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EPA Sets Renewable Fuel Standards below Mandate

Cellulosic volume is lower than the Congressional EISA target.

by on Jul.12, 2010

As always, the devil will be in the final rule details after lobbyists shape the regulations.

The U.S. Environmental Protection Agency (EPA) today proposed that the 2011 percentage standards for the four fuels categories under the agency’s Renewable Fuel Standard program must make up 7.95% of total gasoline sales.

The Energy Independence and Security Act of 2007 (EISA) established annual renewable fuel volume targets, reaching an overall level of 36 billion gallons in 2022 – 16 billion gallons of cellulosic biofuels; 15 billion gallons annually of conventional biofuels; 4 billion gallons of advanced biofuels; and 1 billion gallons of biomass-based diesel.

The 16-billion gallon cellulosic target looks laughable – EPA is projecting that less than 18 million gallons of the fuel will be available in 2011.

As the implications of the act continue to unfold, critics call it a needless subsidy for agri-business, one that would take food out of production.Hence the push for cellulosic since it can in theory be made form non-agricultural crops on land not in food production.

Mandating demand for products that don’t yet exist or haven’t been proven commercially viable or are not cost effective is the height of U.S. Congressional folly, in their view. In addition, a fierce debate about how much some of these fuels actually reduce greenhouse gas emissions is underway.

Almost every gallon of gasoline now sold in the U.S. contains ethanol: 98% as E10 – up to 10% ethanol for conventional autos, and 2% as E85 – 85% ethanol/15% gasoline for use in flex fuel vehicles only. (See How a Bad Bush Administration Energy Policy Begets More Bad Policy?)

Current law and infrastructure preclude the use of greater than 10% ethanol blends in conventional autos although agricultural industry lobbyists are pushing for higher levels. In 2012, the E10 market reaches saturation at approximately 12.5 – 14 billion gallons of ethanol annually. (See President Takes Steps to Boost Biofuels, Coal Use) EPA is considering upping the required amount of ethanol right now,  but isn’t due to rule until this fall.

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Fuelishness?

To achieve the volumes required by EISA, EPA calculates a percentage-based standard for the following year. Based on the standard, each refiner, importer and non-oxygenate blender of gasoline determines the minimum volume of renewable fuel that it must be used in transportation fuel.

The proposed 2011 overall volumes and standards are:

  • Biomass-based diesel (0.80 billion gallons – 0.68%)
  • Advanced biofuels (1.35 billion gallons – 0.77%)
  • Cellulosic biofuels (5 to 17.1 million gallons – 0.004-0.015%)
  • Total renewable fuels (13.95 billion gallons-7.95%)

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President’s Emerging Energy Plan Renews the Renewable Fuel Debate

A taxpayer subsidy to agribusiness could morph into another American War of Independence. But here come the lobbyists.

by on May.12, 2009

A New Jersey political background will help Jackson dealing with the mob of lobbyists.

A New Jersey political past will help Jackson with the mob of lobbyists.

The U.S. Environmental Protection Agency is calling for a science-based review of the four renewable fuel categories that it announced earlier this month under its proposed Renewable Fuels Standard (RFS2). For the first time, some renewable fuels must achieve greenhouse gas emission reductions compared to the gasoline and diesel fuels they displace. Also for the first time, all transportation fuels are covered, not just gasoline. EPA wants to determine if using bio fuels really do decrease greenhouse gas emissions when an analysis is conducted over the entire life of the fuels.

A political struggle is developing with corn-based ethanol producers and soy-based biomass diesel producers whose fuels likely will not meet the proposed tests. EPA has proposed some sort of grandfathering for existing production plants, but has limited the output to existing levels.

From an economic point of view, the current taxpayer subsidies for ethanol make no sense. Now the real possibility exists that some renewable fuels are unhealthy too. For producers and investors in these fuels, billions of dollars are at stake. A public hearing on June 9th will no doubt be lively.

The health issue is only the latest twist in the tortured road the EPA has been on over fuel economy and global warming standards. After a “thorough scientific review” ordered in 2007 by the U.S. Supreme Court, EPA issued a proposed finding in April that said greenhouse gases contribute to air pollution and may endanger public health or welfare. It is now moving ahead in several areas that will affect not only your future driving but the use of any machine that uses fuel.

The proposed RFS2 thresholds for the new fuel categories would be 20% less greenhouse gas emissions for renewable fuels produced from new facilities, 50% less for biomass-based diesel and advanced biofuels, and 60% less for cellulosic biofuels.    (more…)