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US lawmakers warn EPA official of RFS repeal if repeated delays continue

Highlights

Despite warnings from lawmakers that continued delays to the Renewable Fuel Standard could give momentum to efforts to reform or repeal the law, a top US Environmental Protection Agency official on Wednesday declined to say when the 2014, 2015 or 2016 rules would be issued beyond a vague pledge to complete them in the next year.

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"We will move as expeditiously as we can," the EPA's acting air chief, Janet McCabe, testified before a House of Representatives oversight subcommittee. "We are committed to getting these rules out in 2015 and meeting our deadline for the 2016 [RFS]."

But that did not assuage lawmakers from both parties, who repeatedly pressed McCabe to give a timeline on when the 2014 rule would be finalized and when the 2015 and 2016 rules would be proposed.

By statute, the EPA is supposed to have each year's RFS finalized by November of the previous year, making the 2014 rule more than a year late and the 2015 rule overdue, as well.


"I can't give you a date certain," McCabe said. "My goal is to have these done as quickly as we can."

"That's gibberish," responded Representative Jackie Speier, Democrat-California. "You've got to have a goal that we can hang our hats on. Maybe Congress should issue a rule to repeal the [RFS]. I don't think we're asking for a lot here."

"You cannot take that long to promulgate a rule," added Representative James Lankford, an Oklahoma Republican who chaired the hearing.

McCabe acknowledged that the EPA's lateness in promulgating the annual biofuels blending mandate every year has caused heartburn and "exacerbated uncertainty" among market participants. But the only timeline she would give was that the agency aims to have all three years' rules finalized by the November 30 deadline to finalize the 2016 rule.

"I want to emphasize that our intention is to put the annual standard setting process back on schedule," McCabe testified. "We will take this opportunity to set standards for 2015 and 2016 so that the RFS program can continue to spur growth and provide greater certainty to investors and other market participants."

US refiners group American Fuel and Petrochemical Manufacturers has already announced its intent to sue the EPA over its delay in setting the 2015 RFS.

The group, calling the RFS "unworkable," has said that repeal of the RFS is among its top priorities for Congress when it reconvenes next year with Republican majorities in both the House and the Senate.

The EPA in late November said it was punting the final 2014 rule into next year, saying it was still reviewing the hundreds of thousands of comments it received on its proposed rule, which to the dismay of biofuels producers cut for the first time the biofuels mandate.

The RFS requires the EPA to set an annual target volume of biofuels to be blended into the US transportation fuel pool.

McCabe said the EPA has struggled to issue the mandate every year, as cellulosic biofuels have yet to ramp up to production levels envisioned by the statute and fueling infrastructure has yet to allow significant quantities of higher ethanol blends, such as E15 and E85, to be sold.

"Resolving the fundamental issues that we are facing as part of the 2014 standards rulemaking should go a long way to enabling EPA to complete annual rulemakings on time," she said.

For 2014, the EPA proposed in November 2013 a biofuels blending mandate of 15.21 billion gallons, down from 16.55 billion gallons in the 2013 rule, leading the biofuels industry to warn of plant closures and layoffs.

Supporters of the RFS have said the mandate boosts US energy security by promoting homegrown renewable fuels while lowering US consumption of fossil fuels.

But the oil industry has complained that advanced biofuels, especially cellulosic ethanol, are not available in commercial quantities to satisfy the mandate. And it has said the cost of renewable credits, called RINs, used to demonstrate compliance with the RFS, is too burdensome.

The 2014 proposal also called for 2.2 billion gallons of advanced biofuels, down from 2.75 billion gallons in the 2013 rule; 1.28 billion gallons of biodiesel, same as the 2013 rule; and 17 million gallons of cellulosic biofuels, up from 6 million in the 2013 rule.

--Herman Wang, herman.wang@platts.com
--Edited by Annie Siebert, ann.siebert@platts.com