EPA forced to release RFS levels

Consent decree with oil industry requires EPA to release biofuels blending levels by June 1 and final by Nov. 30.

If you can’t get the government to do what you want, just take them to court. At least that’s what seems to have worked when the oil industry filed a lawsuit against the Environmental Protection Agency over its long delay on releasing renewable fuel blending levels required under the Renewable Fuel Standard.

Friday the EPA announced that it had reached a consent degree with the American Petroleum Institute and Fuel & Petrochemical Manufacturers.

To say the EPA has dragged its feet on the matter really is an understatement. And as I mentioned in this blog post EPA puts the RFS in jeopardy, the actions have done great harm to a law Congress wanted to use as an incentive to drive more use of biofuels.

Under the agreement, EPA pledges to propose the 2015 RFS mandate by June 1, 2015, and to finalize the 2014 and 2015 RFS mandates by November 30, 2015. It will also re-propose volume requirements for 2014, by June 1, than reflect the volumes of renewable fuel that were actually used in 2014.

Should the EPA stick to its new November 30, 2015 deadline to finalize renewable volume obligations (RVOs), it will be almost two years late on its 2014 deadline to propose acceptable ethanol RVOs – and nearly one year late for 2015. Biodiesel volumes are now even further behind schedule, and will be a full three years late if the November timeline is maintained.

A statement from Sen. Heidi Heitkamp , D-N.D.,  said the announcement was “another punch in the gut for biodiesel workers in North Dakota and throughout the country, proposing a timeline that’s both unhelpful and out of touch with reality.”

Clearly, ongoing questions will remain as to the volume levels proposed by EPA but EPA has reiterated that it will "re-propose volume requirements for 2014, by June 1, that reflect the volumes of renewable fuel that were actually used in 2014.” 

The volumes for Biomass-based Diesel in 2014 were approximately 1.75 billion gallons so EPA reaffirming its commitment to “actual use” appears to be a step in the right direction, said a statement from the National Biodiesel Board.

From the perspective of corn-based ethanol, recent crop sizes have been sufficiently adequate to meet corn ethanol blending needs without hitting livestock producers with lofty prices.

According to the Renewable Fuels Association, the industry produced 14.34 billion gallons of fuel ethanol in 2014. At the start of this year, there were 213 ethanol plants with a listed annual capacity of 15.1 billion gallons.
 

The market has truly taken a hit because of the delay in EPA’s decision and brought with it more uncertainty. The question will be whether EPA can not only right it’s wrong in the previously proposed levels which were out of touch with reality and the authority given under the law, and set levels as Congress intended.

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