Petroleum groups ask EPA for relief from biofuel mandate

Created in 2005 and expanded two years later, the rule calls for blending 36 billion gallons of biofuel into traditional transportation fuel by 2022. It’s at the center of an intense lobbying and political fight that’s drawing attention on Capitol Hill.

The EPA acknowledged last week that refiners could approach the “blend wall” in meeting the federal biofuel-blending mandate’s accelerating targets. It said it would consider tinkering with the requirements for next year to accommodate those concerns.

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That term refers to the point at which the oil industry says refiners would need to produce gasoline with higher ethanol concentrations than the market-standard 10 percent mix.

In their formal waiver request, the groups asked the EPA to lower the Renewable Fuel Standard’s blending requirements to below 10 percent of gasoline to avoid the blend wall.

Honoring the waiver would eliminate 3.35 billion of the 18.15 billion gallons of corn-based ethanol called for in 2014, providing “short-term relief” from the rule, said Bob Greco, API downstream group director, in a statement.

The petroleum industry and automakers have warned fuel blends with a 15 percent ethanol concentration, known as E15, could damage car engines. They also say tankers and gas stations don’t have the infrastructure to support the fuel.

The biofuel industry has rejected those claims. It contends that E15 is safe, noting that the EPA has approved E15 for use in cars made in 2001 or later.

Biofuel groups pushed back against the waiver request, saying that it was designed to protect the profits of oil producers and refiners.

“The actions by API and AFPM are designed with one goal in mind — to eliminate any competition from clean, green biofuels in the liquid transportation fuels marketplace,” Tom Buis, chief executive of corn ethanol group Growth Energy, said in a Tuesday statement.

The EPA has so far rejected all previous Renewable Fuel Standard waiver requests, which have centered on the corn-based ethanol that dominates the biofuel market.

Last year, poultry and meat producers failed to secure a waiver when they argued the mandate was pushing corn prices upward and harming their businesses. And several state governors also unsuccessfully lobbied the EPA for relief on those grounds.

The waiver requests are just one example of how the mandate has come under fire in Washington, D.C.

The House Energy and Commerce Committee has pledged to overhaul the rule, saying that the mandate’s goals are unrealistic.

Corn-based ethanol has kept pace with original projections, but many next-generation biofuels have fallen well short of the marks Congress laid out when it expanded the mandate 2007.

Many lawmakers also say the intent of the law — to wean the U.S. off foreign fuels and drive down greenhouse gas emissions — can be accomplished with domestically produced natural gas and oil discovered since the rule was last updated.

But biofuel groups contend next-generation biofuels are just starting to come online in commercial quantities. They say changing the mandate would threaten economic development in rural communities that have come to depend on the biofuel industry.

— This story was updated at 2:56 p.m. on Aug. 14.

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