Politics, Deadlines Add Extra Layer to RFS Decision

Source: By Janell Thomas, Farm Futures • Posted: Monday, October 6, 2014

American Petroleum Institute says RFS is being used as political leverage; Farm-state governors reaffirm support of higher mandated volumes

Governors’ Biofuels Coalition President and Vice President, Illinois Gov. Pat Quinn and Iowa Gov. Terry Branstad, said this week that the Obama Administration should ensure the future of the Renewable Fuel Standard amid speculation that the policy could be caught up in politics and proposed lower levels may be raised.

Lower volumes for the RFS – a policy that establishes the minimum volumes of renewable fuels that must be blended into U.S. fuel supplies – were proposed last November. At a mandated 13.01 billion gallons of corn ethanol, the proposal represented a decrease from the previously mandated 14.4 billion gallons as requested by the original policy.

Gas pumps with a sign indicating the gas is containing up to 10 % ethanol are seen at Victory gas station on November 15, 2013 in Pembroke Pines, Florida. (Photo by Joe Raedle/Getty Images)
Gas pumps with a sign indicating the gas is containing up to 10 % ethanol are seen at Victory gas station on November 15, 2013 in Pembroke Pines, Florida. (Photo by Joe Raedle/Getty Images)

While the concern still exists among policy opponents that the RFS mandates blending of more renewable fuels than the E10 market can handle, debate over the RFS also has been fueled by the impending November election, according to the American Petroleum Institute.

“The White House seems to be focused on one goal – keeping control of the Senate after next month’s election. Namely, they want to give cover to the Democrat running neck and neck with his opponent in the Iowa Senate race,” API’s Downstream Group Director Bob Greco said Thursday, referring to candidate Bruce Braley.

Related: What’s Holding Up EPA Decision On RFS?

According to Greco, the race is pushing the White House to consider raising the mandate from its November proposed levels, if it will benefit the Democratic candidate.

Aside from political speculation, API also criticized the sluggish pace of approval.

Now well past the Nov. 30, 2013, deadline to provide final volumes, the policy is roughly five weeks into a possible 90-day review by the White House Office of Management and Budget before final release.

“The year is nearly over and refiners can’t retroactively put more ethanol into gasoline,” Greco noted.

Pressure from farm-state governors

Amid the criticisms, Quinn and Branstad, who lead the Governors’ Biofuels Coalition, said in a letter to the Obama Administration that there’s support for the RFS based on economic and national security concerns.

Through continued expansion of biofuels plants, the group in a letter said there will be improved job creation, lower greenhouse gas emissions and lower expenditures on imported oil. Another concern despite the lower levels was the impact on biodiesel, the group said.

“The EPA’s proposed volume cuts for biodiesel are creating turmoil, resulting in production cutbacks and layoffs,” it said. “More than halfway through the year, many jobs are in jeopardy and many biodiesel plants have been negatively impacted.”

The governors also said lower volumes discourage investment in the growing cellulosic biofuels industry.

“Amending the proposed rule to one that will build and restore America’s robust leadership in the development and production of domestically produced renewable fuels is crucial in ensuring a successful future in rural America,” the letter concluded.