WASHINGTON, Sep. 16, 2015 – Top executives from 23 companies that produce cellulosic and advanced biofuels are calling on President Obama and the EPA to remove a waiver provision in the latest Renewable Fuel Standard proposal that would allow oil companies to challenge RFS blending requirements because of so-called “distribution” problems.The executives maintain that the large oil companies create those problems themselves, in some cases by blocking brand-licensed gas stations from selling fuel blends with higher renewable content, and that such behavior should not be rewarded by waiving RFS requirements on a year-to-year basis.
“The point of the RFS was to require oil companies to buy and sell an increasing amount of renewable fuel to address the fact that the oil industry would otherwise use its market position to cut off market access for competitors and thereby smother investment in cellulosic ethanol and advanced biofuels,” the executives said in a letter to Obama.
Allowing the distribution waiver, they said, “would gut the core concept behind the law.”
Representatives from several of the biofuel companies also held a conference call to draw attention to the letter to the president. They said that although the waiver proposal has yet to be finalized, the fact that the EPA would consider such a measure – along with plans to cut blending requirements – has already frozen nearly $14 billion in investments.
“We’re asking the president to carefully consider the long-term effects of this action,” Chris Standlee, executive vice president for global affairs at Abengoa Bioenergy, told reporters on the call.
“President Obama is asking for our support on his Clean Power Plan, but what is he doing to support the RFS, our country’s only law on the books directly aimed at climate and clean energy?” Standlee asked, noting that Obama had recently urged investors to put their money into wind and solar.
“He made that same promise to investors in advanced biofuels years ago. But investors aren’t going to invest in innovation of any kind if they are worried about a political bait and switch, particularly if it can happen with a global climate champion.”
Beyond undercutting investments in biofuels, the executives said the administration’s actions are sending jobs and innovations overseas.
Adam Monroe, North America president for Novozymes, said there was a simple way for Obama and the EPA to get back in the game of supporting the RFS.
“We need that distribution waiver to be removed,” he said. “That would give confidence that this industry’s keys are not being held” by the people who control the fuel infrastructure.
The executives pointed out that the administration will be releasing its finalized rule setting renewable blending requirements for 2014, 2015 and 2016 at the end of November, just before an ambitious climate-change summit in Paris.
“As President Obama heads into the climate talks in Paris at the end of this year, he will have to answer for how the U.S. can be a world leader on combatting climate change when he has gutted the only law directly aimed at addressing climate and clean energy back at home,” according to a news release summing up the call.
Carlton Carroll, a spokesman for the American Petroleum Institute, said oil companies are not opposed to biofuels. “We’re opposed to mandates that force more biofuels into the fuel supply than is safe and that could threaten our economy,” he said. There is concern that higher blends of ethanol can harm a car’s engine, he said.
“Ethanol and other renewable fuels have an important role to play in our transportation fuel mix, and refiners will continue to use ethanol after repeal of the RFS,” he said.
He also said that “mandating advanced biofuels that do not exist in substantial quantities, like cellulosic biofuel, is simply bad policy. It’s a mandate for something that doesn’t exist.”
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