EPA Sends RFS to OMB

OMAHA (DTN) -- The Environmental Protection Agency sent the final Renewable Fuel Standard to the Office of Management and Budget on Friday, triggering a broader review of the proposal that could trim as much as 3 billion gallons of mandated biofuels production from the RFS.

The EPA received hundreds of thousands of comments on the proposal and during the past year there has been ongoing speculation about whether the agency would back off its proposed cut. EPA Administrator Gina McCarthy indicated in recent months that public outcry led the agency to take a closer look at its proposal. Some members of Congress, including Sen. Al Franken, D-Minn., said agency officials likely would not cut the RFS as deeply as proposed.

An EPA spokeswoman confirmed to DTN Friday that EPA forwarded the proposal to the White House Office of Management and Budget.

"Today, the 2014 RFS final standards were submitted for interagency review," the statement said. "Biofuels are an important part of our all-of-the-above energy strategy, helping to curb our dependence on foreign oil, cut carbon pollution and drive innovation. After an extensive public outreach process, we've received 340,000 comments that will help inform our final determinations. EPA will issue a final rulemaking after the interagency review process has been completed.

"EPA supports the energy independence and security goals that Congress envisioned when establishing the RFS program. The agency's overarching goal is to put the RFS program on a path that supports continued growth in renewable fuels over time."

EPA offered the proposal to reduce the RFS in response to oil industry concerns that the cellulosic and advanced biofuel industries were not producing enough fuel to meet the mandate. Petroleum blenders also argue ethanol infrastructure is not adequate to handle corn-based biofuel volumes originally set in the law for 2014.

The corn-based portion of the RFS was capped at 15 billion gallons. Even if EPA changes the law, corn-based ethanol will continue to find markets beyond the E10 blend wall, perhaps through export channels. The blend wall is when total ethanol production exceeds the available U.S. market -- in this case E10.

The original EPA proposal would cut the corn-based ethanol mandate from 14.4 billion gallons to 13 billion gallons in 2014. The proposal also includes cuts to cellulosic ethanol, advanced biofuels and biodiesel.

Anne Steckel, vice president of federal affairs for the National Biodiesel Board, said in a statement Friday that the biodiesel industry continues to suffer from the RFS delay.

"The original EPA proposal and continued delays have severely disrupted the U.S. biodiesel industry this year," Steckel said. "We can begin to reverse that damage with a meaningful increase in the biodiesel volume that is finalized as quickly as possible so that producers can ramp up production in a timely fashion."

Biodiesel is the first and only commercial-scale fuel produced in the U.S. to meet the EPA's definition as an advanced biofuel. This means EPA has determined biodiesel reduces greenhouse gas emissions by more than 50% when compared to petroleum diesel.

In a draft RFS proposal released in November 2013, EPA proposed holding biodiesel volumes at 1.28 billion gallons. The industry produced nearly 1.8 billion gallons.

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

Follow Todd on Twitter @toddneeleyDTN

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