Washington — A series of libertarian groups asked the US Environmental Protection Tuesday to waive the federal biofuel blending mandate for the rest of 2020 in response to plummeting fuel demand.
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The letter by Americans for Prosperity and 23 other groups argued that the 2020 required biofuel blending volumes will "dramatically exceed consumer demand for biofuels, resulting in greater compliance costs, skyrocketing prices for Renewable Identification Numbers, and bureaucratic nightmares."
The 2020 biofuel mandate requires US refiners to blend 20.09 billion gallons of renewable fuel into gasoline and diesel this year, making up 10.97% of the nation's transportation fuel supply.
The groups even said that enforcing the biofuel mandate would divert critical resources away from hand sanitizer production, as ethanol makers have switched some of their output to take advantage of demand for the high-grade alcohol needed for hand sanitizer. However, that new market is not expected to make up for severe losses experienced by the industry.
The governors of Louisiana, Texas, Oklahoma, Utah and Wyoming asked the EPA earlier this month to waive biofuel blending mandates for refiners in their states while they confront plunging fuel demand.
The Energy Information Administration expects US liquid fuel demand to plummet 3.24 million b/d in the second quarter of 2020 to 17.07 million b/d, with gasoline demand hitting levels not seen since the 1960s.
Biofuel groups pushed back against the letter Tuesday, arguing that the Renewable Fuel Standard already provides sufficient flexibility to address the effects of plunging gasoline and diesel demand caused by coronavirus-related lockdowns.
Biofuel groups have said that the requests by the libertarian groups and the five governors ignore the fact that the blending mandate is set as a percentage of gasoline and diesel supplied, meaning it adjusts to lower demand.
"The RFS already provides ample flexibility to adjust with changing conditions in the gasoline and diesel markets," said Geoff Cooper, president of the Renewable Fuels Association, an ethanol trade group. "Waiving the law won't help anyone as long as there's a pandemic and oil price war going on. We need the energy security a robust renewable fuels industry offers now more than ever before."