The Environmental Protection Agency’s proposed blending levels for the Renewable Fuel Standard would undercut necessary investment in advanced biofuels and undermine its climate change goals, a coalition of industry leaders told President Barack Obama on Wednesday.
In a letter, 23 executives from the advanced and cellulosic biofuels sector, including Abengoa, POET-DSM and Novozymes, warned Obama that the proposals for 2014, 2015 and 2016 run contrary to his climate legacy and would reward an oil industry that has chosen not to comply.
The Environmental Protection Agency’s Renewable Fuel Standard proposals for 2014, 2015 and 2016 hit the Federal Register this week, and a supporting document is helping to drive the ethanol industry’s calls for stronger blending requirements.
EPA’s proposals drew fire from all sides when they were unveiled two weeks ago. The ethanol industry said the blending targets were a handout to oil companies and refiners, because it acknowledged a 10-percent biofuel blend wall. Foes of the standard, however, charged that EPA set an unrealistic projection for biofuel growth in its 2016 proposal.
As the Environmental Protection Agency prepares to issue three years’ worth of proposed Renewable Fuel Standard volume levels, both sides of the debate are lobbying the Obama administration on what those proposals should look like. Biofuels groups called for an aggressive standard while oil and refining groups sought a reprieve from the current RFS blending trajectory.
In recent days, the industries have sent correspondence to the White House and EPA seeking to influence the volume requirements for 2014, 2015 and 2016, set to be proposed on June 1.
An industry group representing advanced and cellulosic fuel producers on Wednesday officially shifted its position on the Renewable Fuel Standard, calling for legislative reform to the program that mandates the blending of biofuels in transportation fuels.
The Advanced Biofuels Association's call for action won approval from opponents of the current RFS, who see it as giving a big boost to reform efforts. But supporters of the law said the proposals would only add more uncertainty to the biofuels industry.
The decision last week by the Obama administration to delay a final biofuels rule for 2014 is leading to conflict within the industry over the future of the program.
Mike McAdams, president of the Advanced Biofuels Association, on Tuesday renewed his call for Congress to write new legislation to reform the Renewable Fuel Standard, a stance that put him at odds with other biofuels groups.
He argued that the approach adopted by the Environmental Protection Agency to keep biofuels at about 10 percent of the motor vehicle fuel market, based on the predominant blend of ethanol into gasoline sold to consumers, threatens to kill investment into ethanol made from non-corn cellulosic feedstocks.
"It's time for Congress to step in and do something," McAdams said in an interview.
The Environmental Protection Agency announced Friday that it will not finalize its 2014 Renewable Fuel Standard proposal this year and will set final targets next year, potentially with 2015 requirements.
The agency is more than a year late in finalizing the annual mandate for biofuels use in transportation fuels. Late last year it proposed to cut required use compared to 2013, which prompted intense lobbying from the biofuels industry in an effort to raise the totals in a final rule.
"Due to this delay, and given ongoing consideration of the issues presented by the commenters, EPA is not in a position to finalize the 2014 RFS standards rule before the end of the year," the agency said in a Federal Register notice.
Sources tell Platts that the Renewable Fuel Standard for 2014 biodiesel production will range from 1.28 billion to 1.5 billion gallons, far lower than industry capacity that reached 1.8 billion gallons last year.
As industry and politicians await this year's final ethanol mandate from the Environmental Protection Agency, the oil industry hopes to get a lower total out of the Obama administration with a long shot pitch that consumers want gasoline free from biofuels.
The American Petroleum Institute has asked EPA to consider an apparent increase in sales of unleaded gasoline with no ethanol. It has said those sales of so-called E0 should prompt a lower Renewable Fuel Standard requirement, below the 13.1 billion gallons of conventional ethanol it proposed last fall.
But the argument is running up against lobbying by the ethanol industry, which wants the totals raised, and EPA itself, and its success would be a surprise.
The Obama administration on Friday awarded $210 million to three companies to build refineries that will be able to make more than 100 million gallons a year of biofuels to power Navy ships and jets.
The awards come some three years into President Barack Obama's initiative to develop a domestic military-grade biofuels sector. It follows the testing of biofuels by the Navy in a live exercise in 2012.
The Department of Energy has awarded $12.2 million to the University of Arkansas and $22.5 million to the University of Illinois Cyber Resilient Energy Delivery Consortium for projects to improve cyber defense technology on the grid and on oil and natural gas infrastructure, the Los Alamos Daily Post reports.
Many states—even a number of those traditionally opposed to cap-and-trade—are in preliminary discussions exploring whether carbon trading should be part of their plans to comply with the Environmental Protection Agency’s Clean Power Plan, E&E reports.
A projection from the International Energy Agency saying that the oil glut will persist well into next year dragged prices down Tuesday. U.S. benchmark crude lost 44 cents, settling at $46.66 a barrel on the Nymex, while in London, Brent fell 62 cents, or 1.2 percent, to $49.24, Reuters reports.
Emerald Oil Inc. says it is $20 million overdrawn after lenders reduced the company’s credit line by 40 percent, so it has entered negotiations with the banks on how to pay back what’s owed, The Wall Street Journal reports.
After problems with platform anchors delayed Chevron’s multibillion dollar Big Foot drilling project in the Gulf of Mexico, the company has towed the platform back to South Texas for servicing and is investigating what went wrong, FuelFix reports.
A lawsuit against Energia Sierra Juarez—a joint U.S.-Mexican wind project that sells all of its output to San Diego Gas & Electric—also names the Department of Energy and the U.S. Fish and Wildlife Service, and claims DOE didn’t consider environmental impacts in Mexico before signing off on the deal, KPBS reports.
Joining the Obama administration push to promote the fight against climate change ahead of the U.N. talks in Paris, National Security Adviser Susan Rice told an audience at Stanford University that the “advancing menace” of climate change is the biggest long-term challenge on the planet, Politico reports.
With the Tennessee Valley Authority’s Wats Bar Unit 2 nuclear plant due to come online early next year—construction on it having started in 1972—the Los Angeles Times argues that the facility's history is symbolic of problems in the industry.
Grid operators and utilities will bring their arguments Wednesday to the U.S. Supreme Court against the Federal Energy Regulatory Commission rule requiring them to offer incentives to customers who cut electricity use during peak demand, E&E reports.