EPA refuses to waive renewable fuels requirements

The US Environmental Protection Agency denied requests for waivers to the federal Renewable Fuels Standard after rejecting suggestions that not doing so would pose significant economic hardship to drought-stricken agricultural operations.

“We recognize that this year’s drought has created hardship in some sectors of the economy, particularly for livestock producers,” said Gina McCarthy, assistant administrator for EPA’s Air and Radiation Office. “But our extensive analysis makes clear that congressional requirements for a waiver have not been met and that waiving the RFS will have little, if any, impact.”

Governors from several US states sought the waiver this past summer, EPA said in its notice about the decision. The agency received nearly 30,000 comments on the matter by Oct. 11 when the public comment period ended, it noted.

While falling corn production potentially might have affected fuel ethanol additive prices, oil and gas groups apparently did not join the requests for waivers. Two of them nevertheless criticized EPA’s decision.

American Fuel & Petrochemical Manufacturers Pres. Charles T. Drevna said the governors’ request for a waiver and EPA’s rejection underscores pervasive problems with the RFS, which was imposed with passage and adoption of the 2007 Energy Independence and Security Act.

“While AFPM supports the sensible integration of alternative fuels into commerce, consumer choice in the marketplace—not mandates—should dictate how these fuels are used,” Drevna said. “The growing chorus of concern from food, livestock, engine, and consumer communities continues to highlight the mandate’s unintended consequences and destructive nature.”

The American Petroleum Institute did not take a position on the waiver, but felt that EPA “applied an improper and unnecessary high bar, which makes it questionable if any waiver could be granted,” API Senior Policy Advisor Patrick Kelly said.

Noting that it is focusing on the impending ethanol blendwall and other underlying RFS problems, Kelly continued, “The RFS has become increasingly unrealistic and unworkable.”

But a major fuel ethanol advocate applauded EPA’s decision. “The RFS is working as designed,” Renewable Fuels Association Pres. Bob Dineen declared. “The flexibility that is built into the RFS allows the marketplace to ration demand, not the government. Indeed, the ethanol industry has responded to the market by reducing output by approximately 12%. Other users of corn have responded to a lesser degree.”

He called for a more constructive dialogue with livestock and poultry groups about the real causes of high feed costs and the impacts on retail food prices.

Contact Nick Snow at nicks@pennwell.com.

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