EPA holds hearing on REGS rule

By Erin Voegele | December 06, 2016

On Dec. 6, the U.S. EPA held a hearing on its proposed Renewables Enhancement and Growth Support rule in Chicago. Growth Energy and the Renewable Fuels Association were among the organizations that testified at the event.

The EPA first released the proposed rule on Oct. 3. According to the agency, the proposal aims to enhance the renewable fuel standard (RFS) program and related fuel regulations to support the growth of ethanol and other renewable fuels.

The proposal includes an updated regulatory structure to allow biofuels producers to partially process feedstock at one facility and convert the resulting material into fuels at another using existing pathways. It also updates fuel regulations to allow expanded availability of high-ethanol fuel blends for use in flex fuel vehicles (FFVs) and includes new feedstock approvals for cellulosic biofuels produced from short-rotation poplar and willow, cellulosic diesel produced from compressing of cellulosic feedstocks and petroleum, and renewable diesel and biodiesel produced from non-cellulosic portions of separated food waste. In addition, the EPA said it is seeking comments on a variety of other issues, including renewable identification number (RIN) generation for renewable electricity used as transportation fuel and requirements for facilities that could use carbon capture and storage (CCS) to reduce carbon in the production of renewable fuels in the future.

Testimony offered by Geoff Cooper, senior vice president of the RFA, focused primarily on strengthening ethanol flex-fuel (EFF) provisions, telling EPA officials that the recommendations are intended to boost flexibility and allow “EFF producers, distributors, and consumers to capitalize on economic efficiencies in the marketplace.”

Cooper noted that the RFA supports increasing the sulfur limit for certified natural gasoline to 30 ppm. “Along with EPA’s proposal to limit natural gasoline content to 32 percent of the finished EFF blend, this would ensure the finished fuel does not exceed 10 ppm sulfur,” he stated.

Cooper also stressed the RFA’s opposition to EPA’s plan to establish a quality survey program (stemming from the industry’s negative experience with the E15 fuel survey) that would collect and analyze EFF samples as the costs for implementing such a program would outbalance the benefits.

“As the E15 survey has demonstrated, the costs of such programs often outweigh the benefits and the program scope can quickly expand beyond its intended purpose,” he said. “As an alternative to physical sampling, EPA’s proposal discusses a survey arrangement in which the independent surveyor reviews PTDs to ensure that EFF bulk blender-refiners and blender pump-refiners used appropriate parent blendstocks to make EFF. This alternative is certainly preferable to physical sampling, and we agree with EPA that it would greatly reduce the cost of compliance assurance.”

The RFA agrees with EPA that it is unreasonable to subject E15 retailers to the registration, reporting and batch testing requirements that apply to gasoline producers, Cooper testified. He noted the importance of the proposal in highlighting the different volatility treatment between E10 and E15, and pushed the EPA to take action to resolve the issue.

“RFA first encouraged EPA to level the playing field for the RVP of E10 and E15 in 2010, when we formally requested that EPA use its administrative authority to simply apply the 1.0 psi RVP waiver for E10 to E15 as well … We understand the REGS rulemaking process is not intended to address RVP standards for E15, but it does accentuate the importance of resolving this barrier. We again strongly encourage EPA to take immediate action separately to either limit the RVP of conventional gasoline to 8.0 psi in the summertime, or extend the 1.0 psi waiver to E15.”

Chris Bliley, director of regulatory affairs for Growth Energy, outlined his organization’s concern over the impact of the REGS rule on the development market for E15. Specifically, Bliley noted, “While we certainly appreciate and support the regulatory clarity and vapor pressure relief for ethanol flex fuels, we are concerned about the impact of this proposal on the developing market for E15. While the proposal doesn’t directly address E15, it would isolate E15 as the only ethanol-blended fuel that does not receive Reid Vapor Pressure (RVP) relief in conventional areas. This would deny retailers and consumers the choice of cleaner, less-expensive E15 in a large portion of the country during the height of the summer driving season. It is imperative that E15 be given the same RVP treatment as regular E10 gasoline because of its benefit to our nation’s air quality. Without relief, nearly 1,000 retailers will be forced to change their fuel blend to 16 percent ethanol and limit their sale to flex fuel vehicles, which represent a mere 8 percent of the total auto fleet, from June 1 to September 15 in conventional gasoline markets.”

Bliley also raised concerns about the limitations for natural gasoline used for flex fuel blending, explaining, “As proposed, the limits would likely force the use of other refined, hydrocarbon blendstocks and ultimately impose additional costs on the consumers of midlevel ethanol blends and E85.”

In addition, Bliley discussed Growth Energy’s support of the use of biointermediates and new pathways to help develop cellulosic biofuels. He concluded by reiterating the importance of the Renewable Fuel Standard (RFS) stating, “The RFS injects competition and consumer choice into the vehicle fuels marketplace. It is moving America forward. With more and more retailers moving toward E15, and the USDA investments through the Biofuels Infrastructure Partnership, now is exactly the wrong time to orphan E15 as the only fuel that cannot be sold consistently year-round.”

Those who wish to weigh in on the proposed rule are able to submit written comments through Jan. 17. Comments can be filed electronically at www.regulations.gov under Docket ID No. EPA-HQ-OAR-2016-0041. A PDF of the proposed rule, which spans more than a 150 pages, can be downloaded from the Federal Register website.