No wiggle room allowed on Congressional mandates

Source: By The Prairie Star • Posted: Wednesday, August 9, 2017

The ethanol industry received a major victory on July 28, while at the same time the Environmental Protection Agency was told it erred in how it interpreted the “inadequate domestic supply waiver provision.” That was the result of the ruling by the D.C. Circuit Court of Appeals.

In Americans for Clean Energy et al v. Environmental Protection Agency, the Court vacated EPA’s decision to reduce the total renewable fuel volume requirement in 2016 and remanded the rule to EPA for further consideration.

The alternative fuels and ethanol industry, along with the National Corn Growers Association (NCGA) had argued that under President Obama’s administration the EPA misinterpreted its authority under the national renewable fuels mandate. As a result, it reduced the 2014 to 2016 total Renewable Volume Obligations (RVO) under the Renewable Fuel Standard (RFS).

The “inadequate domestic supply waiver provision” allowed the EPA to reduce the Congressional mandated target for ethanol production if the supply of corn in the U.S. was becoming critically short. However, the ethanol industry and various corn grower groups argued the corn supply in the U.S. during that three-year period was more than adequate, with one source estimating the corn industry lost more than 800 million bushels of potential corn grind due to the flawed methodology the EPA used.

In a statement after the court ruling, NCGA said, “We appreciate the Court honoring Congress’ intent. Congress created the Renewable Fuel Standard to help increase American energy independence and provide cleaner fuel choices for consumers by opening a closed fuel market and forcing the oil industry to allow competition in. Whether there is an adequate supply of renewable fuel to meet volume standards is not the same as how much fuel is used. Or, in the Court’s own words, ‘The fact that a person is on a diet does not mean there is an inadequate supply of food in the refrigerator.’

“We agree with the Court that effectively adding words to the law through this interpretation simply exceeds EPA’s authority,” the NCGA statement concluded.

The EPA has claimed the reason they lowered the renewable fuel requirements was due to there not being enough biofuel refueling facilities or pumps at gasoline stations. But the court ruling stipulates the EPA can waive the annual blending requirements for ethanol and other biofuels only due to a lack of supply.

We have seen the RFS in the news multiple times over the last few years, with the EPA ruling on the amount of fuel allowed under the RFS often lower than the Congressional mandate and sometimes over a year late in being announced.

It was time for the court system to remind the EPA that a Congressional mandate is the ‘law-of-the-land’ and needs to be followed to the letter and not by the whim of some appointed bureaucrats in a Washington, D.C. office building.

The EPA under President Trump will now have to recalculate the 2016 annual RFS requirements, which had already been implemented. Everyone will be interested in seeing how the new figures will impact the biofuels and oil industry, but hopefully they will follow the wishes of Congress this time.