The US Environmental Protection Agency (EPA) has officially put forward its proposals for next year’s levels of renewable fuels to be blended into gasoline and diesel. The standards address annual volume requirements of renewable fuels in all automotive gasoline and diesel produced or imported in the US in 2014. They are required under the Energy Independence and Security Act of 2007.
The proposed standards are developed with input from the US Department of Energy and US Department of Agriculture and are now open for public comment. The EPA has presented its proposal as a middle ground option, which still seeks to keep the “Renewable Fuel Standard (RFS) programme on a steady path forward – ensuring the continued long-term growth of the renewable fuel industry” but still taking into account concerns about the ‘E10 blend wall’.
“Biofuels are a key part of the Obama Administration’s “all of the above” energy strategy, helping to reduce our dependence on foreign oil, cut carbon pollution and create jobs,” said EPA Administrator Gina McCarthy. “We have made great progress in recent years, and EPA continues to support the RFS goal of increasing biofuel production and use. We look forward to working with all stakeholders to develop a final rule that maintains the strength and promise of the RFS programme.”
Proposals
For overall renewable biofuel use, the EPA is looking at a range of 15 billion-15.52 billion gallons next year, with a specific proposal of 15.21 billion gallons. This would mark a considerable drop from this year’s 16.55 billion gallons, as well as the original 18.15 billion gallons targeted originally in the Clean Air Act.
For cellulosic biofuel, the EPA is looking within a very wide range of 8 million-30 million gallons, with a target of 17 million. This falls far behind the targeted 1.75 billion in the Clean Air Act but would mark a rise from the 6 million gallons called for in 2013 targets.
For advanced biofuel, the 2014 range has been lowered to 2.0 billion-2.51 billion gallons, with a target of 2.2 billion gallons.
Blend wall
The move to lower the targeted standards for renewable fuels comes in part from the ‘E10 blend wall’, which refers to the situation at which the E10 fuel pool is saturated with ethanol. By now, almost all gasoline on sale in the US is E10 (fuel with up to 10% ethanol). The EPA explains that while production of renewable fuels has been growing rapidly, improvements in vehicle fuel economy and other economic factors have led to much lower gasoline consumption than what was expected when Congress passed the Renewable Fuel Standard in 2007. “If gasoline demand continues to decline, as currently forecast, continuing growth in the use of ethanol will require greater use of higher ethanol blends such as E15 and E85,” it cautions.
The use of E15 and E85 has been controversial. In 2010, the EPA approved the increased use of ethanol in ethanol-gasoline blends to 15% (E15) for certain vehicles, marking the first change in 30 years. E15 approval was later extended to older models as well, and the blend is now permitted in model year 2001 and newer cars, and light trucks. In late 2010, the Engine Products Group (which includes the Alliance of Automobile Manufacturers) filed a petition against the decision on the grounds that the higher blend could cause mechanical problems. The Coordinating Research Council (CRC) published a report that claims E15 use in 2001 and later car models can cause serious damage to the vehicles. The American Petroleum Institute (API) has repeatedly spoken against it and called for an appeal, describing the EPA’s decision to allow the use of E15 as “irresponsible”.
The EPA has been working to address concerns, and says it is keen to hear proposals regarding additional actions that could help “overcome current market challenges, and to minimise the need for adjustments in the statutory renewable fuel volume requirements in the future.”
Reactions
As always, many groups feel the EPA has gone too far in its reduction of targeted renewable fuel levels, while others are disappointed it didn’t make more dramatic cuts. Two leading oil and gas trade groups had requested the overall 2014 renewable fuel use target drop to 14.8 billion.
On the other hand, the Fuels America coalition of alternative energy suppliers claims the proposal “reflects an ‘all of the above, except biofuels’ energy strategy.” In a letter to President Obama, the agency objected that lowering the RFS standard “would reward the oil companies for refusing to comply with the programme” and would mark “a step backwards that will harm the environment and the economy.” It warns that the move would increase the price of gasoline as lower cost ethanol moves out of the gasoline supply, increase unemployment as renewable fuel producers employing hundreds of thousands of workers cut back, destabilise rural economies just as farmers are expecting a near-record corn crop, and even “surpass the boundaries of the law which offers EPA ample flexibility in administering the programme.”
The Biotechnology Industry Organization (BIO) has responded with a warning that the latest proposal could have a detrimental effect on biofuel research. “The research and development catalysed by this programme [the RFS] has given birth to biotech innovations for renewable chemicals and other biobased products. The current proposal would have the effect of closing the market to renewable fuels and undermining the investment community’s confidence in the programme, starving advanced biofuel and biotech companies of the capital they need to successfully commercialise new and innovative technologies.” It goes on to note that the latest proposal “turns the logic of the RFS on its head and could significantly chill investments in advanced biofuels projects. We will focus over the immediate comment period on convincing the administration to right the course on this policy.”
So will players from both sides in the argument. Once the proposal is published in the Federal Register, it will be open to a 60-day public comment period.
Megan Lampinen
