Oil industry petitions EPA for revised 2013 renewable fuel targets

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, October 16, 2013

The oil industry is asking U.S. EPA to reconsider this year’s renewable fuel targets on concerns that the agency relied on the wrong data and overshot its estimate of the amount of cellulosic biofuel that will be produced.

The American Petroleum Institute warns in a petition filed late Friday that the targets will pose problems for refiners that must abide by the renewable fuel standard’s requirements.

EPA set final 2013 numbers in August that raise concerns that “the agency is acting in a manner that total[ly] disregards obligated parties’ need for regulatory certainty and only complicates compliance,” Bob Greco, API’s director of downstream activities, wrote in the group’s petition.

Under EPA’s final targets, refiners this year are required to blend 16.55 billion gallons of renewable fuel into petroleum-based gasoline and diesel. Of that, 2.75 billion ethanol-equivalent gallons must come from advanced sources, or those that do not use cornstarch as an input.

As part of the advanced requirement, refiners must blend 1.28 billion gallons of biodiesel made from soybean oil, animal fat or vegetable grease, and 6 million gallons of cellulosic biofuel, a fuel made from plant-based materials like agricultural residue and perennial grasses (Greenwire, Aug. 6).

The Clean Air Act requires the agency to set renewable fuel targets based on Energy Information Administration fuel data from the previous October. EPA, though, used an updated data set from this year that made the final required percentage of renewable fuel use differ from what was proposed in February.

Stakeholders had no chance to comment on the updated data, which created uncertainty among refiners, API argues.

“EPA acted outside its scope of authority in establishing RFS requirements that were based on information made available so late,” API said in the petition.

The oil group also argues that EPA’s cellulosic target for this year is too high. The agency expects that KiOR Inc., a company producing cellulosic biofuel in Mississippi, will produce the bulk of the 6 million ethanol-equivalent gallons of cellulosic biofuel required for the year, but KiOR’s production has so far fallen short of its expectations (E&ENews PM, Aug. 21).

API says that throughout the 2013 rulemaking, EPA relied on outdated company statements that didn’t show actual progress at the facility.

“EPA needs to use a more accurate methodology such as basing the volume on actual cellulosic production, rather than using selectively chosen, optimistic projections from companies when history shows [they] are consistently wrong,” the group said.

In a lawsuit filed last week, API asked that the U.S. District Court for the District of Columbia also review the agency’s 2013 targets (E&ENews PM, Oct. 8).

Ethanol groups have praised EPA’s targets for this year as being in tune with the marketplace.