Ethanol Mandate Triggers `Constant Litigation,’ USDA Chief Says

Source: By Mario Parker, Bloomberg News • Posted: Friday, February 19, 2016

The conflict between agriculture and petroleum interests over the government’s ethanol mandate shows no signs of abating, U.S. Department of Agriculture Secretary Tom Vilsack said.

Oil and biofuel industry advocates have filed lawsuits over renewable fuel-consumption targets issued by the Environmental Protection Agency in November. Last week, Valero Energy Corp., the largest U.S. petroleum refiner and the third-biggest ethanol producer, became the latest company to sue the EPA.

Debate over the 2007 mandate forcing refiners to use ethanol in gasoline has intensified amid a shale boom that has boosted U.S. crude-oil supplies to the highest in 86 years. President George W. Bush touted the biofuel as a way to reduce dependence on foreign sources of oil. Republican presidential candidate Ted Cruz, a senator from Texas, last month won the primary caucus in Iowa, the biggest producer of ethanol, while denouncing the mandate.

“You’re going to have constant litigation,” Vilsack said Thursday in a telephone interview.

Recent Lawsuits

The American Petroleum Institute, the American Fuel and Petrochemical Manufacturers and Americans for Clean Energy, a consortium of biofuel industry advocates, have sued the Obama administration in recent months.

In November, the EPA said refiners must use 14.5 billion gallons of corn-based ethanol this year. That’s below the 15 billion outlined in 2007 when Bush signed the so-called Renewable Fuels Standard. The target topped the 14 billion initially proposed in May.

The oil industry says that the targets call for more ethanol to be consumed than is safe to be used in engines, while biofuel proponents, such as the Renewable Fuels Association, say that the law was designed to increase the gasoline’s additive’s share of motor-fuel consumption.

Vilsack, a former Iowa governor, said it doesn’t help any party to have the dispute ultimately reach the Supreme Court following the death of justice Antonin Scalia and congressional threats to block a successor nominated by President Barack Obama.