EPA’s new RFS proposal renews battle over ethanol
November 15, 2013 | 07:45 PM
The renewable fuels industry and its friends in Congress expressed deep disappointment in the Environmental Protection Agency’s proposal today to lower the volumetric requirements for biofuels under the Renewable Fuel Standard for 2014 and 2015, while ethanol critics and their congressional allies praised the proposal, but said the decision proves the RFS program isn’t working, with some calling for Congress to reform or repeal it.
In its announcement, the EPA said it is proposing to lower the requirement for biofuels production in 2014 from 18.15 billion gallons to 15.21 billion gallons, with specific requirements for various fuels. See link below.
The EPA said its 2014 proposal “seeks to put the RFS program on a steady path forward — ensuring the continued growth of renewable fuels while recognizing the practical limits on ethanol blending, the so-called ‘blend wall.’”
“The blend wall refers to the difficulty in incorporating increasing amounts of ethanol into the transportation fuel supply at volumes exceeding those achieved by the sale of nearly all gasoline as E10,” the EPA said. E10 gasoline contains 10 percent ethanol by volume.
The EPA noted that although production of renewable fuels has been increasing, overall gasoline consumption in the country is dropping, and is now less than anticipated when the RFS program was established in 2007.
An EPA official emphasized to The Hagstrom Report that the rule is a proposal that will be subject to a 60-day comment period once it is published in the Federal Register. Various renewable fuels groups said they would use the comment process to urge EPA to make changes.
Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., took issue with the proposed change, saying it would “pull the rug out from underneath a growing American-made energy sector poised to create thousands of jobs.”
“The so-called blend wall is a crisis manufactured by the oil industry, which is interested in eliminating the competition so they can continue reaping even greater windfall profits,” Stabenow said in a statement.
“The proposed rule could cost thousands of good paying clean energy jobs and mean less competition at the pump. I urge the administration to take a hard look at how this could seriously set back growth at a crucial time when tremendous progress is being made toward commercial-scale production of advanced biofuels.”
“We’re really, really disappointed in the proposed rule making,” said Growth Energy CEO Tom Buis. “It goes against the intent of the RFS,” he said, adding that “We should be moving forward, not backward.”
“When all the facts are presented during the public comment period, I am confident that it will be clear to everyone that the RFS is the most successful energy policy enacted within the last 40 years, and that the final rule should be modified to allow our country’s energy policy to move forward, not backward,” Buis said in a news release.
“We’re just sort of scratching our heads,” said Bob Dinneen of the Renewable Fuels Association, one of four Fuels America coalition members taking part in a call to reporters.
“Why is the administration telling us to produce less of clean-burning American fuel? This is exactly the wrong time to be reducing the required volume of renewable fuels.”
But the National Chicken Council, leading a coalition of livestock and poultry groups, issued a statement calling on Congress to find a “lasting solution to this rigid, inflexible program.”
NCC President Mike Brown said that although the EPA proposal was a “good first and welcome step,” Congress must act.
“Congressional action to repeal the RFS remains the most viable pathway to allowing all users of corn to have equal standing in the marketplace,” Brown said, adding that average annual costs of feed corn have skyrocketed and that the RFS was largely to blame for higher family food costs.
The National Association of Chain Restaurants also called for repeal, and leaders of a House effort to get the EPA to lower ethanol levels backed up the repeal efforts.
“While the EPA’s slight reduction of the RFS for 2014 acknowledges that the mandate is unworkable, it is not enough to provide the much-needed relief businesses, farmers, and consumers need,’ said Rep. Bob Goodlatte, R-Va. “Today’s announcement makes it even clearer that it will now be up to Congress to fix this broken mandate.”
Goodlatte and Reps. Peter Welch, D-Vt., Jim Costa, D-Calif., and Steve Womack, R-Ariz., the authors of the Renewable Fuel Standards Reform Act, issued a joint statement.
“While well-intentioned, the federal ethanol mandate is inflicting significant economic harm on families by driving up food prices, on dairy farmers by driving up feed prices, and on homeowners and outdoorsmen by ruining small engines,” said Welch. “The EPA’s decision to lower the fuel standard is a clear sign that this law isn’t working.”
The Environmental Working Group said the proposal “acknowledges that the Renewable Fuel Standard program is broken,” and also called on Congress to “permanently reform” it.
Sen. Charles Grassley, R-Iowa, blamed oil companies and food companies, saying they are using environmental groups as “political cover to gain traction on efforts to pull the plug” on the RFS.
Brent Erickson, executive vice president of the Biotechnology Industry Organization (BIO), called EPA’s proposal a “radical change in posture” that would put investment in biofuel technology at risk.
“This creates an intolerable amount of uncertainty, and will undercut investment,” Erickson said.
Noting that “investors are already nervous,” Erickson warned that the proposal could strand existing investments and put jobs at risk, slow or stop the development of new feed stocks and supply chains, and derail the ramping up of new technology.
The National Biodiesel Board said the proposal “would create a shrinking market, eliminate thousands of jobs and likely cause biodiesel plants to close across the country” while the American Soybean Association, whose members provide the raw material for biodiesel, said the proposal “goes backward.”
National Farmers Union President Roger Johnson said the growth of biofuels in recent years has strengthened rural America, and “made a whole lot of people feel good.”
Johnson said the EPA proposal is a “terrible signal about future development for the agricultural economy,” saying it would mean “sucking half a billion of bushels of demand from the corn market,” drive prices even lower and “put many farms in desperate economic straits.”
“Big oil has determined that biofuels are taking their market share, so they have prevented increased amounts of biofuel to be sold at gas stations,” Johnson said.
Jaff Lautt, CEO of POET, a South Dakota-based ethanol producer, said the proposal was of “grave concern” to his company’s investment in a new cellulosic ethanol plant in Emmetsburg, Iowa, a pilot project it hopes to turn into a commercial operation next year.
Lautt said lowering ethanol requirements would be “handing a complete win to the oil industry.”
The National Corn Growers Association also expressed “outrage,” saying the EPA proposal would “significantly weaken” the RFS.
“This recommendation is ill-advised and should be condemned by all consumers because it is damaging to our tenuous economy and short-sighted regarding the nation’s energy future,” said NCGA President Martin Barbre in a statement.
Both EPA Administrator Gina McCarthy and Agriculture Secretary Tom Vilsack maintained in statements that the administration remains committed to renewable energy.
McCarthy said biofuels would continue to be “a key part of the Obama administration’s ‘all of the above’ energy strategy, helping to reduce our dependence on foreign oil, cut carbon pollution and create jobs,” and said the EPA “continues to support the RFS goal of increasing biofuel production and use.”
EPA also noted that the Obama administration approved E15 for use in vehicles newer than model year 2001 and developed labeling rules to enable retailers to market E15, and that the Agriculture Department has made funding available through the Rural Energy for America Program to support deployment of “flex-fuel” pumps that can dispense a range of ethanol blends.
Vilsack cited the need to take a “long-term approach.”
“Clearly, as governor of Iowa and as U.S. Secretary of Agriculture, my support for the RFS has been steady and strong,” Vilsack said.
“But I also believe that improved distribution and increased consumer use of renewable fuels are critical to the future of this industry,” he said. “We are proud of our record to support increased demand for renewable fuels. USDA has invested in the creation of advanced biorefineries across the nation; developed a unique partnership with the U.S. Navy and Department of Energy to create new biofuels for marine and aviation use; and boosted markets for nearly 3,000 U.S. companies that are creating biobased products from homegrown materials.”
But the renewable fuel industry expressed doubt at that commitment.
“We’re really, really disappointed in the proposed rule making,” Buis said. “It goes against the intent of the RFS,” he said, adding that “We should be moving forward, not backward.”
In its announcement, the EPA said it is proposing to lower the requirement for biofuels production in 2014 from 18.15 billion gallons to 15.21 billion gallons, with specific requirements for various fuels. See link below.
The EPA said its 2014 proposal “seeks to put the RFS program on a steady path forward — ensuring the continued growth of renewable fuels while recognizing the practical limits on ethanol blending, the so-called ‘blend wall.’”
“The blend wall refers to the difficulty in incorporating increasing amounts of ethanol into the transportation fuel supply at volumes exceeding those achieved by the sale of nearly all gasoline as E10,” the EPA said. E10 gasoline contains 10 percent ethanol by volume.
The EPA noted that although production of renewable fuels has been increasing, overall gasoline consumption in the country is dropping, and is now less than anticipated when the RFS program was established in 2007.
An EPA official emphasized to The Hagstrom Report that the rule is a proposal that will be subject to a 60-day comment period once it is published in the Federal Register. Various renewable fuels groups said they would use the comment process to urge EPA to make changes.
Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., took issue with the proposed change, saying it would “pull the rug out from underneath a growing American-made energy sector poised to create thousands of jobs.”
“The so-called blend wall is a crisis manufactured by the oil industry, which is interested in eliminating the competition so they can continue reaping even greater windfall profits,” Stabenow said in a statement.
“The proposed rule could cost thousands of good paying clean energy jobs and mean less competition at the pump. I urge the administration to take a hard look at how this could seriously set back growth at a crucial time when tremendous progress is being made toward commercial-scale production of advanced biofuels.”
“We’re really, really disappointed in the proposed rule making,” said Growth Energy CEO Tom Buis. “It goes against the intent of the RFS,” he said, adding that “We should be moving forward, not backward.”
“When all the facts are presented during the public comment period, I am confident that it will be clear to everyone that the RFS is the most successful energy policy enacted within the last 40 years, and that the final rule should be modified to allow our country’s energy policy to move forward, not backward,” Buis said in a news release.
“We’re just sort of scratching our heads,” said Bob Dinneen of the Renewable Fuels Association, one of four Fuels America coalition members taking part in a call to reporters.
“Why is the administration telling us to produce less of clean-burning American fuel? This is exactly the wrong time to be reducing the required volume of renewable fuels.”
But the National Chicken Council, leading a coalition of livestock and poultry groups, issued a statement calling on Congress to find a “lasting solution to this rigid, inflexible program.”
NCC President Mike Brown said that although the EPA proposal was a “good first and welcome step,” Congress must act.
“Congressional action to repeal the RFS remains the most viable pathway to allowing all users of corn to have equal standing in the marketplace,” Brown said, adding that average annual costs of feed corn have skyrocketed and that the RFS was largely to blame for higher family food costs.
The National Association of Chain Restaurants also called for repeal, and leaders of a House effort to get the EPA to lower ethanol levels backed up the repeal efforts.
“While the EPA’s slight reduction of the RFS for 2014 acknowledges that the mandate is unworkable, it is not enough to provide the much-needed relief businesses, farmers, and consumers need,’ said Rep. Bob Goodlatte, R-Va. “Today’s announcement makes it even clearer that it will now be up to Congress to fix this broken mandate.”
Goodlatte and Reps. Peter Welch, D-Vt., Jim Costa, D-Calif., and Steve Womack, R-Ariz., the authors of the Renewable Fuel Standards Reform Act, issued a joint statement.
“While well-intentioned, the federal ethanol mandate is inflicting significant economic harm on families by driving up food prices, on dairy farmers by driving up feed prices, and on homeowners and outdoorsmen by ruining small engines,” said Welch. “The EPA’s decision to lower the fuel standard is a clear sign that this law isn’t working.”
The Environmental Working Group said the proposal “acknowledges that the Renewable Fuel Standard program is broken,” and also called on Congress to “permanently reform” it.
Sen. Charles Grassley, R-Iowa, blamed oil companies and food companies, saying they are using environmental groups as “political cover to gain traction on efforts to pull the plug” on the RFS.
Brent Erickson, executive vice president of the Biotechnology Industry Organization (BIO), called EPA’s proposal a “radical change in posture” that would put investment in biofuel technology at risk.
“This creates an intolerable amount of uncertainty, and will undercut investment,” Erickson said.
Noting that “investors are already nervous,” Erickson warned that the proposal could strand existing investments and put jobs at risk, slow or stop the development of new feed stocks and supply chains, and derail the ramping up of new technology.
The National Biodiesel Board said the proposal “would create a shrinking market, eliminate thousands of jobs and likely cause biodiesel plants to close across the country” while the American Soybean Association, whose members provide the raw material for biodiesel, said the proposal “goes backward.”
National Farmers Union President Roger Johnson said the growth of biofuels in recent years has strengthened rural America, and “made a whole lot of people feel good.”
Johnson said the EPA proposal is a “terrible signal about future development for the agricultural economy,” saying it would mean “sucking half a billion of bushels of demand from the corn market,” drive prices even lower and “put many farms in desperate economic straits.”
“Big oil has determined that biofuels are taking their market share, so they have prevented increased amounts of biofuel to be sold at gas stations,” Johnson said.
Jaff Lautt, CEO of POET, a South Dakota-based ethanol producer, said the proposal was of “grave concern” to his company’s investment in a new cellulosic ethanol plant in Emmetsburg, Iowa, a pilot project it hopes to turn into a commercial operation next year.
Lautt said lowering ethanol requirements would be “handing a complete win to the oil industry.”
The National Corn Growers Association also expressed “outrage,” saying the EPA proposal would “significantly weaken” the RFS.
“This recommendation is ill-advised and should be condemned by all consumers because it is damaging to our tenuous economy and short-sighted regarding the nation’s energy future,” said NCGA President Martin Barbre in a statement.
Both EPA Administrator Gina McCarthy and Agriculture Secretary Tom Vilsack maintained in statements that the administration remains committed to renewable energy.
McCarthy said biofuels would continue to be “a key part of the Obama administration’s ‘all of the above’ energy strategy, helping to reduce our dependence on foreign oil, cut carbon pollution and create jobs,” and said the EPA “continues to support the RFS goal of increasing biofuel production and use.”
EPA also noted that the Obama administration approved E15 for use in vehicles newer than model year 2001 and developed labeling rules to enable retailers to market E15, and that the Agriculture Department has made funding available through the Rural Energy for America Program to support deployment of “flex-fuel” pumps that can dispense a range of ethanol blends.
Vilsack cited the need to take a “long-term approach.”
“Clearly, as governor of Iowa and as U.S. Secretary of Agriculture, my support for the RFS has been steady and strong,” Vilsack said.
“But I also believe that improved distribution and increased consumer use of renewable fuels are critical to the future of this industry,” he said. “We are proud of our record to support increased demand for renewable fuels. USDA has invested in the creation of advanced biorefineries across the nation; developed a unique partnership with the U.S. Navy and Department of Energy to create new biofuels for marine and aviation use; and boosted markets for nearly 3,000 U.S. companies that are creating biobased products from homegrown materials.”
But the renewable fuel industry expressed doubt at that commitment.
“We’re really, really disappointed in the proposed rule making,” Buis said. “It goes against the intent of the RFS,” he said, adding that “We should be moving forward, not backward.”
