Oil and gas industry challenges EPA’s cellulosic standards

Source: Amanda Peterka • E&E  • Posted: Tuesday, March 13, 2012

The American Petroleum Institute is challenging U.S. EPA’s 2012 cellulosic biofuel requirements, calling them “unrealistic” given delays in commercializing the fuel.

In a petition filed Friday, the oil and gas trade group asked the U.S. Court of Appeals for the District of Columbia Circuit to review EPA’s final rule that set the requirements. The rule issued in December requires producers to generate 8.65 million gallons of cellulosic biofuel this year or purchase renewable fuel credits to meet the obligation.

“EPA’s standard is divorced from reality and forces refiners to purchase credits for cellulosic fuels that do not exist,” said Bob Greco, API’s director of downstream and industry operations, in a statement. “EPA’s unrealistic mandate is effectivelanufacturers of gasoline that could ultimately burden consumers.”y a tax on m

The oil and gas group said it recommends that EPA set the next year’s volume requirement on at least two months of actual cellulosic biofuel production in the current year.

EPA bases its annual biofuels requirements on predictions from the federal Energy Information Administration (EIA) and industry production assumptions

Although several cellulosic biofuel plants are in the works, the United States has yet to commercialize the fuel. In an early version of its 2012 Annual Energy Outlook, EIA said it’s grown “somewhat more pessimistic” about cellulosic biofuel.

Earlier this year, the American Petroleum Institute, National Petrochemical & Refiners Association and Western States Petroleum Association filed a joint petition asking EPA to waive its cellulosic requirements from 2011 after producers fell short of that year’s 6.6-million-gallon target.

Biofuels trade groups urged EPA to reject that petition, saying it would create instability in the fledgling market (Greenwire, Feb. 17).

Brent Erickson, executive vice president of the Biotechnology Industry Organization, slammed the new legal action.

“In what has become an annual tradition, those oil company incumbents at API who are not exploring biofuels are again trying to create regulatory barriers to prevent competitors from bringing new fuels to the marketplace and are trying to foil the very energy independence they publicly profess to support,” Erickson said in an emailed statement.

EPA said today it “will review and respond to the suit appropriately.”