Ethanol makers point to rail for price jump – Court hears challenge to 2013 RFS standards – OMB talks RIN quality assurance

Source: By ALEX GUILLÉN, Politico • Posted: Tuesday, April 8, 2014

ETHANOL MAKERS POINT AT RAIL FOR PRICE JUMP: The biofuels industry says a railroad bottleneck between the Midwestern producers of the corn-based fuel and distribution centers is causing just as big of a headache and driving up prices on the U.S. coasts despite an abundance of ethanol in the middle of the country. And that is contributing to an increase in gasoline prices at the pump, at least modestly, and undermining a benefit that renewable fuel makers have long touted: Ethanol is reducing drivers’ fuel costs. Talia Buford has the story:

D.C. APPEALS COURT HEARS CHALLENGE TO 2013 RFS STANDARDS: A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit will hear oral arguments this morning in a case challenging EPA’s final rule setting the 2013 renewable fuel standard volumes. Monroe Energy argues that the standards were arbitrary and capricious because they require “blending of more renewable fuel into transportation fuel than the economy can consume” and because EPA put out the standards nine months after the deadline. EPA said in a brief that the rule “represents a reasonable exercise of EPA’s broad discretion under the Act, when it reduces the applicable statutory volume of cellulosic biofuel for a given calendar year, to determine whether it should also reduce the statutory volumes of total renewable fuel and advanced biofuel.” Judges Judith Rogers, Thomas Griffith and Cornelia Pillard will hear a total of 40 minutes of arguments at 9:30 a.m.

But wait, there’s more: EPA convinced the court to sever issues related to its cellulosic biofuel standard, and wait to hear that case until the agency has reconsidered that particular standard.

OMB TALKS RIN QUALITY ASSURANCE: Officials from the Office of Management and Budget and other administration agencies had to meetings in late March to discuss a quality assurance program for Renewable Identification Numbers, according to newly posted records. OMB is reviewing an EPA rule setting up a program to help identify legitimate RINs, which have had some high-profile fraud issues.

Oil industry: Representatives from the American Petroleum Institute, American Fuel & Petrochemical Manufacturers, BP and ExxonMobil met March 24 with administration officials. According to a position document posted by OMB, the groups say they support a rule setting up “voluntary, 3rd party RIN verification program … that establishes affirmative defense to liability stemming from invalid RINs. The affirmative defense would provide legal certainty for obligated parties who purchase verified RINs, provided that the obligated parties did not have actual knowledge of the RINs’ invalidity at the time of purchase and did not otherwise cause the invalidity.” More:

Auditors: Administration officials also met the next day with representatives of Genscape, a third party auditor that could verify RINs. The company recommends letting auditors use remote monitoring technology instead of in-person visits, as well as having auditors “be completely independent of any day-to-day RIN transaction activity. Having a RIN position in the market could inappropriately bias the audit process based on market conditions.” More: