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By Ed Burke, Dennis K. Burke Inc.
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Protection Agency (EPA) released its
proposed volume requirements for the
2014 Renewable Fuel Standard (RFS). The
proposal would scale back next year’s total
renewable fuel volumes from 18.15 billion
gallons to 15.21 billion gallons. Unlike past
RFS proposals, EPA has proposed volume
ranges for most fuels, in place of exact
target volumes.
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EPA has been pretty unyielding when it
comes to volume reductions. A driving factor
in its decision to reduce the 2014 volume
obligations, EPA cited concerns about
breaching the 13.8 billion gallon “blend
wall.” That’s where essentially every gallon
of gasoline used in the U.S. contains 10 per-
cent ethanol. EPA says the volume reduction
(about 16 percent) will hold ethanol blends
in gasoline at the current E10 level.
The RFS has become controversial this
year because for the first time, it will be
difficult for refiners to meet the required
RFS levels. The oil industry and other lobby
groups have argued that the RFS should be
repealed, while the biofuels lobby argues
that it is working and can be made to func-
tion as it was intended.
Refiners are concerned about problems
associated with moving beyond the E10
blend wall. Ethanol groups contend that the
oil industry is only resisting E15 to main-
tain its market share. They say E15 is safe,
citing at least 40 studies and data from the
Department of Energy that have found E15
can be safely used in more than 60 percent
of cars on the road today. That leaves the
enormous problem of about 250 million
vehicles on the road today that can’t use
it, and then there are the marine engines,
chain saws, and other small engines.
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You can add AAA Motorclub to the list
of groups supporting lower RFS volumes.
While the group says it supports the
development of alternative fuels, there
are concerns that ethanol blends higher
than 10 percent have not been thoroughly
vetted. They also point to results of a 2012
survey finding only 12 million of the 240
million light-duty vehicles on the road were
approved by manufacturers to use E15.
They also noted that 13 vehicle manufac-
turers have policies that indicate the use of
E15 may void warranty coverage.
In an interesting twist, a recent survey
by the Renewable Fuels Association found
that about 70 percent of the top-selling cars
in the U.S. for model year 2014 can use E15
without voiding their warranty.
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EPA has also revised the definition of
Heating Oil, adding an additional category
of fuel oils in the RFS. The idea is to expand
the scope of fuels that generate RINs to
help obligated parties meet their annual
biodiesel volume obligations. These heating
oil gallons will not be included in the EPA’s
annual volume requirements, but expand
the number of RINs available to obligated
parties, without increasing their volume
requirements.
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Ethanol has been billed as a green
alternative to gasoline, but recent reports
suggest that ethanol’s environmental impact
may not be as green as we thought. A report
released by the National Research Council
concluded, “Although biofuels should
reduce carbon dioxide emissions because
they rely on renewable resources, many
studies we reviewed found the opposite.”
In an eye-opening investigative report,
the
Associated Press
took a look at how the
RFS models were created, and the alarming
environmental devastation caused by the
ethanol boom.
When the RFS was created, EPA experts
warned that the mandate would increase
demand for corn, raise crop prices, and
encourage farmers to plow more land.
Considering those factors, they said, corn
ethanol was only about 16 percent better
than gasoline when it came to carbon
dioxide emissions.
By law, biofuels were required to be
at least 20 percent greener than gasoline.
So, to get above that number, the EPA
model increased the “projected yield per
acre,” and they ended up with a number of
21 percent greener than gasoline.
And that started the ethanol boom.
Five million acres of land set aside for
conservation vanished. Landowners filled
in wetlands. They plowed into pristine
prairies, releasing carbon dioxide that had
been locked in the soil.
Sprayers pumped out billions of pounds
of fertilizer, some of which seeped into
drinking water, contaminating rivers and
worsening a huge dead zone in the Gulf of
Mexico where marine life can’t survive.
As farmers rushed to find new places to
plant corn, they wiped out millions of acres
of conservation land, destroyed habitat and
polluted water supplies, the
Associated Press
investigation found.
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This is a proposed rule and it is not
final. The EPA expects to release a final rule
in the spring after a 60-day public comment
period. Both sides of the issue plan to make
their cases heard, although in the past, the
proposed levels have never been changed
in the final ruling. Once the final rule is
released, biofuel supporters will likely
file legal challenges to any reductions or
waivers to the mandate.
Bringing together an unusual coalition,
environmental groups and the food industry
will join the oil industry in trying to have
the RFS repealed.
