Crop associations upset with EPA reducing RFS
According to a news release from NBB, the U.S biodiesel industry is supporting more than 62,000 jobs and $2.6 billion in wages in 2013, with production on pace for a record of 1.7 billion gallons. The industry is the largest producer of EPA-designated Advanced Biofuel in the nation.
The Advanced Ethanol Council also expressed its disappointment in the proposed 2014 required volume obligation (RVO) for the RFS.
“While only a proposed rule at this point, this is the first time that the Obama Administration has shown any sign of wavering when it comes to implementing the RFS,” said Brooke Coleman, executive director of the Advanced Ethanol Council (AEC). “EPA is in the right ballpark for cellulosic biofuels, and we are confident that the final number will be the right one for the industry in 2014. But bigger picture issues must be resolved in the final rule because advanced biofuel investors also pay attention to the big picture.”
The Council pointed to unnecessary reductions to the advanced biofuel pool, unfounded concern about imaginary blend walls, and not enough faith in the mechanics of the RFS program among certain Administration officials as the primary issues that need to be resolved during the comment period.
“What we’re seeing is the oil industry taking one last run at trying to convince administrators of the RFS to relieve the legal obligation on them to blend more biofuel based on clever arguments meant to disguise the fact that oil companies just don’t want to blend more biofuel. The RFS is designed to bust the oil monopoly. It’s not going to be easy,” added Coleman.
The Renewable Fuels Association issued its statement, “Despite its lack of statutory authority to do so, EPA proposed cutting the RVO for conventional renewable fuel from the statutory level of 14.4 billion gallons to 13.01 billion gallons. If finalized, this cut of 1.39 billion gallons would have severe economic and environmental consequences ...
“Cutting ethanol consumption by 1.39 billion gallons will increase demand for gasoline by 948 million gallons. According to Louisiana State University, that bump in demand for gasoline will increase gasoline prices by 5.7 cents per gallon across the board. As a result, American drivers will spend $7.6 billion more on gasoline purchases in 2014. Further, oil refiners will keep $2.5 billion in their pockets though avoided purchases of ethanol, while also saving roughly $300 million on infrastructure investments. It all adds up to a $10.3 billion windfall for Big Oil.”
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