Biofuel industry reacts to API, AFPM letter to EPA

By Erin Voegele | May 08, 2015

A group of 10 biofuel trade associations and companies recently sent a letter to U.S. EPA Administrator Gina McCarthy in response to a May 1 letter issued by the American Petroleum Institute and American Fuel & Petrochemical Manufacturers.

“Despite the legal maladies and mischaracterizations in the API/AFPM letter, it effectively highlights the choice before you: you must either choose to reward the oil industry for refusing to fulfill its obligations under the law, or choose to get the renewable fuel standard (RFS) back on track by proposing renewable volume obligation (RVO) levels that comport with the spirit and intent of the law,” said the biofuel groups in the letter.

According to the biofuel industry, the API/AFPM letter confirms that the methodology used by EPA to set its proposed 2014 RFOs caters to the whims of the oil industry. The API/AFPM letter also encourages the agency to use the same methodology to establish future RVOs.

“The methodology used by EPA for its 2014 RVO proposal ultimately rewards the intransigence of oil refiners toward investing in renewable fuels infrastructure, protects their market share, and thus prevents increasing volumes of cleaner and more sustainable renewable fuels from entering the marketplace. Adopting the same methodology for RVOs in 2015 and beyond would continue to reward oil companies for their stubborn refusal to follow the spirit and intent of the expanded RFS adopted by congress as part of the 2007 Energy Independence and Security Act (EISA),” said the biofuel groups in the letter.

The biofuel groups also point out that while the API and AFPM refer to the 2014 RVO as a “reasonable approach,” the overlook its obvious legal infirmities. While the Clean Air Act clearly specifies that to grant a waiver, EPA must determine that “…implementation of the requirement would severely harm the economy or environment of a State, a region, or the United States,” or determine that “…there is an inadequate domestic supply” of renewable fuel to meet required blending levels. The biofuel groups stress that the term “inadequate domestic supply” does not apply to constraints on the ability to distribute required volumes.

“The supposed lack of infrastructure to distribute larger volumes of ethanol above and beyond the ‘blend wall’ is not a circumstance that EPA may take into consideration when evaluating whether a waiver is justified. In fact, the escalating volume requirements of the RFS were meant to drive investment in the installation of new infrastructure that will enable larger quantities of renewable fuels to be distributed to consumers,” said the biofuel groups.

The letter issued by the biofuel groups also disputes API/AFPM claims regarding the E10 blend wall, pointing out that E85 and E15 could easily overcome those constraints.

“The RFS program was designed to force the oil industry to change the status quo—not to perpetuate it. The entire purpose of this program would be subverted if the oil industry is rewarded for its failure to take the steps necessary—steps it has known about since 2007—to ensure that it is capable of distributing, blending, and dispensing the renewable fuel volumes required under the statute. We believe EPA faces a critically important choice with its expected upcoming 2014-2016 RVO proposals: get the RFS back on track by proposing RVOs that comport with statutory requirements and EPA’s legal waiver authority, or further reward the oil industry by embracing its preferred ‘blend wall’ methodology as outlined in the API/AFPM letter. We implore you to choose wisely,” concludes the letter.

The document was signed by Abengoa Bioenergy, AEM, Novozymes, the Renewable Fuels Association, the American Coalition for Ethanol, the Biotechnology Industry Organization, the National Corn Growers Association, the Advanced Ethanol Council, Growth Energy and Poet.