Op-Ed: Stay the Course with the RFS

Source: By Ernie Shea 25x25 • Posted: Friday, October 20, 2017

There is little doubt as to the message sent to – and received by – EPA Administrator Scott Pruitt and, by extension, President Trump, from a wide range of biofuel advocates from both sides of the aisle in Congress, as well as rural advocates from around the country: Fulfill your obligations under the Renewable Fuel Standard (RFS).

In comments submitted to the EPA this week, 25x’25 provided its own defense of the RFS while urging the EPA to abandon its efforts to further reduce the total renewable fuel volume requirement for 2018 and reduce the biomass-based diesel volume requirement for 2019.

Biofuel advocates on Capitol Hill, in statehouses around the country and in small-town America say the proposed reductions represent a serious violation of the vow made by Trump during his campaign, and a number of times after his inauguration, of his full support for the RFS. It is a promise that most political analysts say helped him win the Iowa caucuses, and helped fire up support among rural voters throughout the country, earning Trump the White House.

EPA issued a proposal in July that set a blending level for advanced biofuels (those that generate at least 50 percent fewer carbon emissions than their petroleum-based equivalents) at 4.24 billion gallons, with 2.1 billion gallons allocated to biodiesel. When the advanced biofuel volume was proposed for 2018, many advocates were disappointed that it was less than the 4.28 billion gallons that were mandated for 2017. And that total proposed for next year also included a cellulosic target of 238 million gallons, down from this year’s 311 million gallons.

Those July blending proposals were already drawing heat from biofuel proponents, but then last month the agency issued a Notice of Data Availability (NODA) that indicated even greater cuts. Citing concerns over biofuel imports, EPA’s NODA proposed a drop in advanced biofuels next year to 3.77 billion gallons. That reduction includes a decrease in the earlier proposed biomass-based diesel volume for 2018 by as much as 315 million gallons. These cuts could lead to reductions in the total 2018 renewable fuel volume requirement from the 19.24 billion gallons proposed earlier this year to 18.77 billion gallons.

On Monday, a bipartisan group of 32 senators, led by Sens. Chuck Grassley (R-IA), Heidi Heitkamp (D-ND), Roy Blunt (R-MO) and Patty Murray (D-WA) sent a letter to Pruitt, urging him to increase EPA’s proposed RFS blending levels for biodiesel (under law, biodiesel levels are set in the year ahead of the other Renewable Volume Obligations, or RVOs) to “encourage growth in the industry and diversity in the nation’s energy supply, and to abandon [EPA’s] effort to reduce biofuel production in 2018.”

The letter to Pruitt went out on the same day as a letter to Trump from four Republican governors of Midwestern states, who reminded the president of his “passionate support” of the RFS and his “explicit promises to our farmers that you would support investments in fuels like biodiesel and ethanol through the RFS.” Govs. Kim Reynolds of Iowa, Dennis Daugaard of South Dakota, Eric Greitens of Missouri and Sam Brownback of Kansas say EPA’s RFS proposals “threaten the livelihood of tens of thousands of American farmers and workers.”

EPA’s justification for restraining RVOs runs contrary to the biofuels industry’s demonstrated capability to produce even greater volumes than anticipated the year before. While cellulosic ethanol continues to be produced at a fraction of what Congress anticipated when it reauthorized and strengthened the RFS in 2007, the advanced biofuel made from prairie grasses, corn plant residues and other nonfood sources continues to grow at a steady clip. And to cut biodiesel levels already set for 2018 and leave them stagnant in 2019 makes little sense when the industry can clearly generate 2.75 billion gallons.

EPA cites importation issues as driving the proposed biodiesel reductions. Departing significantly from what the agency has done in the past, EPA claims it should focus on domestic production and set the RFS volume without considering what is imported into the United States. However, these imported volumes, while not counted when setting the RFS biodiesel level, will still be part of the RFS program because they will generate Renewable Identification Numbers (RINs) credits used to certify compliance with the program. Given that foreign subsidies often make these imports cheaper than U.S.-produced biodiesel, the volume coming into the country will stay steady even as domestic production falls. It’s a total contradiction to the intent of the RFS, which is to promote the growth of biofuels that provide American jobs, reduce emissions and enhance U.S. energy security.

Grassley and Sens. Joni Ernst (R-IA), Debbie Fischer (R-NE) Ben Sasse (R-NE) and John Thune (R-SD), along with others, met with Pruitt Tuesday (Grassley had lunch with the administrator Monday). Trump and Pruitt reached out to Gov. Reynolds Wednesday offering their assurances of support for the RFS. While the ensuing public statements from lawmakers this week were diplomatic, it was clear the senators did not hear what they wanted to hear from Pruitt. As Ernst noted, Pruitt “again claimed…that he will not do anything to undermine the program. However, we have heard this before.” And Grassley told reporters Monday that he and other farm-state lawmakers were ready to hold up EPA nominations if Pruitt does not give up the rollbacks of the RFS blending requirements.

The message to the EPA administrator from members of Congress, governors, farmers, rural Americans and others over how to carry out the agency’s RFS mission is clear: Follow the course that Congress and President Trump set in their commitment to the biofuels sector. In other words, get it right.