EPA is more than 15-months behind its statutory deadline (Nov. 30, 2013) for establishing Renewable Fuel Standard (RFS) blending targets for last year.
To recap, in Nov. 2013, EPA for the first time proposed to scale back the government’s overall biofuel blending target for the following year. EPA determined that the statutory target for 2014 would exceed the “blend wall” — the maximum quantity of ethanol that can be sold each year given legal or practical constraints on how much can be blended into each gallon of motor fuel.
The most common blend today is E10 — motor fuel with up to 10% ethanol. Although EPA approved the sale of E15 in October 2010, potentially increasing by 50% the total amount of ethanol sold annually, lack of compatible fueling infrastructure, warranty and liability concerns, and, most importantly, consumers’ natural aversion to paying more for a lower-value product effectively limit the standard blend to E10.
So in Nov. 2013, EPA proposed to trim the statutory target for 2014 from 18.15 billion gallons to 15.21 billion gallons — a 16% cutback. That ignited a firestorm of protest from biofuel interests, and EPA has been dithering ever since.
Biofuel lobbyists such as Renewable Fuels Association CEO Bob Dinneen claim the blend wall exists only because the oil industry has “steadfastly refused” to invest in blender pumps, storage tanks, and other infrastructure compatible with E15-and-higher ethanol blends. Weirdly unexplained is why it’s not up to the biofuel industry to pay for the infrastructure on which its success supposedly depends. The RFS forces the oil industry to buy biofuel, process and add value to it, and create a guaranteed retail market for it. Isn’t that enough?
Not for Dinneen and company. If they had their druthers, Congress would compel oil companies to build biofuel-compatible infrastructure and (as President Obama proposed during his first presidential campaign) mandate that all new cars be flex-fuel vehicles capable of running on blends up to E85 (motor fuel made with 85% ethanol).
But would even that policy wish-list eliminate the growing mismatch between market realities and the RFS production quota schedule, which requires 36 billion gallons of biofuel to be blended and sold by 2022? No.