WASHINGTON, August 2, 2017 - Fresh on the heels of a courtroom success, a wide swath of renewable fuel stakeholders would like to have their feedstock and make more advanced biofuel out of it, too.
At an EPA public hearing Tuesday on the Renewable Fuel Standard, much of the testimony struck a similar tone: happiness that the EPA’s latest proposal stuck to the statutory 15 billion gallons of conventional biofuel, but a desire to see stronger support for advanced and cellulosic biofuel.
The proposal released last month by EPA would set 2018 Renewable Volume Obligations (RVOs) at 19.24 billion gallons, a slight decrease from the 19.28 called for in 2017. EPA left room for 15 billion gallons of conventional biofuel in the proposal, but took away from the advanced biofuels category that many see as key for the growth of the industry.“This is a zero growth proposal,” a biofuels industry source told Agri-Pulse on the sidelines of the hearing.
The lack of a boost for advanced biofuels was a point of frustration evident in much of Tuesday’s testimony. Brent Erickson, executive vice president of the Biotechnology Innovation Organization’s Industrial and Environmental section, told reporters the logic EPA is using runs afoul of a court decision last week that held the EPA could not consider demand side factors when determining available supply.
“The agency is failing to increase the use of biofuels this year and failing to force the market as the court found it must,” Erickson said. He noted that advanced biofuel Renewable Identification Numbers – which are used to track RFS compliance – are being retired unused, something he said was “really ridiculous. This was not how the RFS was intended to work.”
The Trump administration has offered little to explain the decrease, aside from a lowered forecast for cellulosic biofuel production. But the industry doesn’t see it that way, and its leaders openly wonder if the administration understands the potential of the very business the RVOs would govern.
“I’m not sure that (EPA Administrator) Scott Pruitt appreciates the potential for cellulosic ethanol and other advanced biofuels in the way that we in the industry do and the president likely does as well, but he (Pruitt) will get to know all about it, I’m sure,” Renewable Fuels Association President and CEO Bob Dinneen told reporters after his testimony.
About 140 people testified at the hearing, including about 20 witnesses with ties to the National Biodiesel Board. Biodiesel interests were dissatisfied with the proposal, which set a 2019 RVO for biomass-based diesel at 2.1 billion gallons, unchanged from the Obama administration’s proposal for 2018.
NBB and other stakeholders are pushing for a 2.75 billion gallon biomass-based diesel RVO, which would represent a 650 million gallon increase from the proposal. The industry is confident it can produce more than enough to satisfy that much of a surge. Anne Steckel, NBB’s vice president of federal affairs, pointed out biodiesel usage for 2016 – when delays at the EPA meant there was no RVO to adhere to – was 2.6 billion gallons, without using available infrastructure to its fullest potential.
“Our capacity is 4.2 (billion gallons),” Steckel said. “We’re running at half of that capacity, so we have a lot more room to grow.”
Strong figures and compelling data points are good to have on one’s side, but they don’t always translate into favorable policy. For as many supporters of the RFS as there were on Tuesday, opponents also took their turns at microphones, calling on EPA to cut the RVO down to 9.7 percent of gasoline demand, to switch over the point of obligation, or even to use the same waiver authority in the 2018 RVOs that was just ruled against in the courts last week.
This all leads to a fundamental question: Does the renewable fuels industry have the political muscle necessary to get the EPA to reverse course? Lobbyists and lawmakers alike battled for years to get the conventional RVO to a statutory 15 billion gallon requirement, which could give them the ability to shift their attention to a different push. In addition to the small army of industry supporters, a handful of elected officials – Iowa Gov. Kim Reynolds, Nebraska Gov. Pete Ricketts, and Sen. Joni Ernst, R-Iowa – also showed up to urge the EPA to boost requirements.
Asked by Agri-Pulse if the administration could be persuaded to do just that, all three offered comments that ranged from optimistic to downright instructive.
“They have certainly talked about it, but what we need to see now is that action,” Ernst said. “We can’t send mixed signals on this. We want to have a strong market available so we see the types of investment in capital projects that we want.”
The public hearing was part of a comment period on the July proposal that runs through the end of the month. Pruitt has said publicly that he wants to finalize RVOs on time, which would require a final announcement by Nov. 30.