Back and forth over RFS intensifies

By Spencer Chase

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, June 17, 2015 - Industry officials on both sides of the Renewable Fuel Standard (RFS) argument held dueling calls Wednesday afternoon to tell reporters why the EPA's management of the statute has them crying foul.

EPA came under fire in recent months for delays in releasing required blending requirements under the statute, angering both oil and ethanol interests alike for the uncertainty created in the marketplace. In April, the agency announced an updated timeline as a result of a consent decree from a lawsuit filed by the American Petroleum Institute (API) and the American Fuel and Petrochemical Manufacturers (AFPM).

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Oil and ethanol interests said during the calls that the EPA's most recent RFS proposal was ignoring the desires of the American consumer.

“(The EPA is) not paying any attention to the market,” API president and CEO Jack Gerard said. “I believe consumers are becoming more and more aware of what the ethanol blend is doing, and that's why there are even more dispensaries, more gas pumps if you will, that dispense E85, (but) you're not seeing a significant uptick in the consumption of E85.”

Ultimately, Gerard added, “consumer interests should come ahead of ethanol interests.”

Renewable Fuels Association President and CEO Bob Dinneen disagreed, saying proper implementation of the RFS would prove the “blend wall” - a term signifying the maximum amount of ethanol American consumers will buy - is an artificial construct.

“There's nothing wrong with the RFS that can't be fixed by what is right with the RFS,” Dinneen said. “EPA needs to read the statute and implement a program that Congress put in place, because it was working. If EPA allows the program to work, the market will break the blend wall.”

Gerard - along with Wayne Allard, vice president of government affairs for the American Motorcyclist Association and a Colorado senator at the time the RFS was passed - also pointed to data showing increased demand for E0, gasoline sold without any added ethanol. According to a chart created by API using data from the Energy Information Administration, demand E0 as a percentage of the total fuel supply has jumped from 3.4 percent in 2012 to 6.8 percent in 2014, a jump of about 4.73 billion gallons.

Dinneen said using those figures to signify increased demand for E0 is “patently untrue,” noting that those numbers include product that was produced in the U.S., but then exported.

“API has completely misinterpreted the data,” Dinneen continued. “If, in fact, you look at how much blending has occurred over the last year, ethanol blending has continued to increase. The only ones that are calling for E0 are those folks representing the interests of the status quo that don't want to see renewable fuels increase in this country and want to scare consumers into thinking that ethanol is bad for their engines.”

Both Dinneen and Gerard also spoke about the bill introduced yesterday by Louisiana Republican Bill Cassidy but disagreed about the bill for obvious reasons. Gerard said API supports either repeal or “significant reform,” adding that “the current system has clearly failed us.” Dinneen, however, said the bill was based more on political motivations rather than substantive ones.

“This was just another message bill; another request for campaign donations by an oil state senator that is catering to his in-state interests,” Dinneen said. He was especially aghast by Cassidy's comments about the RFS being bad for fishing in his home state, pointing out that the statute could create a demand for less oil drilling in the Gulf of Mexico, which was responsible for the BP oil spill in 2010. Dinneen said he would love to take a boat ride with Cassidy and point out the oil still floating in the water after over 200 million gallons of it spilled from the Deepwater Horizon oil rig.

Dinneen said unfortunately, the “story of the RFS” isn't about the success of the industry, but rather “EPA's mismanagement of a really good program that Congress had laid out for them,” making the program a constant target for legislative action. Even so, Gerard said he and many others hope that 2015 could be the year for potential legislative action causing significant RFS reform.

“Clearly the momentum (for RFS reform) is building,” Gerard said. “Quite candidly, the best approach is for all the parties to come together and resolve it, but as you can see, there's some who have no interest in resolving this who just continue to push for more and more and more, and now I think we've clearly put the American consumer at risk and I think you're going to see more and more folks come back and say ‘Enough is enough, we've got to fix it.'”

The Senate Subcommittee on Regulatory Affairs and Federal Management is set to welcome Janet McCabe, EPA's acting assistant administrator in their Office of Air and Radiation, Thursday morning to discuss the EPA's management of the RFS.

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