EPA Misses Own RFS Deadline

STREATOR, Ill. (DTN) -- The Environmental Protection Agency missed its own deadline Friday to finalize 2014 renewable fuel blending requirements under the Renewable Fuels Standard.

The American Petroleum Institute, which has pushed for reduced blending requirements, has criticized the delay in setting the 2014 Renewable Volume Obligation (RVO), while biofuel trade groups continue to push for a higher blending mandate from what the EPA proposed in November 2013.

EPA, the administrator of the RFS, had previously announced that the 2014 RVO for refiners, blenders and importers would be finalized by June 20. In November, EPA proposed reducing volume mandates for this year. The RVO, by statute, is required to be finalized by the end of November of the preceding year.

"EPA is working on the 2014 final standard, and we hope to have it out as soon as possible," EPA said in an email to DTN Friday morning.

Ben Evans, director of public affairs and federal communications for the National Biodiesel Board, told DTN on Thursday the rule won't be finalized for at least another month.

"The EPA still hasn't sent the final proposal back to OMB [the White House Office of Management and Budget] for final review," Evans said.

Evans said after the final rule is sent to the OMB for final review, it typically takes another 30 days.

"So it appears that the final rule won't come out until July at best, and there is some speculation that it will be later than that," Evans said.

An ethanol trade association source on Friday confirmed Evan's statement about a 30-day delay, adding that EPA had not submitted the final RVO to the OMB as of Friday morning.

"While EPA is under pressure from the media and interested parties to get the final RFS rule out soon, it is much more important for EPA to get the final rule done right than to get it done quickly," said Brian Jennings, executive vice president of the American coalition for Ethanol. "We can only trust and hope that the (Obama) administration is taking seriously our feedback that the methodology used to establish the final RFS blending targets needs to be consistent with the statute and hold oil companies responsible for allowing consumer access to higher blends of ethanol."

Evans echoed Jennings' comments about getting the RVO right, even if late.

"At this point it's unclear, but we are urging the administration to finalize the rule as quickly as possible but also to make sure they get it right," Evans said. "What's most important is that they get it right."

The American Petroleum Institute sent a letter to EPA on Wednesday criticizing the agency for delaying the final RVO again this year. The 2013 RVO final mandate was eight months late.

The RFS mandate is scheduled to increase each year until 2022. For this year's RVO, however, the EPA proposed reducing the mandate for 2014 from the statute requirement of 18.1 billion gallons to between 15.0 billion and 15.52 billion gallons.

The largest proposed cut in the 2014 RFS was for the D6 renewable fuel nested category from 14.4 billion gallons stated by statute to 13.0 billion gallons, which would be the first reduction in this category. The nested category is primarily satisfied with corn-based ethanol, which is blended into gasoline. The majority of gasoline in the United States has a 10% concentration of ethanol, referred to as E10.

A combination of lower gasoline demand than forecast in 2007 due in large part to increased mileage efficiency in new vehicles and limitations on increasing the ethanol concentration in gasoline above 10% has prompted confrontation with what is referred to as the blend wall. API and other obligated parties fear the industry is approaching the blend wall -- the saturation point for ethanol in the gasoline pool based on current gasoline standards and consumer preference.

In its November proposal, EPA cited the blend wall as a reason for lowering the RFS mandate.

However, Bob Greco, API downstream group director, told reporters this week API is concerned the EPA would adjust the ethanol mandate above its November proposal because it sees E85 as a "panacea" for increasing ethanol blending volumes. E85 can have up to 85% ethanol blended with gasoline, but can only be used in flex-fuel vehicles.

"That's based on specious reasoning that E85 is a workable solution," Greco said. "Based on consumer demand and vehicle availability, that's not an accurate premise."

He also repeated API's call for repealing the RFS, saying that a majority in the House from both political parties are considering such action.

Myke Feinman can be reached at myke.feinman@dtn.com

(AG/SK)

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