While the Environmental Protection Agency has said 15 percent ethanol is safe for cars, a leaked proposal by EPA shows to supports scaling back biofuel blending requirements to 10 percent next year, a move that's good news for oil refineries and bad news for proponents of biofuels, who "have argued for years that the blend wall is
largely a fiction constructed by an oil industry that doesn't want to
cede any more share of a shrinking U.S. gasoline market," Cezary Podkul reports for Reuters. Most car warranties only cover up to 10 percent ethanol, and most service stations don't sell the 15 percent blend for fear of legal risks.
"If approved, the proposed cut in the biofuel mandate in 2014 to 15.21 billion gallons from 18.15 billion would mark an historic retreat from the ambitious 2007 Renewable Fuels Standard law that charted a path toward ever-greater use of clean, home-grown fuel, which the biofuel industry counts on to underpin bank loans and new factories," Podkul writes. There are already threats of lawsuits. Bob Dinneen, president of the Renewable Fuels Association, an industry group, told Podkul, "Let me be clear: any plan to roll back the targets ... under the guise of addressing the blend wall would be patently unlawful."
The EPA is standing behind a 2007 Congressional general waiver built into the law that allows the agency to reduce ethanol volume "if enforcing the law were to cause economic hardship; or if it were simply not feasible due to 'inadequate domestic supply'," Podkul writes. While ethanol supply is not a problem, last year's drought "prompted a waiver petition from several state governors and food producers concerned about the soaring price of corn, the main ingredient for domestic ethanol production. EPA denied the request. This year, with the blend-wall concerns forcing a jump of almost 2,800 percent in the cost of credits used to enforce the ethanol mandate, the agency itself is proposing for the first time to use a waiver, citing a lack of usable fuel." EPA says in its draft proposal, "We interpret the term 'inadequate domestic supply' as it is used under the general waiver authority to include consideration of factors that affect consumption of renewable fuel." (Read more)
"If approved, the proposed cut in the biofuel mandate in 2014 to 15.21 billion gallons from 18.15 billion would mark an historic retreat from the ambitious 2007 Renewable Fuels Standard law that charted a path toward ever-greater use of clean, home-grown fuel, which the biofuel industry counts on to underpin bank loans and new factories," Podkul writes. There are already threats of lawsuits. Bob Dinneen, president of the Renewable Fuels Association, an industry group, told Podkul, "Let me be clear: any plan to roll back the targets ... under the guise of addressing the blend wall would be patently unlawful."
The EPA is standing behind a 2007 Congressional general waiver built into the law that allows the agency to reduce ethanol volume "if enforcing the law were to cause economic hardship; or if it were simply not feasible due to 'inadequate domestic supply'," Podkul writes. While ethanol supply is not a problem, last year's drought "prompted a waiver petition from several state governors and food producers concerned about the soaring price of corn, the main ingredient for domestic ethanol production. EPA denied the request. This year, with the blend-wall concerns forcing a jump of almost 2,800 percent in the cost of credits used to enforce the ethanol mandate, the agency itself is proposing for the first time to use a waiver, citing a lack of usable fuel." EPA says in its draft proposal, "We interpret the term 'inadequate domestic supply' as it is used under the general waiver authority to include consideration of factors that affect consumption of renewable fuel." (Read more)
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