EPA won’t finalize RFS’s 2014 biofuel quotas before yearend

The US Environmental Protection Agency announced it will not finalize 2014 biofuel quotas under the federal Renewable Fuel Standard (RFS) before yearend. The American Petroleum Institute and American Fuel & Petrochemical Manufacturers each said EPA’s Nov. 21 announcement demonstrates again that it’s time for Congress to repeal or dramatically reform the RFS.

“In light of this delay in issuing the 2014 RFS standards, the compliance demonstration deadline for the 2013 RFS standards will take place in 2015,” EPA said in its notice.

“EPA will be making modifications to the EPA-Moderated Transaction System (EMTS) to ensure that Renewable Identification Numbers (RINs) generated in 2012 are valid for demonstrating compliance with the 2013 applicable standard,” it said.

The quotas were established under the 2007 Energy Independence and Security Act. API and AFPM have each argued the standards are no longer appropriate because they were developed when domestic crude oil production was falling, imports were climbing, and US oil product demand was increasing.

Since then, production from US tight-oil shales, assisted by hydraulic fracturing and horizontal drilling, has reversed the US crude output decline and cut imports from foreign suppliers, the national trade associations have said. Automotive efficiency improvements and motorists’ conservation efforts during the 2008-09 recession dampened product demand, they added.

‘Government at its worst’

API Pres. Jack N. Gerard called EPA’s decision to punt on 2014’s RFS standards a clear demonstration to Congress that the RFS has become completely unworkable and must be repealed.

“The rule is already a year overdue and the administration has no intention of finalizing this year's requirements before the year ends,” he noted. “It is unacceptable to expect refiners to provide the fuels Americans need with so much regulatory uncertainty. This is an example of government at its worst.”

AFPM Pres. Charles T. Drevna said it was “a gross dereliction of responsibility that leaves fuel refiners and the biofuels industry alike to navigate a course of ambiguity.” He also called on Congress to expeditiously resume work on repealing or significantly reforming the RFS, but added that AFPM will seek legal intervention in the meantime.

“For 3 years in a row, the [Obama] Administration has thumbed its nose at Congress and ignored a crystal clear statutory deadline to issue Renewable Volume Obligations by Nov. 30 of the preceding year,” Drevna said. “For this reason, AFPM today filed a notice of intent to sue EPA over its failure to issue the 2014 RFS regulations, which have languished at the White House Office of Management and Budget since Aug. 22.”

Biofuel proponents also were not pleased. “Deciding not to decide is not a decision,” Renewable Fuels Association Pres. Bob Dineen said on Nov. 21. “Unfortunately, the announcement today perpetuates the uncertainty that has plagued the continued evolution of biofuels production and marketing for a year.

“Nevertheless, the administration has taken a major step by walking away from a proposed rule that was wrong on the law, wrong on the market impacts, wrong for innovation, and wrong for consumers,” he said.

“This administration says over and over that it supports biodiesel, yet its actions with these repeated delays are undermining the industry,” responded National Biodiesel Board Federal Affairs VP Anne Steckel. She called on the White House and EPA to finalize 2014 quotas as soon as possible, and “to move quickly on 2015 so that we don’t repeat this flawed process again next year.”

Contact Nick Snow at nicks@pennwell.com.

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