Final RFS rule a lot of trouble for little energy

Aug. 9, 2013

If Americans read the Environmental Protection Agency’s final rule implementing the Renewable Fuels Standard for 2013

they’d understand why business people directly affected by the regulation want Congress to scrap the underlying law.

To simplify, the law requires the impossible.

It mandates sales of more conventional ethanol than the market needs—or soon will need. It requires far more cellulosic biofuel than anyone can produce. It stuffs requirements into confusing and overlapping categories—cellulosic biofuel, biomass-based diesel, advanced biofuel. And it makes EPA sort out the mess.

To EPA’s credit, the final rule for 2013, although months late when published Aug. 6, acknowledges two problems the agency has treated insufficiently in the past.

It lowers the requirement for cellulosic biofuel to an amount that actually might be available this year. And it hints at regulatory adjustment for the blendwall—when the biofuel requirement exceeds market capacity—next year.

EPA could have wielded its waiver authority more helpfully, but the nod toward reality is welcome.

Now, in ethanol-equivalent volumes, 6 million gal of cellulosic biofuel must be sold in the US, down from the 14 million gal EPA initially proposed, which was down from 1 billion gal in the law. The biomass-based diesel requirement is 1.28 billion gal. And the total advanced biofuel requirement is 2.75 billion gal, which EPA is confident can be met because it required 2 billion gal last year and supply was 337 million gal higher, thanks to 580 million gal of imported ethanol made from sugarcane.

A striking feature in the 89-page final rule is how much trouble EPA must undertake for so little energy. Whether or not EPA’s cellulosic and advanced biofuel targets really can be met, 2.75 billion gal hardly counts as mist in the 13.9 million b/d US market for transport fuel.

Meanwhile, affected businesses must buy credits to the extent they can’t meet impossible requirements.

Lucky for Congress, most Americans won’t read the final rule. They’ll just have to pay for it.

(Online Aug. 9, 2013; author’s e-mail: [email protected])