Scaled-back renewable-fuels targets leaked from the Environmental Protection Agency are still excessive, the American Petroleum Institute said in a Thursday press call. EPA is "moving in the right direction" with the reductions, said Bob Greco, API's director of downstream activities, but still "needs to go lower."
API's goals aren't far from the new EPA standards, which remain preliminary and have not been verified. The group is calling for production mandates of 12.9 million gallons of corn ethanol; the EPA draft circulated earlier this month would set levels at 13 million gallons. "The concern is they're trying to shave this so close," Greco said. "We don't think the EPA has gone far enough if the leaked proposal is accurate."
The problem, according to API, is that biofuel mandates were set with assumptions that gasoline demand would continue to increase, which has not been the case. Greco cited a study that said too-high ethanol mandates would decrease U.S. GDP by $770 billion and take-home pay by $580 billion. Continued hikes in the production mandate, Greco said, would push the U.S. past the "blend wall"--the 10 percent of ethanol content currently the standard for most cars' fuel. "Passing the blend wall would cause a ... fuel-cost increase and fuel-supply disruptions," he said. "We need the EPA to act immediately to provide relief to consumers."
Even if the agency's lowered proposals end up as the final targets, Greco said it will not affect API's lawsuits challenging EPA's mandates. He reiterated that the group is still prepared to file suit if the agency fails to meet a Nov. 30 deadline for next year's mandates.