The People of America's Oil and Natural Gas Indusry

Repeal the RFS

Mark Green

Mark Green
Posted November 27, 2012

End it, don’t mend it: That’s industry’s message to Congress on the Renewable Fuels Standard (RFS). API Downstream Group Director Bob Greco, during a conference call with reporters on problems with the program:

“We believe the Renewable Fuels Standard is unworkable and should be repealed. Despite repeated and ongoing efforts to address the program’s shortcomings – through regulatory petitions, legal actions and suggested solutions to implementation concerns – little has been done to make the program workable. And sometimes actions have been taken that make matters worse.”

The latest legal action involving the RFS: A lawsuit filed Monday in the U.S. Court of Appeals for the District of Columbia by API, challenging EPA’s decision to mandate the use of 1.28 billion gallons of biodiesel in 2013 – a 28 percent increase from the 2012 requirement. API also filed a petition for administrative reconsideration of the 2013 biodiesel mandate with EPA.

Greco outlined flaws with the RFS:

  • EPA has required refiners to purchase credits for failing to blend cellulosic ethanol in motor fuel even though no one makes and sells that special variety of ethanol.
  • EPA has been unable to address problems caused by the issuance of fraudulent renewable fuel credits, known as RINs, in a timely way. The agency initially chose to fine refiners who unknowingly bought bogus credits from companies listed on EPA’s website.
  • EPA sanctioned the use of E15 blends in vehicles despite the possibility the fuel could harm vehicles – 5 million or more – as well as service station pump equipment. EPA acted before critical studies were finished.
  • The approaching “blend wall.” That’s the point where the amount of ethanol required to be blended under the RFS exceeds the ability of the U.S. vehicle fleet to safely use those blends. Timely action is required because the “blend wall” might be reached as early as next year. Greco: “We don’t want to wait (to act) until the problem is upon us.”

Additionally, there are valid questions as to whether the RFS is still needed because one of the original goals behind its creation – increased U.S. energy independence and security – is being achieved by surging domestic oil and natural gas production. Greco:

“The RFS was enacted at a time when our nation’s energy landscape was far different. With the current boom in domestic oil and natural gas development, we are steadily reducing our foreign energy dependence – well beyond what the RFS program has achieved. Also, the increasing use of affordable, plentiful domestic natural gas has helped drive a decline in greenhouse gas emissions. The notion that we need a Renewable Fuels Standard to promote energy independence and security, as the 2007 statute is named, has been turned on its head by the tremendous growth in domestic oil and natural gas.”

America’s oil and natural gas industry supports renewable fuels. Today some 15 billion gallons of biofuels are blended in gasoline and diesel annually. But the program as originally designed isn’t working, and its core objective is being accomplished more effectively by rising oil and natural gas output. “We’re in a new reality from where we were in 2007,” Greco said. It’s time for the RFS to go.

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.