Petroleum Group Says Renewable-Fuel-Standard Revisions Inadequate

Corn ethanol mandates are an area of dispute over the Renewable Fuel Standard.
National Journal
Alex Brown
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Alex Brown
Oct. 24, 2013, 8:26 a.m.

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.

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