Tensions are growing as the EPA prepares to levy a new renewable fuel standard

Source: Benjamin Goad & Tim Devaney, The Hill • Posted: Friday, September 12, 2014

The EPA has dropped hints of late that it will raise the amount of ethanol that must be mixed in with gasoline and diesel fuels, after initially proposing to lower the standard.

This has the oil industry ramping up pressure on the Obama administration over what it says would be a monumental flip-flop by the EPA. Industry groups say too much ethanol can harm car engines.

Here’s what you need to know:

1) The American Petroleum Institute is accusing the Obama administration of caving to political pressure. The industry group suggests the EPA is raising the standard merely to help Rep. Bruce Braley (D-Iowa) in his campaign to fill retiring Sen. Tom Harkin’s (D-Iowa) seat. Iowa is a big farming state that grows much of the corn used to create ethanol. RFS is a big issue for voters there, and raising the standard could boost Braley.

2) Braley wrote to the Obama administration last month, requesting that it reject any attempt by the EPA to lower the ethanol mandate, which he says has created 75,000 jobs in Iowa.

“I urge you to reject any rule that cuts biofuels, recognizing that this would be detrimental to our nation’s energy supply and consumer choice at the pump,” Braley wrote.

3) All of this follows an EPA proposal last November to lower the RFS standard for ethanol to 13 billion gallons from 14.4 billion gallons in the original rule. But API is expecting a reversal when the new standard is released.