RFS Critics Readying Letter to EPA, Warning of Blendwall Concerns

Source: By Rachel Gantz , OPIS • Posted: Wednesday, October 14, 2015

Five House lawmakers who have introduced or co-sponsored legislation to reform the Renewable Fuel Standard (RFS2) have drafted a letter to EPA, urging the agency from breaching the “blendwall” when it issues the final 2014-2016 RFS targets.

Reps. Bill Flores (R-Texas), Peter Welch (D-Vt.), Bob Goodlatte (R-Va.), Jim Costa (D-Calif.) and Steve Womack (R-Ark.), are distributing a “Dear Colleague” letter, urging fellow congressmen to sign onto the letter before it is sent later this month to EPA Administrator Gina McCarthy, according to a member notice issued Friday by the American Motorcyclist Association (AMA) and obtained by OPIS.

On May 29, EPA proposed its 2014-2016 RFS targets. For 2016, EPA proposed a conventional biofuel target of 14 billion gal, and a total of 17.40 billion gal for the year. EPA is expected to issue its final 2014-2016 RFS targets by Nov. 30.

“We write to express significant concern with the recently proposed 2016 Renewable Volume Obligations (RVO) under the RFS,” wrote the lawmakers in the draft letter. “The RVO as currently proposed would constitute a breach of the ethanol blendwall, which would cause adverse impacts on American consumers and the economy,” they noted.

“Increased fuel efficiency has led to shrinking gasoline demand. This current reality, coupled with an increasing biofuel blending level requirement, has exacerbated the onset of the E10 blendwall — the point at which the gasoline supply is saturated with the maximum amount of ethanol that the current vehicle fleet, marine and other small engines and refueling infrastructure can safely accommodate. We agree with the EPA’s conclusion in its first RVO proposal for 2014 and in its current proposal for 2014, 2015, and 2016 that the E10 blendwall is a binding constraint,” the lawmakers continued.

“We are gravely concerned, however, that despite the agency’s recognition of the blendwall, the 2016 proposal acknowledges that it will be breached nonetheless. Specifically, EPA states that the 2016 RVO ‘includes volumes of renewable fuel that will require either ethanol use at levels significantly beyond the level of the E10 blendwall, or significantly greater use of non-ethanol renewable fuels than has occurred to date,'” the lawmakers wrote.

“EPA acknowledges that its 2016 RVO proposal would require significant greater use of E15 and E85 in order to meet the proposed mandate in 2016. Therefore, this proposal is problematic not only in principle, but it is also impractical
since it would take decades, not months, to build out the compatible vehicle fleet and install the necessary retail infrastructure to accommodate the higher blends of ethanol,” the lawmakers continued.

“Congress will continue its work toward a bipartisan solution to dealing with the RFS. As this work continues, it is critical that EPA use its statutory authority to waive EISA’s [the 2007 energy bill that included RFS2] conventional biofuel volume to keep the blending requirements below the E10 blendwall, and to help limit the economic and consumer harm this program has already caused,” the lawmakers concluded.

According to AMA, the deadline for signatures to be added to the EPA letter is Oct. 23.