Oil Lobbying Group Sues EPA Over The Renewable Fuels Standard

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"Oil Lobbying Group Sues EPA Over The Renewable Fuels Standard"

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CREDIT: Petrobras

The American Petroleum Institute (API) sued the Environmental Protection Agency on Tuesday over a mandate that biofuels be mixed in with they country’s supply of traditional gasoline.

API is the oil and gas industry’s main lobbying group, and helped fund conservative outfits like the Koch-backed group Americans for Prosperity during the election season.

The EPA is mandating 1.28 billion gallons of biodiesel and 2.75 billion gallons of biofuel be mixed in for 2013 and is aiming for 36 billion to be mixed in by 2022. The goal of the standard is to reduce the United States’ dependence on foreign oil, and to make the country’s fuel a bit more environmentally friendly.

Due to the ongoing policy fight over the issue, the EPA released this year’s standard around eight or nine months late.

There’s also the issue of cellulosic biofuels, of which 6 million gallons is required under the larger advanced biofuels umbrella. Production of cellulosic biofuels hasn’t kept up with the mandate in the past, and API claims the new requirement is unworkable even though it represents a sharp reduction from the original proposed requirement of 14 million gallons.

For its part, The Renewable Fuels Association called the lawsuit a “frivolous” and “slavish” effort to “abuse the court system.” The group’s president, Bob Dinneen, said the renewable fuels standard “is working for farmers, gasoline marketers, and consumers. While the 2013 [levels] were issued later than anyone would have liked, the fact is the statute is crystal clear, and all stakeholders have been producing and blending at levels that will unquestionably meet the 2013 requirements.”

“This is a lawsuit in search of a problem.”

Harry Ng, API’s vice president and general counsel, slammed the EPA for “bad public policy” and for releasing the latest mandate nine months late. ““The 2013 mandates are an example of why EPA can’t be relied upon to implement the RFS effectively and in the interest of consumers,” Ng went on. “Ultimately, Congress must fully repeal this unworkable and costly mandate.”

So to no small extent, this is a policy brawl between two industries who see their products in mutually-exclusive competition.

Arguably, there is a technological limit to how much of a mix of biofuel American cars can take. It’s referred to as the “blend wall” and currently stands at about 10 percent. The problem is the legislation laying out the EPA’s mandate built its formula in terms of gallons instead of percentages, so now the required mix is threatening to overrun the blend wall. Conversely it can be argued that threat is a good thing, as it incentivizes technological advancement.

Finally, there’s the fact that traditional biofuels come from feedstocks that double as food, so increasing use reduces supply and drives up food prices. So when ethanol groups say there’s plenty of corn to meet the mandate, that’s not necessarily encouraging.

Cellulosic biofuels are aimed at getting around this problem, but they remain a work in progress.

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