White House reviewing U.S. 2014 biofuel targets

Source: By Ayesha Rascoe, Reuters • Posted: Friday, September 6, 2013

Rod Cochran checks gauges at the Abengoa Bioenergy ethanol refinery in downstate Madison. (Kevin G. Hall/ McClatchy-Tribune photo)

WASHINGTON (Reuters) – The Environmental Protection Agency has sent its proposal for U.S. biofuel use targets for 2014 to the White House for review, as the agency races to avoid the delays that plagued the renewable fuel program this year.

Next year’s targets are due to be proposed this month and finalized in December. That timeline could slip, however, depending on the how long the White House’s Office of Management and Budget takes to review the proposal it received late last week.

As oil refiners face soaring costs for biofuel credits, the EPA has pledged to modify the biofuel targets for 2014 set out by the nation’s Renewable Fuel Standard and to issue the final rule more swiftly than it did this year.

While refiners have called for the full repeal of the biofuel mandate, which they say is fundamentally broken, biofuel supporters have said EPA’s pledge to modify the 2014 targets shows that the agency has the power to address the concerns raised about the program.

“The important part is to get that OMB review done as quickly as possible and get the proposed rule out for public comment,” Tom Buis, the head of renewable fuel trade group Growth Energy, said on a conference call Thursday.

The 2013 volume requirements were finalized in early August, more than eight months after the legislative deadline.

Requiring increasing amounts of biofuels to be blended into U.S. gasoline and diesel supplies, the Renewable Fuel Standard has faced increasing scrutiny as the nation approaches the so-called “blend wall.”

The EPA has projected that in 2014 the nation will hit the point when the biofuel law will require the use of more ethanol than can be blended into gasoline supplies at the 10 percent level that now dominates U.S. gas pumps.

Currently, the law would require the use of 18.15 billion gallons of biofuels in 2014, up from 16.55 billion gallons this year.

Refiners have been reluctant to blend more than 10 percent ethanol into gasoline, citing concerns about possible harm to engines in older automobiles. As a result, refiners have said they may export more gasoline or produce less of it if targets are not adjusted, either of which could reduce supplies.