RFA urges EPA to deny big oil's RFS waiver petition

Sep 3, 2013

According to a letter sent to the Environmental Protection Agency (EPA) Administrator Gina McCarthy, the ethanol blend wall could be successful under the current Renewable Fuels Standard (RFS), and a waiver is not necessary.

The letter sent last week urged the EPA to reject the petition for a partial waiver of the 2014 RFS submitted recently by the American Petroleum Institute (API) and American Fuel & Petrochemical Manufacturers (AFPM).

“Big Oil’s attempt to completely rewrite and redefine the statute pertaining to RFS waivers is just another shameless example of how far they’ll go to protect their market share and block larger volumes of renewable fuel from reaching the consumer,” said Bob Dinneen, Renewable Fuels Association’s (RFA) President and CEO. “Not only do API and AFPM blatantly contort the meaning and intent of the statute, but, as trade associations, they aren’t even entitled to file a petition for a waiver in the first place.”

The EPA has hinted recently of changes to the RFS. The EPA has until mid-November to review the petition request.

According to RFA’s letter, the petition from API and AFPM obscures the fundamental purpose and intent of the RFS, which is to drive the production and use of renewable fuels beyond their traditional role as fuel additives.

“The need to move beyond E10 in 2014 for the purposes of RFS compliance should hardly come as a surprise to obligated parties,” wrote Dinneen, pointing out that it was clear as early as 2009 that the so-called E10 “blend wall” would occur in 2013 or 2014. “Unfortunately, many obligated parties chose to blatantly ignore the strong signals compelling them to begin preparations for higher volumes of renewable fuels and to increase investments in storage and distribution infrastructure. Now, the members of API and AFPM seek relief from their renewable fuel blending obligations, arguing that their failure to prepare for 2014 RFS requirements somehow merits reprieve. EPA should not reward such blatant disregard for resoundingly clear policy signals.”

The RFA comments conclude that the combination of increased E85 and E15 sales, carryover Renewable Identification Numbers (RINs) from 2013, and likely administrative adjustments to the 2014 advanced biofuel standard will allow obligated parties to easily meet their RFS requirements without adverse economic consequences.

“EPA should act swiftly to reject the petition submitted by API and AFPM. The conditions outlined in the Clean Air Act under which EPA may grant a waiver simply do not exist,” Dinneen concluded. “The RFS is working precisely as intended—EPA is exercising its authority to adjust annual blending requirements, RINs are sending clear signals to the marketplace to expand renewable fuels infrastructure and consumption, and RIN banking and trading provisions are providing compliance flexibility to obligated parties. In short, oil refiners and importers should have no difficulty in meeting their 2014 blending requirements.”

While the RFA is working for a rejection on the waiver, politicians are busy taking a stance.

U.S. Senators Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) called on the Justice Department and Federal Trade Commission (FTC) to investigate possible anticompetitive practices by oil companies that limit consumers access to homegrown renewable fuels. In a letter to Attorney General Eric Holder and FTC Chairwoman Edith Ramirez, Klobuchar, the Chair of the Antitrust Subcommittee, and Grassley, the Ranking Member of the Judiciary Committee, urged the Administration to take action to address recent reports indicating that oil companies may be undermining efforts to distribute renewable fuels, including higher ethanol gasoline blends, that help boost our nation’s energy security and lower the price of gas for consumers Recent concerns indicate that oil companies may be taking steps to undermine efforts to distribute renewable fuels, including higher level ethanol blends that help boost energy security and lower the price of gas for consumers, according to the Senators.

“The promise of renewable fuels is rapidly becoming a reality and introducing much needed competition to the transportation fuels sector,” the members said. “Given the implication these alleged activities, if true, could have on competition in the marketplace, we urge you to investigate them and consider whether any action is necessary. We look forward to working with you to ensure that Americans can continue to realize the benefits of cheaper, cleaner renewable fuel.”— Traci Eatherton, WLJ Editor