Stakeholders beyond refiners are dissatisfied with the federal Renewable Fuel Standard. Advanced biofuel manufacturers and a major US environmental organization also expressed their frustration over its implementation at a Mar. 17 Capitol Hill briefing.
Refiners, of course, are annoyed that they remain the obligated parties when something goes wrong with the RFS's Renewable Identification Number biofuel credit system, even when it's caused by a biofuel supplier's fraud. They're also concerned as the US Environmental Protection Agency keeps trying to raise the allowable ethanol limit in gasoline to 15%-a level beyond automotive and small engine manufacturers' warranties.
"It's essential that we reexamine the RFS," said Frank J. Macchiarola, American Petroleum Institute downstream and industry operations group director. "We will be pushing hard on this in the next 10 months."
Other panelists at the Advanced Biofuels Association event agreed that it's time for Congress to take another look at the RFS, which the 2005 Energy Policy Act established and the 2007 Energy Independence and Security Act expanded.
EPA is trying to establish a middle ground that can be met between now and 2020, ABA Pres. Michael McAdams said. He said the challenges basically are uncertainty beyond 2022, regulatory implementation of the cellulosic waiver credit, overly burdensome and limited flexibility in the regulatory process, lengthy regulatory determination delays, and on-again, off-again tax support.
"It doesn't give any banker confidence that they can get the payback on their investments," McAdams said. "We need more tax policy certainty. We could use some fixes in the statute."
Julie Sibbing, whose responsibilities as the National Wildlife Federation's agriculture and forest programs senior director include improving the sustainability of biofuels and biomass for energy, also said the RFS requires attention because of serious implementation problems since 2007.
Disappearing grassland
For starters, the law specified there would be no conversion of land to ethanol production from other purposes beyond what existed in 2008, Sibbing said. "EPA filed to provide any land use protection," she said. "While 4.4 million acres of cropland were abandoned between 2008 and 2012, 7.3 million were converted to production, about 51% of which was corn for ethanol, yielding a net 2.9 million-acre cropland increase." Virgin grassland where wildlife can thrive is being lost, she added.
An audience member who said he was a Senate Energy and Natural Resources Committee staff member suggested it will be important to ensure that reopening the RFS will make it more effective, and not simply weaken it.
"This is a law that isn't delivering what it promised," observed McAdams. "As it is, some of my members may build plants to manufacture face creams instead of motor fuel."
Bob Tippee | Editor
Bob Tippee has been chief editor of Oil & Gas Journal since January 1999 and a member of the Journal staff since October 1977. Before joining the magazine, he worked as a reporter at the Tulsa World and served for four years as an officer in the US Air Force. A native of St. Louis, he holds a degree in journalism from the University of Tulsa.
