Renewable Fuel Standard: Advocates and Opponents Speak Out Leading Up to EPA’s Final Rule

With a decision on the RFS expected sometime in June, advocacy groups, industry and lawmakers on all sides have been voicing their opinions on biofuels. While there have been musings of a partial rollback of EPA’s proposed initial reduction, the final Renewable Volume Obligates (RVOs) are still being calculated by the EPA. Recently, EESI, along with environmental, energy and farm interest groups met with Janet McCabe, Acting EPA Assistant Administrator for Air and Radiation. They voiced their concerns about unintended consequences of potential reductions in the RVO by EPA on the environment, farm conservation and human health. EESI Executive Director Carol Werner commented on the potential for biofuels to help deal with the impacts of climate change. A lifecycle analysis performed by the Department of Energy’s (DOE) Argonne National Laboratory found corn ethanol reduces greenhouse gas (GHG) emissions by an average of 34 percent as compared to gasoline. And there are even much higher GHG reductions possible from advanced cellulosics such as corn stover and micanthus. She remarked to McCabe, "We urge EPA not to take any steps that would compromise efforts to reduce emissions that contribute to a changing climate … We ask you to ensure that the full potential of biofuels to meet multiple objectives can be realized."

Several lawmakers took a decidedly pro-RFS tone this week. On April 8, the Senate Committee on Agriculture, Nutrition and Forestry held a hearing, Advanced Biofuels: Creating Jobs and Lowering Prices at the Pump. Chairwoman Stabenow (D-MI) enthused during her opening remarks that, “we’ve heard for years that advanced biofuels are just around the corner. Well, we’re here. We’re at the point where it’s actually happening.” Expressing strong support for the RFS, she stated, “to continue growing this industry, we need policies that support it … This Committee and Congress took an important first step by passing the Farm Bill with funding for the Energy Title, now we need to provide certainty through a strong Renewable Fuel Standard and tax credits to support long term investments in our energy future.” The same day, EPA Administrator Gina McCarthy spoke to journalists about the RFS at the annual meeting of North American Agricultural Journalists. While McCarthy cited implementation issues with the RFS, such as the “blend wall” as a reason for the reduction, she also noted that an uptick in “gasoline demand had an impact in the proposal and it will also be reflected in the final rule.” Agriculture Secretary Tom Vilsack also pointed out in his remarks to Agricultural Journalists that the EPA should consider the recent uptick in gasoline in their RVO calculations.

The RFS also has been under attack in court. Earlier this week the U.S. Court of Appeals for the District of Columbia Circuit heard two cases against the RFS. Monroe Energy LLC., a subsidiary of Delta Air Lines Inc., argued that the RFS poses an undue burden, and will cost them $100 million to comply for 2013 alone, since they must purchase Renewable Identification Numbers (RINs). Under the 2007 Energy and Independence Security Act (EISA), refiners are obligated to either blend 10 percent ethanol into fuel, or purchase RINs that are created for every gallon of renewable fuel. The American Petroleum Institute’s (API) suit focused on delays in EPA rulings, and whether or not the delays are enough to overturn it. The delays led to new data being incorporated from the Energy Information Agency (EIA) and, according to API, caused refiners to be responsible for a greater amount of fuel. Judges on the case pointed out that EPA should use the most up-to-date information, even if it creates a greater regulatory burden for refiners. The court is also considering whether or not RINs should carry over on a two-year basis, which has led to the practice of RIN banking by some.

While the petroleum industry has an obligation, under the RFS, to either blend renewable fuel or purchase RINs, the reduction in the proposed RVOs have opened the door for the petroleum industry and its allies to forge a well-funded fight against the RFS and its main goal, decreased petroleum dependence. While the petroleum industry has made several arguments against the RFS, the bottom line is that farmers and the biofuels industry can meet the projected 2014 targets. Not only would a reduction be chilling to investors and technology developers in the growing cellulosic industry, it would increase both GHG emissions and human exposure to the toxic aromatic compounds in gasoline. The EPA has continually evoked the practical challenges of implementing the RFS as a reason for the proposed reduction. Technically, the EPA is right, since at this point, infrastructure is the primary issue in getting mid-and higher level blends to market. EPA has the authority to solve these infrastructure challenges: blender pumps, renewed federal support for FlexFuel Vehicles and consumer education would easily push past the E10 blend wall. Plus, EPA has certified E15 for use in vehicles manufactured from 2001 through present. Rep. Dave Loebsack’s (D-IA) Re-FUEL Act, which provides small grants for blender pumps, as well as EV charging stations is a step in the right direction. But the same “blend wall” argument will happen year after year, unless there is widespread federal support of not only the producers and manufacturers of biofuels, but the infrastructure and vehicles needed to bring this fuel to market.