WASHINGTON -- Citing the controversy around setting volume standards in light of gasoline demand, the U.S. Environmental Protection Agency (EPA) announced on November 21 that it would delay finalizing the 2014 mandated volumes for using renewable fuels under the Renewable Fuel Standard (RFS) until sometime next year.
In November 2013, EPA had proposed an 8% cut in the mandated renewable fuels volume for 2014 compared to the 2013 volume. The proposal set off a storm of protest from the biofuels industry, which worried that the lower mandated volumes would remove the impetus to develop alternatives to fossil fuels. The oil industry supported the cut, arguing that the fuels market could not absorb the greater volumes originally proposed under the RFS.
As reported in a 21st Century Smoke/CSP Daily News Flash, in its notice of delay in issuing the 2014 RFS standards, the EPA cited the enormous number of comments and controversy specifically related to how renewable volumes should be set considering lower gasoline consumption than had been forecast at the time that the Energy Independence & Security Act--which expanded the RFS--was enacted in 2007, and whether and how the statutory volumes should be waived.
These included concerns regarding the proposal's ability to ensure continued progress towards achieving the volumes of renewable fuel targeted by the statute, specifically for cellulosic-based ethanol.
Citing the huge delay in finalizing the 2014 standards rule and the issues raised by commenters, the EPA said it was is not in a position to finalize the 2014 RFS standards rule before the end of the year.
"Accordingly, we intend to take action on the 2014 standards rule in 2015 prior to or in conjunction with action on the 2015 standards rule," the notice stated.
Click here to view the full EPA notice.
American Petroleum Institute (API) president and CEO Jack Gerard said the administration's decision to "punt" on this year's RFS standards is a clear demonstration to Congress that the RFS has become completely unworkable and must be repealed.
"The rule is already a year overdue and the administration has no intention of finalizing this year's requirements before the year ends," Gerard said. "It is unacceptable to expect refiners to provide the fuels Americans need with so much regulatory uncertainty. This is an example of government at its worst."
He continued, "The [RFS] was flawed from the beginning, horribly mismanaged, and is now broken. The only real solution is for Congress to scrap the program and let consumers, not the federal government, choose the best fuel to put in their tanks."
American Fuel & Petrochemical Manufacturers (AFPM) president Charles T. Drevna said, "The Obama administration's decision … is a gross dereliction of responsibility that leaves fuel refiners and the biofuels industry alike to navigate a course of ambiguity. Today's announcement indicates that the administration plans to continuously mismanage this program in a manner that equates to playing Russian roulette with the nation's fuel supply at the American consumer's ultimate expense. The administration's inaction demonstrates once again that the non-functioning [RFS] program is irreparably broken. AFPM calls upon Congress to expeditiously resume work on repealing or significantly reforming the RFS."
AFPM said it will seek legal intervention.
"For three years in a row, the administration has thumbed its nose at Congress and ignored a crystal-clear statutory deadline. … For this reason, AFPM today filed a notice of intent to sue EPA over its failure to issue the 2014 RFS regulations, which has languished at the White House Office of Management & Budget since August 22, 2014."
Michael McAdams, president of the Advanced Biofuels Association (ABFA), however, said, "Today, EPA hit the big reset button. Given the fact that we are already at the end of 2014, we appreciate EPA's recognition that the real importance is to set the program on a clear glide path for 2015 and 2016. The numbers do matter, and utilizing the actual production will be a positive step from what was a proposed. We appreciate how EPA recognized that cutting requirements for advanced biofuels would be a mistake. This emerging industry deserves better considering it has already demonstrated the capacity to generate 3.2 billion gallons of advanced biofuel annually. But, at least EPA's decision leaves the glass more than half full and allow us to get back on track next year."
He added, "We are hopeful that this resets the bar to allow EPA to release 2015 numbers as quickly as possible and give certainty to the program. It has been the uncertainty that has created issues for the advanced and cellulosic sectors to move forward."
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