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Renewable Fuels Group Says 'Don't Mess with the RFS'

Renewable Fuels Group Says 'Don't Mess with the RFS'
American Petroleum Institute calls on Obama Administration to reduce RFS mandates

The American Petroleum Institute Friday called on the Obama Administration to use its waiver power to lower ethanol mandates the group says are "unsafe."

"The ever increasing ethanol mandate has become unsustainable, causing a looming crisis for gasoline consumers," said API Downstream Group Director Bob Greco.

Greco says the required ethanol levels are putting pressure on refiners to produce levels of ethanol in gasoline that could "damage vehicles, harm consumers, and wreak havoc on our economy."

American Petroleum Institute calls on Obama Administration to reduce RFS mandates

Greco's concerns coincide with the energy industry's approach towards the "blend wall" – the point at which required production levels for ethanol will exceed approved blending levels into gasoline.

With gasoline demand has declining in recent years, and ethanol targets rising, API and others say the blend wall is approaching much faster than anticipated. The required volumes of ethanol as set by the RFS must now be added to a smaller-than-expected pool of gasoline, some groups say, predicting that the 10% blend wall may be reached as soon as this year.

API cites an October, 2012, commissioned study by NERA Consulting that found diesel prices could rise by 300% and gas by 30% in the event of a "blend wall" issue.

As a result of API's safety concerns and blend wall argument, the group says the time to repeal the RFS is limited.

"To protect consumers in the near term, EPA has the authority to reduce the mandate now. This would immediately lessen the blend wall problem until Congress can act," Greco said.

RFA not buying it

But the Renewable Fuels Association lashed out at API's charges, noting in a press statement that API's conclusions are "inaccurate."

"Their assumptions are flawed," says RFA President Bob Dinneen. "That (NERA) study ignores the flexibility of the RFS to make it easier for refiners to meet their RFS obligation."

Dinneen said also that the Coordinating Research Council study, which API points to in its comments regarding ethanol safety, has been criticized by the Energy Department.

Additionally, the group said the "blend wall" is "an artifact of oil companies' refusal to embrace renewable fuels."

"All of this fuss is over 400-500 million gallons of additional ethanol blending required by the RFS in 2013—that’s 0.3% of the gasoline market. The E85 and blender pump infrastructure already exists to distribute the small amount of additional ethanol needed in 2013, and there are more than enough flex-fuel vehicles to consume it," RFA said.

Review continues

The House Energy Committee is currently reviewing the Renewable Fuels Standard, engaging agricultural and industry stakeholders in the sustainability of the policy and specifically the blend wall.

The review includes a series of five white papers, each asking stakeholders to weigh in on different issues relating back to the RFS. The committee earlier this month issued part four, asking for comments on general energy policy.

In May, ag groups responded to specific agricultural impacts of the RFS.

Read more about the CRC and the blend wall:
EPA Proposes 2013 Renewable Fuel Standards
Legislators Call RFS Mandates 'Unattainable'
Renewable Fuels Standard, Biofuels Continue to Take Hits
Renewable Fuels Standard Question Isn't Dead
RFS Questioned as Livestock and Ethanol Producers Butt Heads

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