EPA brief explains decision to reject industry challenge to biofuels rule

The Environmental Protection Agency (EPA) filed a brief Monday explaining its decision to deny a petition that would have exempted refiners from part of a biofuel blending mandate.

The documents filed Monday with the U.S. Court of Appeals for the District of Columbia reveal the reasoning behind EPA's move to shoot down the American Petroleum Institute’s (API) challenge of the renewable fuel standard (RFS). EPA determined that enough advanced biofuels — generally understood to be made from non-food products — existed to meet that portion of the RFS for 2012.

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“EPA reasonably considered the production capacity likely to be developed throughout the year, while API would have EPA rely narrowly and solely on proven past cellulosic biofuel production,” EPA said in its brief. “EPA reasoned that lowering the advanced biofuel volume in these circumstances would be inconsistent with EISA’s [the Energy Independence and Security Act of 2007] energy security and greenhouse gas reduction goals, and decided to leave the statutory advanced biofuel volume unchanged.”

The EPA refused API's request to get out of the RFS in May, inflaming the oil industry group and its Republican allies, who have said the RFS props up an industry that would not otherwise exist. They say EPA requires refiners to blend cellulosic biofuels — those made from non-edible feedstocks, such as yard waste or switchgrass — even though no such biofuels are produced domestically at commercial scale.

EPA's argument for sticking with the RFS target might also play into GOP complaints that the agency is taking an activist approach to regulating carbon emissions.

API has charged in the past that EPA set an aspirational benchmark for cellulosic biofuels with the goal of creating a market, disregarding actual production capacity in the process. In lieu of blending actual gallons to meet that mark, API said that refiners were forced to purchase credits or import cellulosic biofuels to honor that obligation.

The RFS requires refiners to blend 21 billion gallons of advanced biofuels into traditional transportation fuel by 2022. Of those 21 billion gallons, 16 billion must come from cellulosic biofuels.

When Congress expanded the RFS through EISA, it predicted 2 billion gallons of advanced biofuels would be available in 2012. It said 500 million gallons of that would come from cellulosic biofuels.

EPA revised the cellulosic target to 8.65 million gallons this year, but maintained in the court filing that enough other sources of advanced biofuels — such as Brazilian sugarcane ethanol and excess biodiesel — existed to satisfy the larger 2 billion gallon mark.

“[B]ecause EPA estimates that one type of advanced biofuel will not be available in the quantity that Congress anticipated when setting the advanced biofuel applicable volume, EPA must determine whether other types of advanced biofuel will be available to satisfy that shortfall,” EPA wrote, adding that the agency “concluded that other advanced biofuels are likely to be available in sufficient volumes to meet the overall advanced biofuel requirements of the statute.”

In its court filing, EPA said its estimates were based on a “reasonably attainable” amount of cellulosic biofuels for 2012. It argued that the fact it offers credits “means that obligated parties always have the means to comply with the cellulosic standard, and at a cost that is predictable.”


— This story was updated on Aug. 21 at 7:46 a.m. to accurately reflect new information in API's petition against EPA.