Energy producers spar over ethanol mandate

Energy sector business groups locked horns Monday over the Obama administration’s latest proposed ethanol mandate, in a battle pitting fossil fuels against renewables.

{mosads}The oil industry, along with other organizations that oppose the mandate, told the Environmental Protection Agency (EPA) that its plan to ramp up ethanol blending into gasoline relies on an overly rosy view of the market and demand for the corn-based fuel.

The ethanol industry and its allies lashed back in comments filed with the EPA on the final day for formal submissions, saying the EPA is obligated under the Renewable Fuel Standard to increase the blending requirements even further than agency is proposing.

The back-and-forth was just the latest wrangling between pro- and anti-ethanol interests trying to influence how the EPA implements a 2007 law that imagined a larger market for gasoline — and more room for ethanol — than what has panned out.

The American Petroleum Institute (API) and the American Fuel and Petrochemical Manufacturers joined together for their comment filing blasting the EPA.

“The overarching problem with this regulation is that EPA’s assumptions of growing demand for high-ethanol fuel blends are simply wrong,” Bob Greco, the API’s director for downstream operations, told reporters Monday in a preview of the groups’ submission, which they planned to file later in the day.

“High ethanol blends, such as E15 and E85, that EPA is pushing are not compatible with most cars on the road today, and they could potentially put American consumers and their vehicles at risk,” he said.

Greco accused the EPA of severely overstating the market for E85 — a blend of 85 percent ethanol and 15 percent petroleum-based gasoline — and understating the demand for ethanol-free gasoline.

“EPA made overly aggressive assumptions about the amount of ethanol that can be used in the marketplace,” said Brendan Williams, executive vice president of the refiners’ group.

The main concern of the oil industry is that blending ethanol or buying credits from other companies can be expensive.

Ethanol interests, meanwhile, accused the EPA of improperly ignoring the ethanol volumes that Congress set, instead using a waiver system built into the law.

“By adopting the narrative of the oil industry with regard to how much ethanol can be blended into gasoline, EPA has unnecessarily and illegally curtailed the unprecedented evolution occurring in the transportation fuels market that was delivering technology innovation, carbon reduction and consumer savings,” the Renewable Fuels Association wrote to the EPA.

Fuels America, a coalition of various companies involved in different ethanol production activities, delivered more than 200,000 comments from individuals supporting a strong mandate to the EPA’s headquarters in Washington, D.C.

The agency proposed in May to require oil refiners across the country to blend 17.4 billion gallons of renewable fuels such as ethanol and biodiesel into their traditional gasoline and diesel, with up to 14 billion gallons coming from standard ethanol from feedstock like corn and soybean.

The EPA also proposed to set 2014 and 2015 renewable mandate levels at 15.93 billion gallons and 16.3 billion gallons respectively, based on the actual and expected volumes at which refiners actually used the fuels. The levels should have been set before each of those years started.

As of Monday afternoon, the EPA had received and processed nearly 48,000 comments from stakeholders, individuals, lawmakers and others on the proposal.

After reviewing the comments and making necessary changes, the EPA plans to set a final mandate by Nov. 30, the deadline set out in the law.