EPA sends biofuel mandates to White House

By Jennifer Dlouhy, Fuel FixThe White House is now reviewing the Environmental Protection Agency’s planned quotas for renewable fuels, a major milestone in the long path to setting this year’s biofuel mandates.For now, at least, the targets are under wraps, as the Office of Management and Budget conducts a final interagency review and gives refiners, biofuel producers and other stakeholders one last chance to weigh in on the mandates.Although the agency reviews can span 90 days, the final quotas appear likely to be issued sooner. Even under the most optimistic timetable — a late September release — the volume mandates would still be coming out nearly a year after the Nov. 30, 2013 deadline the EPA was supposed to meet under federal law.

A statute known as the “Renewable Fuel Standard” forces U.S. refiners to incorporate an annually increasing amount of biofuels into the nation’s diesel and gasoline supply but tasks the Environmental Protection Agency with setting each year’s specific volume obligations.

The EPA last year proposed slashing the amount of renewable fuel required for 2014 to 15.2 billion gallons, some 3 billion gallons below the amount prescribed in federal statutes. Under the EPA proposal, up to 13.01 billion gallons of the required renewable fuel could come from traditional corn-based ethanol with 2.2 billion gallons coming from advanced biofuels.

But Obama administration officials have hinted that the final number could climb, partly because gasoline consumption and the amount of vehicle miles driven have also risen since the proposal was unveiled last year. One floated target would raise the quota for ethanol, or conventional renewable fuel, to 13.6 billion gallons.The agency also could boost the overall target and hike the individual quotas for other categories, including cellulosic biofuels.Corn Belt lawmakers and biofuel producers have implored the Obama administration to reverse course from the original proposal and boost the quotas, which help deliver income to corn growers in the heartland.

Growth Energy CEO Tom Buis said in a statement that the proposed reduction “would be detrimental to the biofuels industry, the American consumer and our environment.” The final mandates should move “our nation forward on the adoption of renewable fuels, not backwards.”

Renewable Fuels Association President Bob Dinneen said the country’s commitment to greener, cleaner-burning transportation fuels was at stake.

“This decision is about more than targets and gallons, it is about a rationale that places highest importance on the long-term strength of this country and not the bottom line of oil companies,” Dinneen said in a statement.

Oil industry leaders and their allies on Capitol Hill say the EPA’s initial proposal still put refiners uncomfortably close to a “blend wall,” a point where they would be forced to mix a higher proportion of ethanol into fuel than the 10 percent approved for use in all cars and trucks.

They have called on Congress to repeal the renewable fuel standard, and while legislation to scrap the mandate or revamp it has stalled this election year, any significant quota boost could create new momentum on the issue.

Bob Greco, director of the American Petroleum Institute’s downstream group, urged the EPA to get to work on the 2015 renewable fuel proposal so that it can be finalized by the Nov. 30 deadline.

“Already more than eight months late, this year’s RFS requirements are the most delayed in the history of the program,” Greco said in a statement. “Further delays could harm consumers by driving up compliance costs and make it harder to produce the fuels Americans need.”