The People of America's Oil and Natural Gas Indusry

Biodiesel's 'Success Story'

Bob Greco

Bob Greco
Posted December 20, 2013

In a recent letter to the Obama administration, some members of Congress pushed officials to increase EPA’s proposed 2014 mandate for biodiesel, arguing that EPA’s plan to keep the mandate at its 2013 level could reduce production by approximately 25 percent. With all due respect, the mandate exists as a floor, not as a ceiling, and the biodiesel industry is welcome to exceed it.

And guess what: The biodiesel industry has been doing just that for the past three years – as the lawmakers’ letter points out. According to EPA, since 2011 the volumes of biomass-based diesel fuels produced have been well above EPA’s mandated requirements:

biodiesel_chart

The lawmakers write that increasing the mandate will “allow” the industry to grow. But imposing a mandatory requirement isn’t “allowing” an industry to grow and compete in the marketplace. It’s forcing a product on consumers with no apparent consideration for the market reality.

 As we’ve seen before, a mandate does not help consumers by “diversifying fuel supplies and by creating competition in the fuels market,” as the lawmakers claim.  To the contrary, it saddles consumers with a product without regard to actual demand. Biodiesel should compete in the marketplace. Exported biodiesel isn’t artificially supported by the Renewable Fuel Standard (RFS), and exports have soared in the past few years. But increasing the mandate doesn’t take into consideration whether the domestic market can absorb the product, potentially forcing out other fuels (which is what’s happening with corn-based ethanol).

In the letter, the authors claim that “biodiesel has been a great RFS success story … going far beyond initial expectations.” If that’s the case, then we should repeal the RFS, allow biodiesel to compete in the open market and let it stand on its own merits.

ABOUT THE AUTHOR

Bob Greco is group director of downstream and industry operations at the American Petroleum Institute. With 21 years of experience, Bob directs activities related to refining, pipeline, marketing, and fuels issues. He has managed exploration and production activities, policy analysis, climate change issues, marine transportation, refining, gasoline and jet fuel production issues and Clean Air Act implementation efforts. Before coming to API, Bob was an environmental engineer with the U.S. Environmental Protection Agency, with expertise in automotive emission control technologies. He has a M.S. degree in environmental engineering from Cornell University and a B.A. in biology from Colgate University.