Ethanol Industry Divided on EPA Ruling, Mulling Next Steps

Source: By Gary Truitt, Hoosier Ag Today • Posted: Thursday, December 3, 2015

Not everyone in the ethanol industry was happy with the EPA ruling released on Monday. Some groups are considering court action against the EPA.The initial reaction by many in the agriculture and ethanol sectors to Monday’s  announcement by the EPA, that it would increase slightly the level of ethanol that can be blended into the nation’s fuel supply, was mildly enthusiastic.  But the fact that the levels are still short of what Congress intended in the Renewable Fuels Standard makes the ruling meaningless, said  Bob Dinneen, with the Renewable Fuels Association. He said the EPA still left the oil companies in charge of how much ethanol to use, “They still reduced the numbers from the statutory levels and embraced the notion of the blend wall … they are effectively turning the nation’s renewable energy program over to the oil companies.”

American Coalition for Ethanol (ACE) Executive Vice President Brian Jennings says the final rule protects the oil industry from meeting the requirements that Congress intended. “When Congress enacted the Renewable Fuel Standard, it voted to side with those of us who said ‘yes we can’ reduce greenhouse gas emissions from motor fuel, ‘yes we can’ allow consumer access to E15 and flex fuels, and ‘yes we can’ spark innovative ways to produce cleaner fuels,” said Jennings. “While we appreciate that the Administration made incremental improvements compared to the proposed RFS rule, unfortunately, today they are choosing to side with those who say ‘no, we can’t’. Regrettably, EPA’s final RFS rule protects the old way of doing business by obstructing consumer access to cleaner fuels, stifling competition in the marketplace, and undermining innovation.”

Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw says the final rule is a blow to farmers and fuel choice for consumers. “Given EPA’s stated rationale for these numbers, one of the most successful energy policies in our nation’s history has been put squarely in the stranglehold of the petroleum industry,” said Shaw. “As a result, consumers will see higher prices at the pump, and Iowa farmers will likely continue to see commodity prices below the cost of production.” Nebraska Ethanol Board administrator Todd Sneller, who is also chairman of the Clean Fuels Development Coalition, called the final rule “disappointing, but not unexpected” and said it means biofuels must move beyond government imposed limits and establish new value based on performance and environmental benefits.

Tom Buis, with Growth Energy, downplayed the possibility of a lawsuit against the EPA, but Dinneen says legal action is likely. “What EPA has done here is a dramatic departure from a program that was working,” he said. “I believe when we finish our review of the final rule that we will want to stand up for the program, stand up for consumers, stand up for carbon reduction, stand up for rural America , and put this program back where it belongs.”