US refining group to sue EPA over failed renewable fuels mandate
11/24/2014 12:00:00 AM
The American Fuel & Petrochemical Manufacturers today filed a notice of intent to sue the Environmental Protection Agency (EPA) for failure to issue the 2014 Renewable Fuel Standard (RFS). The required notice under the Clean Air Act is the first step in initiating formal litigation over the agency’s failure to state the annual renewable fuel volumes to the RFS by November 30 of the preceding year, meaning the agency should have finalized the 2014 RFS rule on or before November 30, 2013.
“EPA’s failure to comply with RFS deadlines has caused additional harm to obligated parties, including AFPM members. We urge EPA to take prompt action to promulgate the 2014 standards,” said AFPM president Charles T. Drevna.
“The fact that EPA proposed the 2014 standards over a year ago, and now 2014 is almost over, is another reason why Congress needs to step in and repeal or significantly reform this badly broken program," he added.
In its announcement, the EPA withdrew its proposed standards for renewable fuels use in 2014 while pledging to lay out next-year quotas for 2014-2016.
The news comes after the EPA was nearly a year late in issuing its 2014 requirements for the use of ethanol, biodiesel and cellulosic fuels. The agency delayed action as refiners and producers argued over how much renewable fuel could be blended into the gasoline supply.
The EPA’s proposal has been at the White House for three months awaiting the administration’s approval.
“The Obama administration’s decision to further delay issuing the 2014 Renewable Volume Obligations (RVO) is a gross dereliction of responsibility that leaves fuel refiners and the biofuels industry alike to navigate a course of ambiguity," AFPM's Drevna said in a separate statement.
"Today’s announcement indicates that the administration plans to continuously mismanage this program in a manner that equates to playing Russian roulette with the nation’s fuel supply at the American consumer’s ultimate expense. The administration’s inaction demonstrates once again that the non-functioning Renewable Fuel Standard (RFS) program is irreparably broken. AFPM calls upon Congress to expeditiously resume work on repealing or significantly reforming the RFS. In the meantime, AFPM will seek legal intervention."
The American Petroleum Institute (API) said the decision to "punt" on this year's RFS standards is a clear demonstration to Congress that the mandate has become completely unworkable and must be repealed.
“The rule is already a year overdue and the administration has no intention of finalizing this year's requirements before the year ends,” API president Jack Gerard said. “It is unacceptable to expect refiners to provide the fuels Americans need with so much regulatory uncertainty. This is an example of government at its worst.
“The Renewable Fuel Standard was flawed from the beginning, horribly mismanaged, and is now broken. The only real solution is for Congress to scrap the program and let consumers, not the federal government, choose the best fuel to put in their tanks. Failure to repeal could put millions of motorists at risk of higher fuel costs, damaged engines, and costly repairs.”
Gerard cited a Congressional Budget Office report that predicts higher gasoline and diesel costs under higher ethanol mandates.
Compliance with the mandate is tracked by Renewable Identification Numbers, or RINs, certificates that are attached to each gallon of biofuel. Once blenders mix renewable fuel into gasoline, they can trade the credits.
Shares in refiners rose after reports of the change were reported, while corn-based ethanol RINs fell 7.2% to 52.5 cents.
Additional reporting by Bloomberg
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