Iowa officials applaud EPA decision on biofuels blending

Source: By Des Moines Register • Posted: Monday, November 27, 2017

The Iowa ethanol industry received welcome news when the Environmental Protection Agency denied requests from refiners to change Renewable Fuel Standard rules on who is responsible blending ethanol with gasoline.

Valero and other refiners petitioned EPA in 2016 to move blending responsibility to fuel retailers.

The biofuels industry opposed the change, saying it would result in a decrease in the production, distribution and use of renewable fuels.

“This is the right policy conclusion and I’m glad to see it happening,” U.S. Sen. Chuck Grassley said in a statement. “This decision puts the issue to bed, and certainty is so important.”

In its decision released Wednesday, EPA concluded that refiners did not show that shifting the responsibility for blending to retailers would improve the effectiveness of the program.

“EPA believes that a change in the point of obligation would unnecessarily increase the complexity of the program and undermine the success of the RFS program …” the notice of denial reads.

Grassley was a vocal opponent of changes to the so called “point of obligation” rules sought by refineries.

“Keeping the point of obligation where it is now, with refiners and importers, has worked and makes sense,” he said. “Moving the point of obligation from a handful of refiners to hundreds or thousands of small fuel retailers would undermine the integrity and viability of this successful program.”

Brenna Smith, press secretary for the Iowa Governor’s Office, said keeping the responsibility for blending with refiners “ensures stability in the biofuels market.”

“Governor (Kim) Reynolds expressed that to (EPA) Administrator (Scott) Pruitt on multiple occasions, and he genuinely listened to her concerns,” she said.

Leaders from Iowa’s biofuels industry applauded the decision.

“We commend the EPA for maintaining the stability of the RFS by officially rejecting any change to the point of obligation,” Monte Shaw, executive director of the Iowa Renewable Fuels Association, said in a statement. “Changing the RFS point of obligation would have only served to reward those who haven’t lifted a finger to help the implementation of the RFS and to punish those who have worked hard to make it the most successful energy policy in U.S. history.”

The EPA decision is a positive sign for the biofuels industry, but it is only one piece of the puzzle.

The agency is expected to announce a decision on volume requirements — the amount of biofuels that must be blended with the nation’s fuel supply — by the end of the month.

In July, EPA proposed volume requirements for cellulosic biofuel, advanced biofuel and total renewable fuel that are lower than 2017 requirements.

Grassley, Sen. Joni Ernst and 36 other senators sent a letter EPA in October arguing the 2018 volume rule “would represent a step back when it comes to advanced biofuels, resulting in less renewable fuels being blended than in 2017.”

“The rule unjustifiably flatlines biomass-based diesel, reduces advanced biofuels, and reduces the cellulosic biofuel blending target by about 25 percent,” the senators wrote. “The agency arrives at these lower targets by utilizing a new methodology more reliant on historical data than projected volumes.”