RFS program not working needs overhaul
WASHINGTON, August 8, 2012 – API Downstream Group Director Robert Greco told reporters this morning that the nation’s renewable fuel standard program isn’t working and needs to be revamped and better managed to ensure its long term viability:
“The RFS program has been the most important mechanism for bringing biofuels into the nation’s energy mix. But it is being undermined by impractical requirements and bad agency decisions.
“The biofuels volume requirements established by Congress will soon push concentrations above the safe E10 level. Volumes will grow from more than 13 billion gallons this year to 36 billion gallons in 2022.
“The RFS program has been the most important mechanism for bringing biofuels into the nation’s energy mix. But it is being undermined by impractical requirements and bad agency decisions.
“The biofuels volume requirements established by Congress will soon push concentrations above the safe E10 level. Volumes will grow from more than 13 billion gallons this year to 36 billion gallons in 2022.
If the RFS is fully implemented, it would raise the per gallon ethanol concentration in gasoline to an average exceeding 20 percent.
“To increase the amount of biofuels blended in gasoline, EPA has approved the sale of E15 for a portion of the nation’s vehicle fleet. It approved E15, even though it knew or should have known of the existence of compatibility problems and even though it knew engine testing was ongoing.
“EPA also has still not resolved the problem of fraudulent renewable fuel credits purchased by some refiners. EPA told refiners the bad credits were the companies’ problem and they’d have to purchase more RINs, potentially adding more costs to making gasoline. This is a problem the agency could have, and should have, fixed by now. Instead, the situation has introduced uncertainty in the RINs market and hurt some smaller biofuels producers.
“Finally, EPA continues the bizarre requirement that refiners blend cellulosic ethanol into gasoline, even though no one is producing any for commercial use. Nevertheless, EPA has ruled that refiners must purchase credits for this non-existent fuel. Requiring refiners to pay for a fuel that doesn’t exist is regulatory absurdity. It drives up costs and does nothing to increase use of biofuels. It may even undermine public confidence in the RFS program itself.”
API represents more than 500 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America’s energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers more than $86 million a day in revenue to our government, and, since 2000, has invested more than $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.
“To increase the amount of biofuels blended in gasoline, EPA has approved the sale of E15 for a portion of the nation’s vehicle fleet. It approved E15, even though it knew or should have known of the existence of compatibility problems and even though it knew engine testing was ongoing.
“EPA also has still not resolved the problem of fraudulent renewable fuel credits purchased by some refiners. EPA told refiners the bad credits were the companies’ problem and they’d have to purchase more RINs, potentially adding more costs to making gasoline. This is a problem the agency could have, and should have, fixed by now. Instead, the situation has introduced uncertainty in the RINs market and hurt some smaller biofuels producers.
“Finally, EPA continues the bizarre requirement that refiners blend cellulosic ethanol into gasoline, even though no one is producing any for commercial use. Nevertheless, EPA has ruled that refiners must purchase credits for this non-existent fuel. Requiring refiners to pay for a fuel that doesn’t exist is regulatory absurdity. It drives up costs and does nothing to increase use of biofuels. It may even undermine public confidence in the RFS program itself.”
API represents more than 500 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America’s energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers more than $86 million a day in revenue to our government, and, since 2000, has invested more than $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.
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