WASHINGTON, Nov. 4, 2013 - The Renewable Fuels Association, Growth Energy and the Biotechnology Industry Organization filed Friday a motion with the U.S. Court of Appeals for the District of Columbia to intervene in a lawsuit filed by the oil industry in September challenging EPA’s implementation of this year’s Renewable Fuel Standard (RFS).
The agency handed down this year’s RFS volume requirements until August, nearly 10 months after the statute authorizing the standard requires the biofuel blending amounts be issued. The delay came as oil industry interests, including the American Petroleum Institute (API), the American Fuel and Petrochemical Manufacturers (AFPM) and other interests challenged the EPA’s RFS volume requirements for last year, 2012.
In its January 2013 ruling on the 2012 proposals, the court affirmed EPA’s authority to set advanced and cellulosic biofuel volume obligations at the maximum achievable level, in order to achieve Congress’ intent to promote production and use of renewable fuels. However, the three-judge panel found that the data supporting EPA’s mandate that refineries blend 8.7 million gallons of cellulosic ethanol in the nation’s transportation fuel supply in 2012 was not sufficient. The agency revised the cellulosic amount down to 6 million gallons. The 2007 Energy Independence and Security Act had originally set a cellulosic requirement of 500 million gallons for last year.
BIO, Growth Energy and RFA are asking the court to intervene on behalf of their member companies, contending that biofuel producers, advanced biofuel technology developers and energy crop developers depend on the stable implementation of the RFS.
“Moreover, a reduction in the volumetric requirement for any one type of renewable fuel under the RFS could affect the demand for other types of renewable fuels,” the biofuel groups said in the filing.
The court has consolidated the suits filed by API and AFPM with another suit filed by Monroe Energy, a fuel distributor recently purchased by Delta Air Lines to provide the carrier’s jet fuel. The airline said fluctuation in the price of Renewable Identification Numbers (RINs), or credits used to certify obligated parties have met their biofuel blending requirements, have cost Delta more in jet fuel than the cost of buying Monroe.
The oil industry contends that an ethanol “blend wall” caused by a reduction in demand for transportation fuel has driven up the price of RINs. API and the AFPM have asked Congress to gut or eliminate the RFS.
The biofuel industry says that with wider sales of a 15-percent blend of ethanol (E15) and infrastructure development, the oil industry has the means to increase the amount of biofuel it blends into the nation’s transportation fuels. But biofuel advocates say the oil industry refuses to do so to protect its market share.
Meanwhile, several lawmakers on Capitol Hill have called for investigation into the volatility of RIN prices after allegations arose that Wall Street speculation drove the prices up. An RIN that cost about 9 cents in January rose to nearly $1.50 in July just as a House Energy subcommittee meeting was held to hear testimony from oil interests and the biofuel industry on the RFS. The prices began falling rapidly shortly after the hearing and were running around 40 cents last month.
The Court of Appeals last week agreed to a request from the plaintiffs to expedite its consideration of the case and post a decision before June, 2014, when the oil industry will be called upon to fully meet its 2013 obligations.
Last month, reports of a “leaked” EPA document indicated the agency is considering severely ramping down its requirements first-generation, corn ethanol from a scheduled 14.8 billion gallons down to 13 billion gallons, even less than the 13.6 billion gallons required for this year.
EPA’s proposals for the 2014 RFS volume requirements are under review by the White House Office of Management and Budget.
The White House has declined to confirm the authenticity of the documents cited in the media reports, choosing instead to issue statements reaffirming its support of the biofuels industry and offer assurances that any proposal to be issued will be open to public comment from stakeholders.
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