Oil Sector Splits Over EPA Plan To Approve Sorghum As Low-Carbon Fuel

Source: By John Siciliano, Inside EPA • Posted: Thursday, February 19, 2015

Major oil industry groups are split over EPA’s greenhouse gas (GHG) lifecycle emissions analysis for designating “biomass sorghum” as a low-carbon cellulosic biofuel feedstock under the renewable fuel standard (RFS), suggesting they will also split should the agency approve the feedstock for use under the RFS.

In recent comments on the agency’s analysis, the American Petroleum Institute (API) together with the American Fuels and Petrochemical Manufacturers (AFPM), charged there is no scientific data to support the agency’s conclusions that the feedstock qualifies as a “cellulosic biofuel” under the RFS because it produces 60 percent less GHG lifecycle emissions when compared to conventional gasoline and diesel fuel.

In their Jan. 30 comments, the groups say they are “deeply concerned” that EPA is following a “general methodology,” rather than a “scientific analysis,” by concluding that sorghum meets the GHG emissions threshold to be considered a low-carbon fuel.

But a division of oil major Shell — which is a member of API — says in individual comments that it supports EPA’s methodology, which takes into account a similar conclusion that EPA made earlier in approving “switchgrass” as an acceptable feedstock for cellulosic biofuels under the RFS.

“We support the methods of analyses and the conclusions drawn. The comparison with switchgrass is both reasonable and consistent with prior rulings. We concur with the conclusion that the [GHG] emissions analysis is cautious, but not unduly so,” said John Reese, Shell Oil Product’s downstream manager, in Jan. 30 comments.

It is not clear why Shell is breaking with the rest of the industry over cellulosic fuels, but the company has been a proponent of advanced biofuels in recent years.

The proposed EPA analysis, once approved, would be used to designate sorghum as a pathway for producing cellulosic biofuels through a separate rulemaking. The separate pathway designation would allow biofuels produced from sorghum to qualify for credits under the RFS that are used by refiners to comply with the program.

The agency said in its proposed analysis that the production of sorghum would produce roughly the same GHG emissions as switchgrass, which is an available feedstock for the cellulosic RFS requirements.

The GHG review comes in response to a petition from National Sorghum Producers asking the agency to evaluate whether sorghum qualifies as a “cellulosic” fuel under the RFS.

And while EPA is taking comment on the GHG review, and has not yet issued a response to industry’s petition regarding the fuel, the agency says it “anticipates that fuel produced from biomass sorghum feedstock through the same biochemical or thermochemical process technologies” as switchgrass would qualify to help meet the cellulosic blend requirements.

Cellulosic Targets

Under the RFS, EPA sets annual fuel production targets for various renewable fuels that emit fewer GHGs than conventional gasoline. Cellulosic and advanced biofuels have the lowest carbon footprint of the fuels required to comply, with cellulosic generally having to emit 60 percent fewer GHGs than petroleum.

But EPA’s targets drive fights between refiners and other obligated parties that must meet the rules’ blend targets and biofuels advocates who seek larger targets in part to drive demand.

Refiners, who say EPA should set achievable targets, have been especially concerned because EPA has in the past set targets for cellulosic fuels that are significantly higher than what has been produced, forcing refiners to purchase compliance credits — known as renewable identification numbers (RINs) — to offset the lack of production. Because cellulosic biofuels are considered the most valuable among the various fuel categories, with the highest dollar value per gallon, they are also the most costly for refiners to purchase.

While biofuel producers have not met EPA production targets in the past, recent agency data shows a sizable increase in the volume of cellulosic and other low-carbon biofuels being produced, making it more likely that the agency will decide to increase the RFS blending requirements for those fuels to their highest levels since the program began when it issues new targets later this year.

Despite the increase in cellulosic production, oil industry groups continue to criticize EPA’s GHG analysis for new feedstocks, as well as other aspects of the program.

API and AFPM recommend, for example, that the agency scrap its initial analysis and “perform” a more “rigorous modeling analysis” of sorghum together with a variety of other new RFS feedstock pathways that EPA has approved for credit under the cellulosic fuel category in order to “fully quantify the lifecycle GHG impact, including addressing uncertainty.”

API and AFPM both continue their campaign to oppose the RFS program based, in part, on the program’s requirements for blending low-carbon cellulosic biofuels. They argue that the “phantom fuels” have not been produced at adequate levels to meet the RFS’ statutory goals, requiring refiners to buy expensive compliance credits from EPA to comply with annual blending targets.

API/AFPM, however, say “EPA’s methodology assumes that the GHG emissions generated from the agricultural production and use of biomass sorghum are the same as those associated with the production and use of switchgrass, which the Agency has already modeled and approved as a pathway for cellulosic biofuel.”

API further refutes the sorghum proposal, saying “there are no data to support EPA’s claim ‘. . . that on a per dry ton of feedstock basis GHG emissions associated with biomass sorghum production and use are the same as those associated with the production and use of switchgrass for biofuel production.’”

The trade groups argue that EPA’s “simplified approach” ignores variability in production while relying on “overly optimistic assumptions” that potentially overlook “unintended consequences associated with each new pathway under review.”

“We are deeply concerned that the Agency continues to follow a general methodology vs. a scientific analysis specific to biomass sorghum,” the joint comments read. “To avoid an arbitrary outcome, we strongly recommend that EPA instead perform a rigorous modeling analysis of each new pathway, including biomass sorghum, to fully quantify the lifecycle GHG impact, including addressing uncertainty.”

But Shell welcomes the agency’s analysis and its comparison of sorghum to other, already approved fuels. “We consider the comparison with energy cane to be appropriate. We note the consistent application of the 75% lignocellulose rule, which although not required for the lifecycle carbon intensity calculation, defines under the current rules the lower limits of cellulosic content required to enable 100% cellulosic RINs,” which can be bought and traded for refiners to show compliance.