UPDATED - RFS2 Rule Withdrawn From OMB Review

January 27, 2009 06:00 PM

via a special arrangement with Informa Economics, Inc.

EPA complying with White House memo on regulatory review

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

The rule that the Environmental Protection Agency (EPA) was proposing to implement the 2007 energy bill expansion of the renewable fuels mandate (RFS2) was withdrawn from Office of Management and Budget (OMB) review. The EPA said it has withdrawn all rulemakings and notices that it had submitted to the OMB during the Bush administration that were pending review.

The EPA previously announced that the 2009 renewable fuels standard (RFS) will be set at 10.21 percent, ensuring that at least 11.1 billion gallons of renewable fuels will be blended into transportation gasoline this year (of which 10.50 billion gallons is corn-based ethanol). The announcement was made during the interim period between the EPA’s enactment of the RFS in the Energy Policy Act of 2005 and its proposed rulemaking for the RFS in the Energy Independence & Security Act of 2007 (RFS2), which may contain calculations pertaining to indirect land use.

According to an EPA spokeswoman, the action is in line with a memorandum that White House Chief of Staff Rahm Emanuel issued Jan. 20 asking federal agencies to halt action on pending rulemakings until Obama appointees have been able to review them. Emanuel issued a memorandum to the heads of executive departments and agencies requesting that no proposed or final regulation should be sent to the Office of the Federal Register for publication “unless and until it has been reviewed and approved by a department or agency head appointed or designated by the President after noon on January 20, 2009” or by the secretary of defense.

EPA spokeswoman Cathy Milbourn issued a statement Jan. 28 saying, “EPA is complying with the White House memo on regulatory review. We will take all appropriate actions necessary to fully implement review of new or pending regulations.” Lisa Jackson was confirmed by the Senate Jan. 22 as EPA administrator and took office Jan. 26. Under the Emanuel memo, she is charged with reviewing and approving all regulatory proposals that were being processed as of Jan. 20.

The EPA items withdrawn from OMB are:

-- a review of the national ambient air quality standard for nitrogen dioxide;
-- a proposed rule to establish a program for mandatory reporting of greenhouse gas emissions;
-- a proposed rule to establish regulations to implement the renewable fuels standard;
-- a notice of policy and procedures for initial screening under the Endocrine Disruptor Screening Program;
-- a proposed rule for a regulatory determination on financial test criteria under Title C of the Resource Conservation and Recovery Act;
-- a notice of modifications to RCRA rules associated with solvent-contaminated industrial wipes;
-- a proposed rule exempting milk containers and associated piping under the oil spill prevention program;
-- a proposed rule setting effluent limitation guidelines and standards for airport deicing operations.

The proposals for mandatory reporting of greenhouse gas emissions and for implementing the renewable fuels standard were well past the deadlines set by Congress for their release. The renewable fuels proposal was delayed by industry concerns about an analysis in the proposal of the life-cycle greenhouse gas emissions that result from production of ethanol and other biofuels. To qualify as a renewable fuel under the renewable fuels standard, Congress said a biofuel must result in at least 20 percent less greenhouse gas emissions than gasoline. EPA previously indicated it will count indirect emissions that would result from land-use changes caused by using food crops to produce biofuels. The ethanol industry objects to indirect land-use change analysis, saying that the methodology is not well-developed.

Comments: The Notice of Proposed Rulemaking for the RFS2, by being withdrawn, will have to be re-issued to OMB for review and Federal Register publication at a later date restarting the regulatory review process. The RFS2 covers a change to the definition of biofuels (to include greenhouse gas reductions) and the determination of which fuels fit into four categories – 1) cellulosic biofuel, 2) advanced biofuel, 3) biomass-based diesel and 4) total renewable fuel.

I will continue to seek EPA answers to the following:

Why would you not allow 2-4 percent more ethanol in a gallon of gasoline if:

a) it does not harm the engine
b) it will sometimes be cheaper than gasoline (determined by the market)
c) would help the ethanol industry run at a higher rate of capacity than the current 80 percent rate
d) would help the ethanol industry create a profit and add to the tax revenues – lower the budget deficit
e) help employ more people in that industry and the blending industry

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


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