E&E news reporter Monica Trauzzi yesterday interviewed Bob Dinneen, President and CEO of the Renewable Fuels Association (RFA). They discussed the future of the Renewable Fuel Standard (RFS). Today’s post will examine one of Dinneen’s answers that is dense with misinformation. Before examining it, though, some basic background may be helpful.
The RFS is a central planning scheme requiring specified volumes of biofuels to be sold in the nation’s motor fuel supply over a 17-year period. As incorporated into the Clean Air Act by the so-called Energy Independence and Security Act (EISA) of 2007, the quota for total renewable fuels increase from 4 billion gallons in 2006 to 36 billion gallons in 2022.
The RFS, however, also authorizes the Environmental Protection Agency to make annual adjustments to the quota (known as Renewable Volume Obligations or RVOs) if the administrator determines there is an “inadequate domestic supply.”
Renewable fuel lobbyists have been castigating EPA ever since November 2013 when the agency, for the first time, proposed to reduce the statutory targets based on the “blend wall” — a set of market constraints limiting the supply of biofuels that can actually be sold to consumers. Although the final RVOs adopted by EPA in November 2015 restored much of the cutbacks proposed in 2013, Dinneen and other renewable fuel lobbyists continue to cry foul and demand that EPA force refiners to buy ethanol at the statutory volumes.
Contrary to popular misconception, the RFS does not expire after 2022. Rather, the Clean Air Act leaves it up to EPA to decide post-2022 targets based on the agency’s assessment of various factors such as the impacts of biofuel production and use on the environment, energy security, and job creation.
Bumper Crop of Misinformation
Monica Trauzzi: So you need the RFS post-2022?
Bob Dinneen: Again, until there is a truly free marketplace. You know, ethanol is not subsidized today. The only liquid transportation fuel that receives a subsidy from the taxpayer is, oh, oil. You know, we’re paying refiners to drill deeper in the Gulf of Mexico and to frack in North Dakota and Texas. We aren’t subsidized. I want to see the renewable fuels industry continue to evolve. I want to see new technologies. I want to see new feedstocks. I want to see us get beyond the 10 percent blend wall. All of that happens if the EPA grows a backbone and implements this program in the way that it was intended to be implemented so that refiners have to invest in the infrastructure to allow E85, to enable E15 to be sold. It’s not that hard.
Dinneen has made those points before, so he’s not speaking off the cuff but presenting a settled position. Time for a fact check. [click to continue…]