What’s Going On with America’s Gasoline?

The US Environmental Protection Agency (EPA) released a proposal for changes to the Renewable Fuel Standard (RFS) on Friday, November 15, 2013.  The proposal attempts to find the precarious balance between encouraging growth in the biofuels sector and blending more ethanol than some engines can handle safely.

The Renewable Fuel Standard passed in 2007, and, in recent years, the production of biofuels has rapidly increased.  However, gasoline demand did not meet expectations after RFS passed.  The EPA said in a statement, “We are now at the ‘E10 blend wall,’ the point at which the E10 fuel pool is saturated with ethanol.  If gasoline demand continues to decline, as currently forecast, continuing growth in the use of ethanol will require great use of higher ethanol blends such as E15 and E85.”  EPA 2014 RFS Proposal: Industries and Environmentalists React, Conway Irwin, Breaking Energy, November 18, 2013

This proposal decreases the targets for advanced biofuel and total renewable fuel than what is laid out in the Clean Air Act.

Screen shot 2013-11-15 at 4.42.27 PM

Source: EPA

This proposal is viewed as a victory, albeit a conditional one, by refiners.  They say it doesn’t go far enough.  However, it is perceived as a step back in efforts to achieve US energy security and emissions goals by biofuels and environmental groups.

The American Petroleum Institute’s president and chief executive, Jack Gerard expresses concern for American consumers and the reality of cellulosic biofuels, while lauding the EPA’s acknowledgement of the blend wall.

“EPA has acknowledged that the blend wall is a dangerous reality and that breaching it would serious impacts on America’s fuel supply and would be harmful for American consumers.

“While the agency took a step in the right direction, more must be done to ensure Americans have the choice of ethanol-free gasoline for boats and small engines, and to bring their mandates closer to reality on cellulosic biofuels, which do not exist in commercial quantities.

“Congress must protect consumers by repealing this outdated and unworkable program once and for all.” EPA 2014 RFS Proposal: Industries and Environmentalists React, Conway Irwin, Breaking Energy, November 18, 2013

The Brazilian Sugarcane Industry Association’s North American Representative, Leticia Phillips expresses her disappointment that the RFS proposal minimizes the sugarcane ethanol Brazil is prepared to export to the US, and views the decreases as a step back.

“Slashing the 2014 target for advanced biofuels would be a huge step backwards from the Obama administration’s goal of decreasing greenhouse gases and improving energy security.”

“We are surprised and disappointed that EPA’s proposal minimizes the 650-800 million gallons of sugarcane ethanol Brazil is poised to supply to the United States in 2014.” EPA 2014 RFS Proposal: Industries and Environmentalists React, Conway Irwin, Breaking Energy, November 18, 2013

Other groups weigh in on the issue as well.

Novozymes President, Americas Adam Monroe

“The Renewable Fuel Standard was signed into law to break OPEC’s effects on the nation: high oil and gasoline prices, American dollars going offshore and environmental consequences our grandchildren will endure.”

“We cannot put oil’s interests before the nation’s needs. Blending more renewable fuel means more savings for consumers at the pump.”  EPA 2014 RFS Proposal: Industries and Environmentalists React, Conway Irwin, Breaking Energy, November 18, 2013

American Fuel & Petrochemical Manufacturers (AFPM):

“EPA’s recognition of the blendwall and the potential adverse effects on consumers is a welcome step, however greater reductions in the biofuel mandate are necessary if consumers are to avoid all the detrimental impacts of the statute.”

“EPA’s actions can only be short-term in nature and point to the need for Congress to work quickly in addressing the severely flawed and totally outdated Renewable Fuel Standard (RFS). EPA 2014 RFS Proposal: Industries and Environmentalists React, Conway Irwin, Breaking Energy, November 18, 2013

The creators of the Solar Schools project, the Natural Resources Defense Council recognizes the depth and complications inherent in the issue. “There is no denying that the bulk of today’s conventional corn ethanol carries grave risks to the climate, wildlife, waterways, and food security,” said NRDC’s Franz Matzner in a recent blog post . “It is equally true that as a nation we need low carbon, sustainable biofuels to combat climate change and break our addiction to oil.” 

“…developing sustainable, next generation biofuels is complicated.  It’s technically and economically challenging and it’s not going to happen without ongoing course corrections to ensure the explicit goal of the Renewable Fuel Standard is met—namely to move the country away from polluting fuels like gasoline and today’s corn ethanol and toward sustainable, low-carbon alternatives.” Putting Renewable Fuels Back on Track, Franz Matzner

This isn’t an issue of black and white, do or do not.  When the RFS passed in 2007 it set goals for biofuel usage. (36 billion gallons of biofuel, including 22 billion gallons of non-corn biofuel) Putting Renewable Fuels Back on Track, Franz Matzner.  The provisions for the EPA to make ongoing adjustments were Congress’s recognition of the obstacles that would need to be overcome to reach these goals.  No matter which side you come down on, the EPA appears to be following those directives.

Ultimately, to achieve the goals of the RFS, the key will be expanding next generation fuels that can use a diversity of feedstocks guided by a smart set of policies that protect our biodiversity, food and feed supplies, and climate.  To hit the mark, the biofuels program must not require more consumption of a given feedstock than the environment can comfortably support.  Putting Renewable Fuels Back on Track, Franz Matzner

As in most complex issues, there is no easy fix or solution.  That precarious balance has to be maintained, adjustments will have to be made, and a realistic view of the current situation is crucial.  Does this provide that balance?  Is this a step backward?  Does it go far enough?

‘Til next time,

Jessica