Agriculture Secretary Tom Vilsack said Thursday a recent uptick in gasoline consumption should be considered by the Environmental Protection Agency when it determines how much renewable fuels should be blended into the motor fuel supply this year.
The EPA, which oversees the country’s Renewable Fuel Standard, proposed in November cutting the fuel requirement in 2014 to 15.2 billion gallons of ethanol and other biofuels, 3 billion gallons less than Congress required in a 2007 law. It would mark the first-ever drop in the Renewable Fuel Standard that requires refiners to blend ever increasing amounts of biofuels into the nation’s gasoline supply through 2022.
The EPA has said a 2007 law outlining how much renewable fuel would be required to be included in the fuel supply was growing increasingly difficult for blenders to meet as motorists drove less and cars became more fuel efficient. Most gasoline today contains 10 percent ethanol.
But since November, new data shows consumers fueling up more at the pump, a factor Vilsack said the EPA should take into account when it comes out with its final blending level expected later this spring.
“Since (the EPA) came out with that proposal we’re using more gas so it just points out the challenge they have in fixing the right number,” Vilsack told reporters after appearing before the House Agriculture Committee. “Obviously, my hope is we do everything we possibly can to make this industry as viable and as supported as possible and we’ve expressed that to EPA.”
During the hearing, Rep. Steve King, R-Iowa, also referred to the need for the EPA to use more recent information. “My recommendation to the EPA is that it review the data with current numbers rather than 2011 numbers and go back and carefully read the law,” he said.
The EPA, without addressing the new fuel consumption data specifically, said the agency is in the process of developing the final rule. “We will take into account any relevant information that has been made available to the agency as the rule is finalized,” it said in an email.
Vilsack stopped short of saying whether the EPA should make changes to its proposal when issuing the final blending rule.
For now, he said, USDA would focus on helping the ethanol industry by looking for ways to expand the use of higher blends such as E15 (fuel with 15 percent ethanol) and E85 in the market place. He also said the industry has significant opportunities to export its product to China, India, Japan, among other countries.
“There is a huge export opportunity here that we’ve not explored at all, that we’re going to begin to explore,” he said.
Wholesale ethanol prices have soared in recent weeks, a result of the cold, snowy winter that has slowed the transportation of the corn-based fuel by rail. Ethanol spot prices in Chicago, for example, have risen to around $3.75 a gallon from just over $2 at the beginning of 2014, the Energy Department’s statistical arm said Thursday. Iowa, the country’s largest ethanol producer, has 42 refineries capable of producing over 3.8 billion gallons annually.