EPA has not met statutory requirements on RFS reports, OIG says

By Spencer Chase

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WASHINGTON, Aug. 18, 2016 - The Environmental Protection Agency has been taken to the woodshed by its Office of Inspector General, which said the agency has failed to provide legally required reports to Congress.

In a report posted on the EPA's website on Thursday, OIG said EPA has not prepared reports on the environmental impact of the Renewable Fuel Standard, as required by the Energy Information and Security Act of 2007.

EPA is behind on compliance with three required reports: a triennial report to Congress on the environmental and conservation impacts of the RFS, a separate anti-backsliding report on the impacts of the RFS on air quality, and a determination as to whether mitigation measures are necessary.

The OIG report says EPA management admitted that they “have not prioritized compliance” with the required reports.

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EPA's Office of Research and Development sent the last of the triennial reports to Congress in December of 2011, and the report says there have been no subsequent reports since. To top that off, “ORD currently has no plans to issue subsequent reports to Congress as required.”

ORD says that first report cost $1.7 million and the equivalent of four full-time employees for fiscal 2010 and 2011 to produce. The agency says it received little feedback from Congress about the report and that the three-year window leaves little room for new information.

OIG counters that the agency could have issued a report saying as much, saying that the “lack of scientific advances does not eliminate the EPA's reporting requirement.” Similar points were brought up about the anti-backsliding story, which would have determined if efforts to increase renewable fuels use could “adversely impact air quality as a result of changes in vehicle and engine emissions of air pollutants.”

EPA was also criticized in the report for failing to identify a process to update lifecycle greenhouse gas emissions of renewable fuels to compare them to the fossil fuels they are designed to replace. Since a 2010 comprehensive report on the matter, the agency has made no changes to their methodology. While not a statutory requirement, OIG says EPA “committed to updating its lifecycle analysis as the science evolves.”

OIG closed out its report by formally suggesting that the agency follow through with the required triennial reports as well as complete the additional studies as required by the law.

“Not having required reporting and studies impedes the EPA's ability to identify, consider, mitigate and make policymakers aware of any adverse impacts of renewable fuels,” the OIG concluded.

In response, the EPA agreed to finalize a new triennial report by the end of 2017 and request fiscal 2018 funding to address the anti-backsliding and mitigation studies. The agency, however, disagreed with the need to revisit the greenhouse gas threshold determinations, saying EPA's Office of Air and Radiation “does not believe that formal criteria are needed to determine whether the lifecycle GHG threshold determinations should be revisited.”

As evidenced by a June congressional hearing on RFS implementation, the need for this information is a rare point of agreement from nearly all sides of the biofuels debate, albeit for different reasons.

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Renewable Fuels Association President and CEO Bob Dinneen says RFA has “repeatedly” asked the EPA to update its carbon scoring of fuels blended with ethanol.

“We agree with the EPA Office of Inspector General that EPA needs to comply with requirements to assess the environmental impacts of the Renewable Fuel Standard,” Dinneen said in a statement. “We are confident that once EPA conducts these required studies, they will show that biofuels like ethanol are significantly reducing greenhouse gas emissions, even above the threshold reductions.”

Growth Energy CEO Emily Skor shared similar sentiments, saying that ethanol is beneficial to the environment and consumers “and we are certain that any report will reflect that.”

“We're confident that when EPA reviews this program, they will see the significant benefits to consumers in lower gas prices, lower greenhouse gas emissions and decreased exposure to harmful pollutants known to cause cancer, pollution and smog,” she said in a statement.

Chet Thompson, the president of the American Fuel and Petrochemical Manufacturers, was also critical of EPA's missed deadlines

The agency has repeatedly missed deadlines associated with this program," Thompson said in a statement. "EPA has sold the RFS as an environmentally-friendly program to the American public, but yet it has repeatedly failed to take the necessary - and statutorily required - steps to determine in fact this is true." 

 

Controversy is nothing new for the RFS. Last year, the EPA had to set three years worth of renewable fuel blending requirements at once due to failure to do so in 2014 and 2015. Now, the agency appears to be on its congressionally required timeline, but is using infrastructure concerns to set blending requirements below statutory volumetric targets. A number of renewable fuels stakeholders are currently suing the EPA for that reason.

The agency published its 2017 proposed blending requirements in May. Public comment on that proposal expired in July, and final figures are expected by the end of November.

(Story updated at 5:10 p.m. EDT to include comment from AFPM) 

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