API asks EPA for adequate margin of safety in 2014’s ethanol mandates

The US Environmental Protection Agency should be prepared to build in an adequate margin of safety when it develops final ethanol mandates for 2014 because forecasts often miss the mark, the American Petroleum Institute said in an Apr. 29 letter to EPA Administrator Gina McCarthy.

“For example, in 2013, gasoline consumption was more than 17 billion gal lower than what was projected in 2007, when Congress passed the Renewable Fuel Standard we use today,” API Downstream Group Director Robert L. Greco said on Apr. 30.

“But the inexactness of projections is not limited to the long term,” he told reporters during a teleconference as API released his letter to McCarthy. “Annual [US Energy Information Administration] gasoline projections since 2007 have missed the mark by an average of 220 million gal/year, and EIA’s 2014 Annual Energy Outlook Retrospective Review found total petroleum consumption was overestimated almost 70% of the time.”

Greco wrote the letter in response to reports that McCarthy told the North American Agricultural Journalists on Apr. 7 that she was aware of US Sec. of Agriculture Tom Vilsack’s statement that gasoline demand had increased since the proposed 2014 quotas were developed, and suggested that the final rule’s amounts could be higher as a result.

“EPA shouldn’t try to micromanage ethanol mandates based on slight changes in gasoline demand forecasts,” Greco said during the teleconference. “Instead, the agency must be conservative with ethanol mandates to provide consumers with a buffer against the consequences of the blend wall.”

The agency also needs to make room in the mandate for consumers who want zero ethanol gasoline for boats, recreational vehicles, and yard equipment, he said, adding, “Since sales of E0 represent about 3% of the market, that means the blend wall doesn’t start at a 10% ethanol mandate, [but] at a 9.7% ethanol mandate.”

He said, “That’s why we’ve asked EPA to limit the ethanol mandate to no more than 9.7% of EIA’s October estimates of US motor gasoline supply.”

EPA is required by statute to use EIA’s October estimates of projected gasoline demand for the coming year and issue its ethanol quotas for that period by Nov. 30, he noted. “The 2014 Final Rule is being issued very late and will be applied retroactively once again,” he said, adding, “EPA has said it wants the final rule out in June. To do this, it will have to send the final rule to [the White House’s Office of Management and Budget] in another few days.

He maintained, “So it’s especially important that the agency finalize the rule as soon as possible, and include an adequate margin for safety in order to protect consumers and preserve consumer choice.”

Contact Nick Snow at nicks@pennwell.com.

Related Articles

EIA: US gasoline prices to average $1/gal less in 2015 vs. 2014

02/10/2015 US regular gasoline retail prices are expected to average $2.33/gal in 2015, down from $3.36/gal in 2014, according to the Energy Information Admin...

MARKET WATCH: NYMEX oil prices rise on revised OPEC forecast

02/10/2015 Crude oil prices climbed more than $1/bbl on Feb. 9 to settle above $52/bbl, marking a third consecutive trading session that ended with higher pri...

MEO, Eni to exchange sections of Timor Sea permit

02/10/2015 MEO Australia Ltd., Melbourne, and Eni SPA—MEO’s joint-venture partner in the NT/P68 permit in the Timor Sea—have decided to split the permit betwe...

MRPL increases ownership in aromatics complex

02/10/2015 Mangalore Refinery & Petrochemicals Ltd. (MRPL), a subsidiary of Oil & Natural Gas Corp. Ltd. (ONGC), has increased its ownership interest ...

CNOOC signs two South China Sea PSCs with SK Innovation

02/10/2015 China National Offshore Oil Corp. Ltd. signed two production-sharing contracts with SK Innovation Co. Ltd., Seoul, for two blocks in the Pearl Rive...

Renewed uncertainty emerges over Greater Sunrise development

02/10/2015 There has been renewed uncertainty over the development of the Woodside Petroleum Ltd.-operated Greater Sunrise gas field in the Timor Sea followin...

Senators’ bill aims to curb flaring by expediting permit process

02/09/2015 North Dakota and Wyoming’s US senators introduced legislation that aims to capture methane and reduce flaring by expediting procedures for obtainin...

USW union workers add two BP refineries to strike list

02/09/2015 Union workers at two BP PLC-owned refineries in Indiana and Ohio have joined the United Steelworkers union’s (USW) unfair labor practice (ULP) stri...

Bendine elected as Petrobras’ chief executive officer

02/09/2015

The board of Petroleo Brasileiro SA (Petrobras) has approved the election of Alde Mir Bendine as the company’s chief executive officer.

White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


Cognitive Solutions for Upstream Oil and Gas

When Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected