Ethanol industry doubtful of EPA’s ‘good news’ it’s increasing biofuel mandates

Source: By John Siciliano, Washington Examiner • Posted: Monday, December 3, 2018

The ethanol industry is raising doubts that Trump’s Environmental Protection Agency will make good on Friday’s announcement it will increase the amount of ethanol in the gasoline supply next year.

The EPA on Friday announced its new annual targets for the 2019 Renewable Fuel Standard. Under next year’s program, EPA expects oil refiners to blend 15 billion gallons of corn-based ethanol into the nation’s fuel supply.

Although the ethanol industry thanked EPA for keeping the standard at its maximum level for blending the alcohol fuel, the agency fell silent on whether it will continue issuing exemptions to oil refiners not to blend ethanol.

“We urge Acting Administrator Andrew Wheeler to faithfully and strictly enforce the 15-billion-gallon conventional renewable fuel requirement in 2019, rather than allowing the standard to be eroded through the use of clandestine small refiner waivers as former Administrator [Scott] Pruitt did,” said Geoff Cooper, president and CEO of the Renewable Fuels Association, representing the ethanol industry.

Friday’s announcement does not say it will be making up for the losses experienced last year in ethanol production, which the ethanol industry argues eroded demand and hurt corn farmers.

EPA under Pruitt issued nearly 50 “hardship” waivers to small refineries owned by giant oil firms like Chevron, leading to “demand destruction” for ethanol producers, said Cooper. The ethanol industry and corn farmers sued EPA over the oil industry exemptions, arguing that EPA’s actions were illegal.

Cooper asked EPA acting chief Wheeler to “exercise the restraint and thoughtfulness” that he said Pruitt lacked. President Trump has pledged to support the ethanol program as part of a promise he made to Iowa farmers.

Meanwhile, the oil industry was disappointed with EPA’s decision to keep the ethanol mandate at its maximum level, rather than follow their advice and cut it.

The American Petroleum Institute, representing the oil industry in Washington, warned that keeping the blending requirements at 15 billion gallons could harm vehicle engines, especially if more 15-percent ethanol fuel blends, or E15, are introduced in the market as a result.

“EPA’s latest biofuel mandate that increases ethanol volumes in our fuel supply should concern consumers,” said Frank Macchiarola, the oil group’s vice president for downstream operations. “About 75 percent of the vehicles on the road today were not built for E15 and consumers could potentially face costly repair bills,” he added.

The Renewable Fuel Standard raises the amount of ethanol and other renewable fuels required under law to be blended into the nation’s gasoline and diesel supplies each year. The amount of fuel required to be blended next year totals 19.9 billion gallons, with corn ethanol making up the lion’s share.

The fuel standard mandates that 32 billion gallons be blended in the fuel supply by 2022. Ethanol from corn is not allowed to exceed 15 billion gallons of that amount. The rest is slated to come from fuels derived from agricultural waste and other from non-food crops. But advanced biofuels have struggled to muster the supply needed to meet the end goal of the program.