Fuel Standard dominates law and regulation meeting discussions
The U.S. Environmental Protection Agency’s Renewable Fuel Standard (RFS) was a hot topic of discussion at the sixth annual Energy Biosciences Institute Biofuels Law and Regulation Conference, held at the University of Illinois on May 2.
About 70 attendees from eight states heard from 13 stakeholders in the biofuels industry, including fossil fuel executives, farmer representatives, and research faculty.
The RFS is a regulatory regime that requires obligated parties in the petroleum industry to commercialize specified volumes of biofuels each year, according to EBI researcher Tim Slating, who moderated the conference.
In recent years, gasoline consumption has declined in the U.S. which, when coupled with the fact that most vehicles are only warrantied to run on 10 percent ethanol (E10), makes it difficult to comply with the standard. It's only a matter of time before we reach the blend wall, or the point at which the total U.S. gasoline supply is saturated with E10, according to Slating. In fact, some commentators would contend that the blend wall has already been reached.
“The RFS, which has helped the development of the biofuel industry, is under political attack, and for the first time in its existence, the EPA has proposed to reduce its renewable fuel mandate,” said Isaac Cann, Deputy Director of the EBI, in his opening remarks. “Sound biofuels policy is essential to this emerging and important industry, and if existing policies are deemed inadequate, they must be re-engineered and re-imagined.”
In 2013, the RFS requirement for cellulosic biofuel was revised from one billion to six million gallons. This year, the cellulosic biofuel mandate is expected to drop from 1.75 billion to 17 million gallons. But, as it stands today, the RFS total requirement for renewable fuel should rise to 36 billion gallons of renewable fuels in 2022.
Conference attendees heard multiple viewpoints on how the EPA should address the RFS going forward. Some want to salvage the RFS through legislative amendments and widespread reductions, whereas others believe Congress should scrap the current regulatory system and start over. Everyone agreed that government inaction is not an option.
“We need to adjust the RFS to save the RFS,” said John Reese, the Downstream Policy & Advocacy Manager for Shell. “The EPA must use its waiver authority to adjust the mandates. Congress must revise the RFS to levels compatible with infrastructure and vehicles, and to provide appropriate incentives for cellulosic biofuels.”
Steve Hartig, the General Manager of Licensing at POET-DSM Advanced Biofuels, proposed changing the infrastructure rather than the law.
“The high octane of E20-E40 blends have been shown in multiple studies to provide high fuel economy and to contribute positively toward emissions standards, while providing a safe, renewable fuel,” Hartig said. “We need to future-proof our fueling infrastructure by installing blender pumps as fuel station pumps are replaced, and give consumers a choice. Car companies need to take the lead in showing the path forward.”
Regardless, Jay Kesan, a professor of law at Illinois and EBI Project Leader who also organized and moderated the conference, believes that stakeholders will take this issue to court. “It is fairly clear that there is going to be one or two lawsuits that are going to follow. The EPA's actions setting the 2014 targets are virtually guaranteed to result in some subsequent litigation,” he said.
“I think the takeaway message is that this is a rather significant year in light of the EPA’s renewable volumetric obligations in 2014,” Kesan said. “With three large cellulosic ethanol plants coming online in just a few months, we are poised on the regulatory front and on the technological front in ways that we've never seen before in the second generation biofuels industry.”
Speakers at the conference also included Chandler Goule, Senior Vice President of Programs for the National Farmers Union; Leo Goff, Program Manager for the CNA Military Advisory Board; and Jeremy I. Martin, a Clean Vehicles Program Senior Scientist for the Union of Concerned Scientists.
For more information about the conference, including video and slide presentations, visit http://www. biofuellawconference.org/ and mark your calendar for the seventh annual conference on May 1, 2015.
This article originally appeared on the Energy Biosciences Institute Spring 2014 newsletter.