API, AFPM, WSPA Suing Over EPA's Biofuels Mandate

"Someday cellulosic fuel may be available ... but today the fuel doesn't exist"

WASHINGTON -- The American Petroleum Institute (API) has filed a lawsuit with the Washington, D.C., Circuit Court challenging the U.S. Environmental Protection Agency's (EPA's) mandated use of nonexistent cellulosic biofuels in the 2011 Renewable Fuel Standard (RFS).

The American Fuel & Petrochemical Manufacturers (AFPM) and the Western States Petroleum Association (WSPA) filed a lawsuit in June challenging the EPA's decision to require refiners to blend cellulosic ethanol or pay the agency for waiver credits due to the inability to blend these nonexistent fuels under the federal RFS.

"EPA's unattainable and absurd mandate forces refiners to pay a penalty for failing to use biofuels that don't even exist," said API director of downstream and industry operations Bob Greco. "The mandate is effectively an added tax on gasoline manufacturers that could ultimately burden consumers."

The Clean Air Act requires EPA to determine the mandated volume of cellulosic biofuels each year at "the projected volume available." There was no commercial supply of the fuel in 2011, according to EPA's own records; however, EPA required refiners and importers of gasoline and diesel to use or pay for credits to cover 6.6 million gallons of the nonexistent biofuels.

"EPA is directed to set the fuel requirement at a realistic volume but the agency continues to mandate the use of biofuels that do not exist," Greco said.

EPA denied API's 2011 petition for reconsideration of the mandate in May and continues to mandate the nonexistent biofuels this year at even higher levels. API filed a similar court challenge against EPA's unattainable 2012 cellulosic biofuels requirements in March.

API said that it supports a realistic and workable RFS and continues to recommend that EPA base its prediction on at least two months of actual cellulosic biofuel production in the current year when establishing the mandated volumes for the following year. This approach would provide a more realistic assessment of potential future production rather than simply relying on the assertions of companies whose ability to produce the cellulosic biofuel volumes EPA hopes for is questionable, it said.

"Congress gave EPA authority to waive RFS requirements when there is an inadequate supply of domestic biofuel. If EPA isn't going to exercise this authority in a year when zero gallons were produced and available, when would EPA use this waiver provision?" said AFPM general counsel Rich Moskowitz. "EPA's waiver denial is contrary to Congress' intent and forces refiners to purchase credits from EPA for cellulosic fuels that are not commercially available and amounts to a hidden fuel tax on consumers."

AFPM president Charles T. Drevna said, "Someday cellulosic fuel may be available and may even be cost-effective, but today the fuel doesn't exist. EPA's denial of this waiver request is in poor judgment and a perfect example of the agency's continuing war on fossil fuels. The requirement to blend cellulosic biofuels that do not currently exist--and will not be available in the immediate future--in any form that satisfies EPA's phantom fuel requirements, let alone the quantities mandated by the RFS program, is one of many examples of how the RFS is broken. Congress should repeal the RFS and embrace a more realistic approach to biofuels; American consumers deserve better from their government."