Despite Lawsuits, EPA Investigation, Renewable Fuel Standard ‘Not Doomed’

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by | Feb 16, 2016

gas stationIn the latest efforts to repeal the US biofuel mandate, last week the American Petroleum Institute and the American Fuel & Petrochemical Manufacturers both filed lawsuits challenging the Renewable Fuel Standard, which requires refiners to blend corn-based ethanol with gasoline.

The Energy Independence and Security Act of 2007 (EISA) established annual renewable fuel volume targets, which steadily increase to 36 billion gallons by 2022.

The API lawsuit, filed on Thursday with the DC Circuit Court, challenges the EPA’s failure to meet deadlines for the 2014 to 2017 biomass-based diesel standards and for mandating higher levels of cellulosic ethanol in 2016. The API says this is more than even exists.

The proposed 2016 standard for cellulosic biofuel — those fuels that the EPA says have the lowest GHG emissions profile — is more than 170 million gallons higher than the actual 2014 volumes. That’s six times higher than actual 2014 volumes.

The API says the proposed 2016 ethanol volumes aren’t safe for most cars on the road and the mandate will push fuel costs higher and damage car engines. The oil group wanted the EPA to set the final ethanol mandate to no more than 9.7 percent of gasoline demand to help avoid the 10 percent ethanol blend wall, which refers to the difficulty in incorporating ethanol into the fuel supply at volumes exceeding 10 percent.

Beyond 10 percent, the ethanol renders the blended fuel “incompatible with today’s engines, vehicles and the multi-billion dollar infrastructure” in the US, the AFPM and API say.

The biofuels industry, on the other hand, counters that the blendwall is a myth.  An analysis of 2016 model year warranty statements and owner’s manuals conducted by the Renewable Fuels Association shows that auto manufacturers approve E15 — 15 percent ethanol 85 percent gasoline — use in more than 70 percent of new vehicles. This is up from 2015, when just over 60 percent of MY 2015 automobiles were clearly approved for E15.

“This analysis should open some eyes and finally lay to rest the ridiculous myth that automakers do not allow the use of E15 in their vehicles,” said RFA president and CEO Bob Dinneen in a statement. “In fact, 2016 will be the fifth year in a row in which some auto manufacturers have explicitly included E15 in owners’ manuals and warranty statements as an approved fuel. With each passing year, more and more vehicles sold in the US carry the manufacturer’s unequivocal approval for E15; and with each passing year, the auto warranty misinformation campaign undertaken by AAA and Big Oil fades further into irrelevance.”

Meanwhile, in a statement about the AFPM lawsuit, filed on Wednesday with the DC Circuit Court, AFPM president Chet Thompson said: “Despite the agency’s best efforts, certain aspects of the final RFS rule still run afoul of the Clean Air Act. Among other things, EPA failed to provide obligated parties with requisite lead time and used flawed methodologies in establishing volume requirements. This rule further confirms that the RFS program is dysfunctional and that the only real solution is full repeal by Congress.”

The two oil industry groups have been urging Congress to repeal the biofuel mandate for years — an effort that inadvertently received a boost late last year when the EPA launched its own review of the environmental benefits of the Renewable Fuel Standard.

Despite the continued backlash against the Renewable Fuel Standard, it’s more likely to move forward than to vanish, according to Yuan-Sheng Yu, Lux Research’s lead analyst on the firm’s alternative fuels team.

“The finalized volumes released in November 2015 was a promising sign for the RFS, despite all the backlash from both sides,” Yu told Environmental Leader. “For the first time the percentage standard for the ratio of renewable fuel volume to non-renewable gasoline and diesel volume exceeded 10 percent, the infamous blendwall. Previous years that percentage continued to float around 9.5 percent, but the 2016 volumes made a significant statement on where the EPA wants to take the RFS.”

Yu says the API lawsuit it not surprising — the industry groups have sued the EPA over the biofuel mandate in the past — but adds that the API’s statement about the 2016 proposal mandating more cellulosic ethanol that exists is “somewhat misguided.”

“The Cellulosic Biofuel (D3) requirement, set at 230 million gallons, is not for cellulosic ethanol only,” Yu explains. “D3 includes biogas-derived CNG, biogas-derived LNG, and biogas-derived electricity for electric vehicles as well. At the rate biogas-derived CNG and LNG has hit the market in 2015, 230 million gallons is no an unattainable goal.”

Looking forward, Yu says “a bold prediction would be that by 2020 there will be a 15 percent ethanol mix in gasoline across the nation. While there is a chance this may not happen, automakers are definitely preparing for it.”

Yu also cited the statistic that about 75 percent of US automotive original equipment manufacturers have approved a 15 percent ethanol blend for all vehicles beginning in model year 2016. “A combination of this and the 2016 finalized volumes makes us believe that the RFS is not doomed,” he says. “While reaching the original EISA 2007 targets by 2020 is a long-shot, it is definitely not doomed.”

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