API, AFPM ask EPA to partially waive 2014 ethanol requirements

The American Petroleum Institute and the American Petrochemical & Fuel Manufacturers jointly asked the US Environmental Protection Agency to partially waive 2014 ethanol volume requirements under the federal Renewable Fuels Standard.

The trade associations petitioned EPA to reduce next year’s ethanol mandate to below 10% of gasoline demand. “Higher ethanol requirements could lead to a reduction in the domestic fuel supply, increased costs, and severe harm to the US economy,” API Downstream Group Director Bob Greco warned.

API and AFPM have said for months that falling US gasoline demand could make 2014 ethanol volume requirements unworkable under the RFS’s amended mandates in the 2007 Energy Independence and Security Act. They contend the RFS could hit a “blend wall” as mandates call for more renewable fuel volumes than fundamental constraints imposed by fueling infrastructure and gasoline engine incompatibility allow.

“To be sure, delaying the ethanol blend wall until 2015 will not solve the underlying problem of accelerating RFS mandates, but EPA has clear authority to grant multiple waivers,” Greco and AFPM General Counsel Richard Moskowitz said in their Aug. 12 petition to EPA Administrator Gina McCarthy.

They also recommended that EPA clearly indicate any methodology used to grant a 2014 waiver would continue past that year since it appears likely that conditions their petition described will continue. “A clear statement of intent to grant additional waivers if current conditions persist will send a clear message to the marketplace and allow for the most efficient resolution of this matter,” they said.

Possible consequences

“If EPA does not act, the inability to blend the statutory-mandated amount of ethanol could lead to domestic fuel supply shortages and ultimately cause severe economic harm to consumers and the economy,” AFPM Pres. Charles T. Drevna separately said.

The agency said it would study the blend wall issue as it formulates its proposed 2014 standards when it issued final 2013 biofuel volume requirements on Aug. 7 (OGJ Online, Aug. 7, 2013). “EPA has the opportunity to curtail the harmful effects of the policy next year by waiving the 2014 volumes before more economic damage is done,” said Drevna.

“This petition will provide a road map for the agency to follow,” he continued. “I expect it will take American families into consideration when it makes its decision.”

API’s Greco said that while a 2014 waiver would provide short-term relief, the RFS is outdated and needs to be repealed. “Under the current RFS regime, ethanol requirements will continue to increase while gasoline demand continues to decline,” he indicated. “That’s why we need a full repeal by Congress.”

Contact Nick Snow at nicks@pennwell.com.

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