Heating Oil News
House members ask EPA to relax renewable fuel mandate
October 31, 2013
More than 160 lawmakers on Thursday pleaded with the Obama administration to relax renewable fuel quotas they say “threaten to cause economic and environmental harm.”
The bipartisan group of House members, led by Rep. Bob Goodlatte, R-Va., insisted that the Environmental Protection Agency must lower 2014 renewable fuel requirements to tame a volatile market for biofuel credits and keep prices down for corn, which is used to make the bulk of U.S. ethanol fulfilling the mandates today. Advanced biofuels made from algae and other non-edible material have been slower to commercialize.
“The U.S. corn market has been increasingly volatile since the expansion of the renewable fuel standard in 2007,” the lawmakers told EPA Administrator Gina McCarthy. “Ethanol now consumes more corn than animal agriculture, a fact directly attributable to the federal mandate.”
Lawmakers in Congress have introduced a host of bills that aim to revamp the 8-year-old renewable fuel standard, ranging from modest changes to all-out repeal.
Goodlatte has sponsored a full repeal bill, and has introduced separate legislation that would eliminate an “advanced biofuels” category in the fuel standard and decrease the amount of the alternative fuels required through 2022. That measure also effectively would reverse the Environmental Protection Agency’s decision to allow 15 percent ethanol blends in the marketplace.
Renewable fuel supporters said the lawmakers’ letter was misguided. Bob Dinneen, CEO of the Renewable Fuels Association, said the missive was in line with what he called oil industry scare tactics over the mandates.
Growth Energy said that the lawmakers who sent the letter were really out for “cheap corn,” with prices below the cost of production “at the expense of American farmers, American energy security, consumer choice and savings at the pump.”
“Despite false claims that biofuels are increasing the cost of corn, those who signed this letter failed to review the facts and recognize that just yesterday corn was trading at a 37 month low,” said Growth Energy CEO Tom Buis.
A widely circulated draft of the still-to-be-proposed renewable volume requirements for 2014 would slash requirements from statutory levels. The leaked draft proposal would set the requirements for corn-based ethanol at 13 billion gallons, while lowering quotas for advanced biofuels and other categories.
But the oil industry — led by the American Petroleum Institute and the American Fuel and Petrochemical Manufacturers — is asking next year’s number be set no higher than 12.9 billion gallons, which would represent about 9.7 percent of of the nation’s projected gasoline demand. Greco said that levels essential to preserve the availability of zero-ethanol gasoline for some consumers, while avoiding the blend wall, a point where the required renewable volumes force refiners to mix in more ethanol than has been approved for use in all cars and trucks.
