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Petroleum Groups Call for Partial Waiver of 'Unrealistic' RFS

Petroleum Groups Call for Partial Waiver of 'Unrealistic' RFS

Petroleum groups file waiver request to cut ethanol mandate to below 10% of gasoline demand next year

Two U.S. petroleum groups Tuesday filed a petition with the Environmental Protection Agency for a partial waiver of the Renewable Fuels Standard, prompting concern from ethanol groups that say the standard prevents the oil industry from creating a monopoly on the fuel market.

The American Petroleum Institute and the American Fuel and Petrochemical Manufacturers in their request argue that the current mandate is "unrealistic," pointing to the potential for the mandate – which requires that 16.55 billion gallons of renewable fuels be produced in 2013 – to create a "blend wall" situation where more renewable fuels are produced than are demanded by the marketplace.

Petroleum groups file waiver request to cut ethanol mandate to below 10% of gasoline demand next year

EPA last week acknowledged the potential blend wall situation, signaling its intention to lower the RFS volumes for 2014, though there was no indication how much lower.

If the agency continues on with its plan to require production of 36 billion gallons of renewable fuels by 2022, that could mean 2014 targets will be as high as 18.15 billion gallons. In their waiver request, petroleum manufacturers say instead that the agency should scale back targets to 14.8 billion gallons.

AFPM President Charles Drevna argued that ethanol has a "corrosive nature" that renders blended fuel incompatible with engines and current fuel infrastructure, and if the RFS mandates aren't relaxed, consumers could pay the price.

"If EPA does not act, the inability to blend the statutory-mandated amount of ethanol could lead to domestic fuel supply shortages and ultimately cause severe economic harm to consumers and the economy," Drevna said.

API's Downstream Group Director Bob Greco said diesel could be at risk also; he estimates the RFS could drive up diesel costs by 300% by 2015, citing a commissioned study by

"Under the current RFS regime, ethanol requirements will continue to increase while gasoline demand continues to decline. That’s why we need a full repeal by Congress," Greco said.

But ethanol advocates dismissed the petroleum lobby's complaints, reinforcing their stance that ethanol serves as an added benefit for consumers through the expansion of choices at the pump.

"We must stop putting our eggs in one basket when it comes to a national energy policy," said Growth Energy CEO Tom Buis. "It is time that oil companies and special interests stop worrying about maintaining their monopolistic practices and allow competition and choice in the marketplace."

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