EPA urged to take the RFS just a little bit further
WASHINGTON, July 13, 2016 - From some perspectives, they
were so close. Yet for others, so far away.
When the Environmental Protection Agency proposed the 2017
Renewable Volume Obligations (RVOs) in May, EPA came agonizingly close to a
statutory target set by Congress. The proposal
called for 18.8 billion gallons of total renewable fuel to be blended with
conventional fuels, including up to 14.8 billion gallons of corn ethanol. Under
the law governing the Renewable Fuel
Standard, 24 billion total gallons are supposed to be blended in 2017, with
the potential for 15 billion gallons of corn ethanol to be included.
For the second straight year, the proposal angered both
sides of the renewable fuels debate, as evidenced by the more than 42,000
comments the EPA had received in a comment period that closed Monday.
On one hand, proponents of ethanol and other renewable fuels
say they are disappointed to see EPA cite a waiver provision – the existence of
which is being challenged in court – to set corn ethanol volume targets just 200
million gallons below the level called for in the law that created the RFS. A number of
stakeholders have sued the EPA for using an infrastructure waiver to set
lowered RFS volumes, contending that RFS only allows for a supply waiver.
On the other hand, the EPA angered the oil companies, small
engine manufacturers, and a host of other stakeholders either by setting the
blending requirements at a level they felt was too high or by simply setting
volumes that would allow the program to continue to exist.
In his comments,
Bob Dinneen, president and CEO of the Renewable Fuels Association, targeted
EPA’s use of the infrastructure concerns, arguing that the agency is outside
the law in its interpretation.
“EPA seems to be burdened by a fundamental misunderstanding
of the intent of the RFS,” Dinneen said. “The agency continues to justify
reducing required volumes of conventional renewable fuel by suggesting that
certain ‘marketplace realities’ preclude refiners from meeting the higher statutory
volumes.”
The National Corn Growers Association said the EPA is off
base in its production projections, and that could cause the ethanol industry
to suffer.
“EPA’s proposal badly misjudges the domestic supply of
ethanol, as well as the physical capacity of existing vehicles and
infrastructure to consume ethanol,” the group said.
“The ethanol industry has the capacity to supply substantially more renewable
fuel than would be needed to meet the 2017 RVOs.”
But while RFA and NCGA may feel the proposal doesn’t go far
enough, the American Petroleum Institute is trying to make a case that the rule
goes way too far. API has publicly stated that it wants ethanol blending
mandates capped at 9.7 percent of gasoline demand to stay below the so-called
blend wall, a perceived cap on the amount of renewable fuels the marketplace
could absorb at current blending levels. At present, the most common form of
motor gasoline is sold blended with 10 percent ethanol.
“It’s really our responsibility to comment on it and give
them our assessment of what the impacts of their proposal will be,” API’s Frank
Macchiarola told reporters on Monday. “We are deeply concerned as an
association that increased ethanol blends continue to drive us toward breaching
the blend wall.”
Macchiarola said API would be submitting more than 513,000
consumer comments in opposition to the RFS, hoping to drive the point home that
thousands of the people who will purchase the fuel don’t want to do so with
higher blends of ethanol.
“The EPA needs to make sure that they don’t breach the blend
wall for the sake of the American consumer,” he said.
Petroleum industry interests and their supporters in
Congress are fighting to limit ethanol to 9.7 percent of gasoline demand.
Demonstrating bipartisan support for this proposed hard cap on ethanol, seven
Democrats have joined 65 Republicans as co-sponsors of the Food and Fuel
Consumer Protection Act of 2016, HR 5180.
Introduced by Rep. Bill Flores, R-Texas, the bill would
amend the RFS rules by mandating that the EPA “administrator shall not
determine any renewable fuel obligation for a calendar year under this
subsection that would result, directly or indirectly, in the introduction into
commerce in the United States of a total volume of ethanol contained in
transportation fuel that is greater than 9.70 percent of the total volume of
gasoline projected to be sold or introduced into commerce in the United States
for such calendar year.”
The Flores bill states that its purpose is “to alleviate the
ethanol blend wall under the renewable fuel program, and for other purposes.”
The National Chicken Council, meanwhile, maintains that
sending so much of the nation’s corn crop to ethanol plants is making livestock
feed – and thus meat prices at the supermarket – more expensive.
“The compelled diversion of corn from feed to fuel continues
to exact a heavy toll on U.S. chicken producers, and American consumers at the
pump and the plant,” NCC said in a release.
“NCC believes the volumes proposed for 2017 are overly
aggressive and based on faulty assumptions about the fuel market and thus
should be further reduced to limit the disruptions to the corn market and
nation's feed supply,” the council told EPA.
The total number of comments submitted
to the EPA tends to go up even after the deadline closes as submissions are
properly received and catalogued. Just over 42,000 comments have officially
been recognized as submitted so far. The EPA is expected to announce final RVOs
by the end of November.
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