Ethanol producers urge EPA to reject oil industry request to lower mandate

Source: Amanda Peterka, E&E reporter • Posted: Friday, August 30, 2013

Ethanol producers are urging U.S. EPA to reject calls by oil industry trade groups to lower next year’s biofuels mandate.

Earlier this month, the American Petroleum Institute and American Fuel & Petrochemical Manufacturers formally requested that EPA lower its renewable fuels targets next year to below 10 percent of the nation’s total gasoline supply. In a letter yesterday to EPA Administrator Gina McCarthy, the Renewable Fuels Association said the waiver request was an attempt by the oil industry to retain its share in the fuels market.

The Renewable Fuels Association further says that API and AFPM are not entitled to file a waiver request under the statute because they are trade associations that are not themselves subject to the renewable fuel standard’s annual requirements.

“The petition from API and AFPM should be seen for what it truly is — a desperate attempt to protect market share and block increased volumes of cleaner and more sustainable renewable fuels from entering the marketplace,” Renewable Fuels Association President and CEO Bob Dinneen wrote.

On Aug. 13, the oil trade groups said lowering next year’s biofuel mandate to 9.7 percent of the gasoline market would provide short-term relief for refiners faced with increased costs under EPA’s credit trading program for ethanol. Although EPA has already said it would likely lower next year’s targets, the oil groups said they wanted to hasten the agency’s decision and provide “a reasonable number” for the agency to consider (E&ENews PM, Aug. 13).

By statute, refiners next year are required to blend 14.4 billion gallons of conventional ethanol, or just shy of 11 percent of the projected 132 billion gallons of gasoline demand, into petroleum-based fuel. Overall, the renewable fuel standard calls for 16.55 billion gallons of ethanol and advanced biofuels next year but gives EPA the authority to adjust the numbers.

In its letter yesterday, the Renewable Fuels Association said refiners should be able to meet their requirements next year through increased sales of higher ethanol blends at gas stations, carryover fuel credits from this year and EPA’s likely adjustments to the targets. The conditions, he said, do not meet EPA’s “severe” economic harm standard for granting the waiver.

“EPA should act swiftly to reject the petition submitted by API and AFPM,” Dinneen said. “The conditions outlined in the Clean Air Act under which EPA may grant a waiver simply do not exist.”