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RFS Deadline Nears
Monday, July 27, 2015 2:43PM CDT


By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- Both sides in the debate about the future of the Renewable Fuel Standard staked their claims on the final day of the public comment period for a three-year proposal through 2016, as oil industry groups announced a social media campaign aimed at changing the RFS and a major ethanol group submitted comments to the EPA arguing the action taken by the agency is "illegal."

As of early Monday afternoon EPA had received more than 47,600 comments on regulations.gov, including a number of mass-mailing campaigns that are likely to send the final comment number well over several hundred thousand comments.

Both biofuels and oil industry officials offered hints as to the direction potential lawsuits could take once EPA finalizes the rule that would provide a bump to biomass-based diesel volumes while still cutting the overall RFS volumes including corn-based ethanol.

When it comes to the proposed volumes for biodiesel starting at 1.8 billion gallons in 2014 and jumping to 1.9 billion gallons in 2016, an oil industry representative said during a news conference Monday that EPA's proposal may not be legal.

Currently the RFS has a 1-billion-gallon requirement for biomass-based diesel in 2012, but no numbers outlined after that year.

If EPA wishes to expand that number beyond 1 billion gallons, the agency is required to provide a 14-month advanced notice. Brenden Williams, executive vice president of the American Fuel and Petrochemical Manufacturers, or AFPM, said as a result it is too late to set the 2016 RFS target. EPA notice should have been issued by Nov. 1, 2014. This means if the agency wants to set higher targets for 2017 it would have to provide notice by Nov. 1, 2015.

"We will let comments play out," Williams said. "We are going to be referencing the tardiness of biodiesel in our public comments."

RENEWABLE FUELS ASSOCIATION

In a 127-page comment submitted to the EPA Monday the Renewable Fuels Association indicates it also is considering legal action against the agency on the proposal for a number of reasons.

Bob Dinneen, the group's chief executive officer and president, said in a letter that EPA has gone beyond what the statute allows.

"By adopting the narrative of the oil industry with regard to how much ethanol can be blended into gasoline, EPA has unnecessarily and illegally curtailed the unprecedented evolution occurring in the transportation fuels market that was delivering technology innovation, carbon reduction and consumer savings.

"EPA purports to be intent on putting the RFS 'back on track' and even suggests this proposal moves the RFS past the so-called 'blend wall.' It does not."

Also on Monday, the American Petroleum Institute announced the start of a social media campaign aimed at stopping the growth of the E15 market and the RFS in general, including a number of cartoons and videos.

State of Iowa officials including Gov. Terry Branstad submitted a combined public comment Monday asking President Barack Obama and EPA Administrator Gina McCarthy to maintain the current RFS law.

"We share the concerns of many Iowans and citizens throughout the Midwest that the EPA's current proposal will undermine our shared goal of a healthy economy in rural America and abandon the various public policy benefits that flow from the RFS," Iowa officials wrote. "For decades, the agricultural economy lurched from crisis to crisis and farmers often depended on government subsidies to stay afloat. The RFS helped brighten the future of the agricultural and biosciences sectors by providing a stable policy framework that gives value-added opportunities for various agricultural commodities, while helping reduce transportation emissions --- a true win-win ...

"If the EPA's proposed rule stands, consumers across America would be limited in their choices at the pump. When consumers have choices, like they do in Iowa, they choose ethanol and other biofuels."

The National Chicken Council, a staunch opponent of the ethanol industry on the basis that expanded ethanol production and higher corn prices has hurt chicken producers across the country, expressed some support for the EPA proposal in comments Monday.

"NCC would, however, support further reductions in the target level for conventional biofuels for 2015 and 2016 to account for the distorting effects the RFS has on the market for corn, substitute feed products, chicken prices, and food prices in general," NCC President Mike Brown wrote in the comments.

The use of corn for ethanol has "created an uneven playing field for chicken producers," he said in the comments. Brown said since the RFS was enacted in 2007, chicken producers have faced more than $50 billion higher feed costs.

"With both increased required volume obligations in 2015 and 2016, as well as increased ethanol exports, the U.S. chicken industry is again only one supply shock, flood or drought, away from high volatile corn prices as in 2009 and 2012," Brown said in the comments. "Where chicken producers have to adjust production and limit flocks due to corn prices, the RFS protects ethanol producers from having to make the same type of adjustments."

Minnesota Corn Growers Association President Bruce Peterson said in comments submitted Monday the state's 21 ethanol plants have sparked economic revival.

"Ethanol has rejuvenated the rural economy in many parts of our state, leading to better schools, updated infrastructure and vibrant main street businesses," he writes. "For every $1 invested to build a Minnesota ethanol plant, more than $8 has been returned to the economy. Over 11,000 corn farmers grow and supply corn to Minnesota's ethanol industry. Improved corn prices meant more economic activity in rural areas and a ripple effect throughout the entire agricultural economy that had an impact in the Twin Cities and non-farming areas.

"As you can see, a reduction in the (renewable volume) numbers would make an impact far beyond our fuel tanks. It would also result in job losses, reduced air quality and fewer rural economic development opportunities."

Read comments submitted to regulations.gov here, http://tinyurl.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

(CC\SK)


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