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.
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%)