rule.

In response to the circulating draft proposal, McCarthy said in a statement Friday that the agency has not yet made a “final decision” about next year’s targets (E&ENews PM, Oct. 11).