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EPA Proves Inflexible on RFS Mandates

Mark Green

Mark Green
Posted August 6, 2013

Missed opportunity. Recognizing growing concern in Congress that the Renewable Fuel Standard (RFS), with its ever-increasing mandates for ethanol use, is broken, EPA whiffed on Tuesday, with announced 2013 standards for renewable fuel use. Here’s how:

Blend wall - Faced with mounting indications that the RFS’ ethanol mandates are bringing on the blend wall – the point at which refiners will have to blend more ethanol into the gasoline supply than is safe for nearly 95 percent of the vehicles currently on the road – the agency did nothing.

EPA considered the facts – including serious problems posed by approving higher ethanol blend E15 gasoline for the market – pondered the 16.55 billion gallon renewable fuel target for 2013 set out in law and used its discretionary power under the RFS to finalize the 2013 target at … 16.55 billion gallons.

One of ethanol’s big supporters hailed EPA’s announcement as proof positive of the “inherent flexibility that is the backbone of the RFS.” Inherent flexibility? Again, the standard was 16.55 billion gallons, and it still is. The RFS as administered by the EPA is flexible alright – flexible like concrete.

Cellulosic – EPA ordered the use of 6 million gallons of cellulosic biofuels this year, down from the 14 million target the agency proposed in February – clearly trying to comply with a federal court ruling requiring EPA to set the cellulosic target in a way that reflects market conditions. But here’s your 2013 commercial cellulosic market so far: 73,000 gallons – or 1.2 percent of the final mandate.

There was no commercial cellulosic production in 2011 or 2012. (20,000 gallons produced last year were exported and didn’t count toward RFS compliance.) Lowering the cellulosic target from an unrealistic 14 million gallons to an equally unrealistic 6 million gallons isn’t addressing the situation – and refiners still could face penalties for not using a fuel that doesn’t commercially exist.

Markets – Although the deadline for this year’s biofuels standards was last November, the agency is just now finalizing them. So much for market signals. EPA murkily indicated it will address RFS problems in renewable projections for 2014:

In the rule issued today, EPA is announcing that it will propose to use flexibilities in the RFS statute to reduce both the advanced biofuel and total renewable volumes in the forthcoming 2014 RFS volume requirement proposal. 

Unfortunately, problems with the broken RFS are apparent today, and given EPA’s past performance its new assurances have a hollow quality to them. Tuesday’s announcement recognizes significant issues with the program’s mandates but fails to act on them in any meaningful way. API President and CEO Jack Gerard:

“While the administration acknowledges that higher ethanol mandates are unworkable by suggesting a new approach for the 2014 standards, EPA missed an opportunity to fix the problem this year.  Now it’s up to Congress to exercise leadership and move quickly to end this dangerous mandate before it hurts consumers, damages vehicles, and harms our economy.”

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.