Obama administration cuts 2014 biofuel mandate

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The Obama administration proposed on Friday to slash federal requirements for U.S. biofuel use in 2014, partially bowing to pressure from the petroleum industry and attempting to prevent a projected fuel crunch next year.

The Environmental Protection Agency proposed to cut overall use of renewable fuels - made mostly from U.S. corn and to a lesser extent from soybeans, grasses, crop waste and Brazilian sugar cane - to a range of 15 billion to 15.52 billion gallons.

With that range the agency proposed a goal of 15.21 billion gallons, which is more than 16 percent less than the previous 18.15 billion gallons contained in the law that governs the Renewable Fuel Standard (RFS), and below the 2013 level of 16.55 billion gallons.

The proposed goal matches the number in a draft that was leaked and circulated in October.

The EPA's proposal to reduce the renewable fuels targets is a partial win for the petroleum industry but a loss for biofuel producers, and followed a prolonged lobbying blitz on both sides of the issue.

The plan follows the agency's warnings that the country was approaching a point when the RFS would require the use of more ethanol than can be blended into gasoline at the 10 percent level that dominates the U.S. fueling infrastructure.

Refiners have said this impending "blend wall," if left in place, would force them to export more fuel or produce less gasoline, leading to shortages and higher prices at the pump.

U.S. gasoline demand had been expected to rise every year when Congress passed the Renewable Fuels Standard in 2007, but it peaked in 2008 and has been anemic since - partly because fuel efficiency of U.S. cars and light trucks has risen.

"This unanticipated reduction in fuel consumption brings us to the point where the realities of the fuel market must be addressed to properly implement the program," a senior administration official told reporters in a teleconference about the proposal.

The EPA's proposal falls short of a request from two major oil and gas trade groups to lower the 2014 renewable fuel use target to 14.8 billion gallons.

The plan cuts the 2014 advanced biofuel use target to a range of 2.0 billion to 2.51 billion gallons.

The agency did not propose a specific 2014 volume for ethanol made from corn.

But the proposed change in advanced biofuels implies a corn ethanol mandate of 12.7 billion to 13.2 billion gallons down from the previous 2014 mandate of 14.4 billion gallons.

Chicago corn futures fell to new lows for the day, down 1.1 percent at $4.21-3/4 per bushel, although the impact was muted because Friday's announcement was similar to the leaked proposal from October. Prices this month hit their lowest point in more than three years.

The EPA expects to release a final rule next spring after a 60-day public comment period.

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james herman    
usa  |  November, 15, 2013 at 04:40 PM

.........good. they should have shanked the entire ethanol scam. it's nothing more than an off budget per bushel farm subsidy.........78,000btus of energy input to get a gallon of corn ethanol that only has 74,000 is no way to run a country..........'bout time the great American farmer faced the same competitive music as most everyone else in the country..........but they think they're "entitled" to it...........poor chuck Grassley the rino republican from iowa that farms 4000 acres of corn ground must really be....peeved.

Jim Williams    
Iowa  |  November, 18, 2013 at 04:21 PM

James, You may want to check your information a little closer. Your numbers aren't even close to correct. First off, by the mid 2000's it only took 34,000 BTUs to make a gallon of Ethanol that at 100% purity has 76,100 BTUs. Secondly, the governments demand for a volumetric standard was ridiculous. Especially when you consider they projections for fuel usage were wrong right from the start. But, since when was the government correct about much of anything. Keep this in mind also. the Mandate was part of the 2005 Energy Policy Act introduced by Rep. Joe Barton (R-TX) in a House Bill and modified by the Energy Independence and Security Act of 2007 introduced by Rep. Nick Rahall (D-WV), also a House Bill. Both of which passed with votes from both sides of the isle and from states that don't raise a lot of corn.

Fred Knell    
Kansas  |  November, 18, 2013 at 04:56 PM

Just when I thought Obama couldn't get any dumber, he totally out does himself! Petroleum advocates can spout off 30 year old statistics and claim all the benefits of ethanol go to rich millionaire farmers. In reality our small towns and businesses have benefited greatly by the development of the ethanol industry. Rather than sending our energy dollars to Saudi Arabia we are helping our country provide for its own energy needs. America's ag industry is one of the strong pillars of our economy, and we all benefit from this. Please Obama do something right in your presidency!

Martin Ohio  |  November, 20, 2013 at 12:47 PM

Our government apparently doesn't realize what renewable fuels bring to the table. When the ag economy is good farmers buy rolling stock which supports a lot of labor in this country and by the way what is wrong with the US farmer doing well versus having to rely on foreign oil? Apparently the petroleum industry isn't able to line our politician's pockets as well with renewable fuel in the picture.

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