U.S. INDUSTRY FILES SUIT TO BLOCK EPA'S RFG RULE

As expected, the U.S. petroleum industry is suing to block a federal rule that requires the use of renewable fuels in reformulated gasoline (RFG).

The American Petroleum Institute and the National Petroleum Refiners Association filed the lawsuit against the Environmental Protection Agency.

The EPA rule is considered a born to corn growers and ethanol producers. That's because the agency's rule will require renewable fuels to provide 30% of the oxygen content of reformulated gasoline in 1996 (OGJ, July II, p. 75).

API and NPRA filed suit in the District of Columbia's federal Court of Appeals. They also asked EPA to stay its rule. If it does not, they will ask the court for a stay.

API Pres. Charles DiBona said, "We will win this lawsuit."

INDUSTRY'S COMPLAINTS

Both industry groups complained EPA has not given refiners enough time to prepare to use the 15% of renewable fuels to be required effective Jan. 1.

Urvan Sternfels, NPRA president, said the nile will impose "unwarranted and costly burdens on domestic refiners both large and small, disrupt the largest ever transition to clean RFG next January, and result in more energy consumption with no environmental benefits."

DiBona said, "The ethanol mandate is neither legal nor rationally defensible. The ethanol mandate exceeds EPA's statutory authority. Moreover, the decision was not based on any environmental or economic criteria but was instead the product of special interest politics."

He said EPA abandoned a similar ethanol mandate late last year because it decided it had no legal authority under the 1990 Clean Air Act (CAA) amendments to order the use of ethanol.

"Incomprehensibly," DiBona said, "EPA then proceeded to publish a ,new and improved' proposed ethanol mandate which is just as unlawful."

DiBona said API and NPRA do not object to use of ethanol in RFG.

"What we object to is its required use, preventing refiners from choosing the oxygenate that is appropriate, be it ethanol or methyl tertiary butyl ether (MTBE). Indeed, some of our members manufacture ethanol, and some would probably choose to use it in their reformulated fuel in the right circumstances."

He claimed the rule violates the letter and spirit of an EPA-industry regulatory negotiation process that produced the RFG rule, and environmental groups are concerned about the mandate's effect on air pollution.

And he said the rule "is likely to mean higher costs to consumers, serious logistical problems for refiners, and a possibly adverse impact on oil imports."

CRASH PROGRAM

DiBona noted the CAA amendments provided the refining industry a 3 year lead time to make the certification, refining, distribution, and marketing arrangements needed by the Jan. I start-up date for RFG.

"However," DiBona said, "EPA did not issue its main RFG regulations until December 1993 and did not issue its final ethanol decision, amending the RFG regulations, until 2 weeks ago - an extremely short time before oil companies will need to have supplies of ethanol or ethyl tertiary butyl ether at their distribution terminals,

"Now, on a crash basis, adequate supplies of ethanol or ethyl tertiary butyl ether (ETBE) need to be located. Refiners that had planned to produce MTBE to satisfy the RFG oxygenate requirement now must modify those plants to produce ETBE, locate other sources of ethanol or ETBE, or experiment with an untried credit system.