Oil execs call on White House to stick to plans to roll back RFS

Source: By Amanda Peterka, E&E reporter • Posted: Wednesday, October 15, 2014

Executives from nearly three dozen oil companies today called on President Obama to hold firm on a proposed rule that would roll back the nation’s biofuel blending targets.

U.S. EPA last November proposed a 16 percent decrease in the mandate for total renewable fuel — which includes both conventional ethanol and advanced biofuels — compared with the level Congress anticipated when it passed the 2007 renewable fuel standard that became law.

In a letter today, the 31 refining executives called the proposal a “reasonable” approach that would avert the blend wall, the term used to describe the technical limit to the amount of ethanol that can be used in gasoline.

The letter comes as multiple administration officials, including U.S. EPA Administrator Gina McCarthy, have signaled that the final rule setting this year’s targets would include higher targets for both ethanol and advanced biofuels.

“EPA’s proposal is doing the right thing for the short-term. Now is not the time to backtrack on a proposal to avoid economic disruption,” wrote the refiners. “Doing so could send a signal to the market that EPA is willing to put the fuel supply past the blend wall, which could adversely impact consumers in the form of higher costs.”

The trade group American Fuel & Petrochemical Manufacturers organized the letter. Northern Tier Energy GP LLC President and CEO David Lamp and Tesoro Corp. President and CEO Gregory Goff — who both hold leadership positions within AFPM — led the signatories.

Other companies signing on include Delta Air Lines Inc. subsidiary Monroe Energy LLC, Total Petrochemicals and Refining Inc., PBF Energy Inc., Marathon Petroleum Corp., BP Products North America, ExxonMobil Refining and Supply, and Chevron Corp.

EPA’s proposal would set this year’s ethanol mandate at 13.01 billion gallons and the mandate for advanced biofuels at 2.2 billion gallons. By statute, the agency was supposed to finalize the targets by Nov. 30 of last year; a final version of the rule is currently sitting at the White House in interagency review, but the administration may hold off on releasing it until after the midterm elections.

Ethanol producers say that the blend wall, which is currently at 10 percent ethanol, is a concept created by the oil industry and that the market could handle more renewable fuel with improvements in infrastructure.