Reactions to EPA RFS Announcements

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It did not take long for reaction to come after EPA on Wednesday released its proposed Renewable Fuel Standard (RFS) volume obligations. Ag- and biofuel-related groups’ reactions were expected as long as EPA did not get the mandate amounts back to “mandated” levels, which they did not. Oil industry-related responses can almost be written by memory. But within the reactions there were some nuggets of perspective. Of note is who did not comment. This includes House Ag Chairman Mike Conaway (R-Texas). When we checked with his office we were told, “We are not planning on a comment.” Hmm. Here are some comments from those making statements:

POET CEO Jeff Broin. “While the proposed numbers from EPA are trending in the right direction, they once again fail to acknowledge the existing capabilities of the biofuels industry and fuel retailers in meeting the goals of the Renewable Fuel Standard. Congress called for 15 billion gallons of ethanol from corn starting in 2016. The industry is capable of meeting that goal not just in 2017 but right now, today. Similarly, the infrastructure exists to get these clean fuels to market. The EPA is preventing this industry from meeting its potential and endangering the expansion of cellulosic ethanol. EPA’s core mission is to protect public health and the environment. Today, with this proposed rule, it has failed that mission. Biofuels replace cancer-causing agents in gasoline and reduce greenhouse gas emissions. The only way to expand these benefits is to allow the market to grow. Consumers deserve the right to choose higher blends of biofuels like ethanol at the pump. The EPA must amend these numbers to reflect the full volume for corn ethanol use laid out in statute.”

Renewable Fuels Assn. (RFA). “The agency continues to cater to the oil industry by relying upon an illegal interpretation of its waiver authority and concern over a blend wall that the oil industry itself is creating,” Bob Dinneen, head of the RFA said. “As a consequence, consumers are being denied higher octane, lower cost renewable fuels. Investments in new technology and advanced biofuels will continue to languish and greenhouse gas emissions from automobiles will be unnecessarily higher.” Dinneen’s group is suing the EPA over quotas it set for 2014, 2015 and 2016.

Emily Skor, CEO of Growth Energy, a coalition supporting ethanol, said she was “encouraged” the EPA had increased the levels from previous years, but added that “it still falls short” of the statutory target and of what the industry can do.

Brooke Coleman, executive director of the Advanced Biofuels Business Council, said the proposed targets don’t live up to the goals of the Renewable Fuel Standard: to drive the commercialization and use of low-carbon alternatives on US roads. “If the administration wants our industry to be aggressive when it comes to financing and commercializing low carbon fuels in the United States, as they have asked us to do, they need to hold up their end of the bargain and make some critical adjustments to the RFS final rule,” Coleman said.

“Consumers’ interest should come ahead of ethanol interests,” said Frank Macchiarola, director of the American Petroleum Institute’s downstream group. “EPA is pushing consumers to use high ethanol blends they don’t want and that are not compatible with most cars on the road today. The administration is potentially putting the safety of American consumers, their vehicles and our economy at risk.” Under the EPA’s proposal, refiners would be forced to blend 4 billion gallons of advanced biofuels next year, including 312 million gallons of cellulosic ethanol and 2 billion gallons of biomass-based diesel.

Sen. Chuck Grassley (R-Iowa). “The proposed level is a positive step but still short of the level set by Congress. I worry that the EPA continues to rely too much on arguments from Big Oil that distribution infrastructure is lacking as a reason to set a target that’s lower than it should be. Congress explicitly rejected distribution infrastructure as a reason to justify lower blending targets. The EPA needs to pay attention to that fact. Under-estimating biofuels does a disservice to the producers who put in extra effort every day to give Americans more diversity at the pump. These producers also are working to develop the next generation of biofuels. Policy ought to encourage innovation and investment so fuel diversity will continue moving forward. The EPA is taking public comment on the proposed rule. I hope biofuels producers and consumers from Iowa and elsewhere will weigh in.”

House Ag Committee Ranking Member Collin Peterson (D-Minn.). “While the higher targets move in the right direction, the numbers don’t reflect the potential that exists for biofuels use and production in the United States. Following the numbers in the law would ensure a strong biofuels industry, which would have a positive impact on the rural economy, and advancements in the next generation of domestic biofuels.”

American Soybean Association (ASA) President Richard Wilkins. “The EPA Proposed Rule misses an opportunity to build on the success and benefits of this growing renewable domestic biodiesel industry.” He added that, “While our differences with EPA regarding the appropriate biomass-based diesel volumes are relatively small, we are frustrated that the Administration does not embrace the many benefits this industry provides and take better advantage of these opportunities.”

National Corn Growers Association (NCGA) President Chip Bowling. “EPA has moved in a better direction, but we are disappointed that they set the ethanol number below statute. The Renewable Fuel Standard (RFS) is working for America. It has made our air cleaner. It has spurred investment in rural communities and created high-tech jobs. It has given drivers more choices at the gas pump. And it has reduced our dependency on foreign oil. Any reduction in the statutory amount takes America backward – destabilizing our environment, our economy, and our energy security. In the past, the EPA has cited a lack of fuel infrastructure as one reason for failing to follow statute. Our corn farmers and the ethanol industry have responded. Over the past year, we’ve invested millions of dollars along with USDA’s Biofuel Infrastructure Partnership (BIP) to accelerate public and private investment in new ethanol pumps and fuel infrastructure. The fact is, today’s driver has more access than ever to renewable fuel choices.”

Iowa Renewable Fuels Assn. “Today’s proposal represents yet another missed opportunity for consumers, energy security and rural America,” said Monte Shaw, executive director for the Iowa Renewable Fuels Association. He said the EPA’s proposal of ethanol from corn for 2017 “doesn’t match the current reality of the nation’s fuel sector.” Shaw said low fuel prices have spurred consumers to drive more, and with a growing number of fueling stations offering fuel with more than 10% ethanol, the EPA should require 15 billion gallons of ethanol to be made from corn, as required by Congress, rather than 14.8 billion.

Americans for Energy Security and Innovation (AESI) Chairman Jim Talent. “The Obama Administration’s proposed targets fall short of the goals for energy security that Congress outlined in the Renewable Fuel Standard. America’s domestic biofuels industry has already proven that it can surpass these targets, and our goal should be to maximize the renewable choices that consumers have at the pump. The EPA is moving in a positive direction, but we are leaving homegrown energy on the table, and that means more money and influence will flow to the foreign nations that seek to manipulate the global oil market.”

The National Biodiesel Board expressed disappointment the EPA gave biodiesel only a slight bump from 1.9 billion gallons in 2016 to 2 billion in 2017 and 2.1 billion in 2018. NBB Vice President of Federal Affairs Anne Steckel said without stronger growth in the final rule the Obama administration would be missing an opportunity to reduce carbon emissions while helping to reshape America’s transportation sector. “We appreciate the EPA’s timeliness in releasing these volumes and its support for growing biodiesel use under the RFS, but this proposal significantly understates the amount of biodiesel this industry can sustainably deliver to the market,” Steckel said in a news release statement. “We have plenty of feedstock and production capacity to exceed 2.5 billion gallons today and can certainly do so in 2018.”

The Biotechnology Innovation Organization, or BIO, said in a news release the proposal “fails to put the program fully back on track.”

American Fuel & Petrochemical Manufacturers (AFPM) President Chet Thompson. “While we support the Environmental Protection Agency’s (EPA) continuing use of its statutory waiver authority to reduce the unrealistic mandated biofuel volumes for 2017, the proposed volumes still go beyond marketplace realities. EPA’s proposal threatens to force consumers to use more biofuel than vehicles, engines and fueling infrastructure can handle. This proposal provides more evidence that Congress should finally step in and repeal or significantly reform this broken program.”

Iowa Biodiesel Board (IBB) Executive Director Grant Kimberley. “We commend EPA for releasing their proposed biomass-based diesel volumes in a timely manner. But as the top biodiesel-producing state, those of us in Iowa know that the biodiesel industry can achieve much more significant growth in 2018 than what EPA currently calls for in this proposal. Nationally, our industry already has the feedstock and the production capacity to reach 2.5 billion gallons in a sustainable manner, and we’re disappointed this proposal is quite far from that industry recommendation. The proposed number, 2.1 billion gallons, is still too low, especially since we are facing biodiesel imports, some of which have the benefit of foreign subsidies.”

House Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.). “While I appreciate the fact that EPA is on track to finish its rule by the deadline, I remain concerned about other aspects of this proposal, we owe it to everyone affected – from corn and soybean growers to ethanol and biodiesel producers to refiners and gas station owners, and most importantly to consumers – to strike the right balance, and we will take a close look at the proposal to see if this was achieved.”

House Energy and Commerce Committee Chairman Fred Upton (R-Mich.). “The energy sector has evolved in ways that were not predicted when the RFS was last revised in 2007. We will continue our ongoing oversight of the RFS and EPA’s proposed rule in the months ahead.”

House Environment and the Economy Subcommittee Chairman John Shimkus (R-Ill.). “It’s time to start looking at how the RFS program can be updated and extended to better reflect an evolving energy landscape,” said Shimkus. “I’m eager for that debate and I look forward to further reviewing EPA’s proposed requirements for 2017.”

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