By Timothy J. Rudnicki, Esq
On July 24, the new acting administrator for the EPA, Andrew Wheeler said the agency is open to changes sought by the biofuel industry, but only if we make concessions with Big Oil.
“When everyone is complaining about the program, we need to look at ways to change the program,” he said.
Let’s be clear here. There are legitimate complaints from the biofuel industry because Wheeler’s predecessor turned over the agency to Big Oil. How else can you explain the 2.25 billion gallons of ethanol that were lost via the EPA’s RVO waivers to refineries in the last two years?
But more importantly, it’s not Wheeler’s job to set policies and promulgate laws. That responsibility lies with Congress. So with respect to the RFS, his sole job is to implement the law.
Simply put, that means increasing the RVOs to push biofuel producers to make more biofuels, including from greater amounts of cellulosic biomass, and for petroleum refiners and the entire fueling infrastructure to blend increasingly greater amounts of biofuels. That’s his job.
Perhaps he’s doing just what his boss wants: advance the use of more fossil fuels. While the President gives mixed signals as to whether he actually supports the use of ethanol, the White House Energy Plan is crystal clear - promote fossil fuels with no mention of renewable energy or biofuels.
But regardless of what the White House Energy plan states, the RFS is the law of the land.
Wheeler might, however, be challenged to get more biofuels into the marketplace. One of the simplest first steps to rectify that problem is to give E15 RVP parity with E10. While I recognize some thought leaders have already weighed in on this matter, here are a few general ideas about how the RFS actually supports the EPA in granting an RVP waiver to E15.
Starting with 42 USC § 7545, Regulation of Fuels, there is a pathway for the E15 RVP waiver. Subsection (h)(4) specifically addresses the RVP waiver for E10 and has three subparts the EPA uses to determine whether “a distributor, blender, marketer, reseller, carrier, retailer, or wholesale purchaser-consumer shall be deemed to be in full compliance.” One of those parts, (B), goes to the blend of ethanol not exceeding its waiver condition.
What is that singular waiver condition? In 2012, the EPA granted a partial waiver for E15 whereby it was approved for use in all cars 2001 and newer. Keep in mind, approval for E15 was issued seven years after the RFS became law.
Another pathway to obtain RVP parity for E15 is through a Congressional act - an amendment to only the Clean Air Act provision dealing with RVP. Although one party in Washington controls all three branches of government, the Consumer and Retailer Choice Act (Senate 517 and House Resolution 1311) appears to be stalled.
Lastly, the EPA could initiate a rulemaking process. An agency has at least nine factors it may consider to do so and here are a few factors:
New technologies or new data on existing issues: E15 is new relative to E10 when the RFS was signed into law.
Petitions from interest groups, corporations, and members of the public: Ethanol trade associations fall into this category. The rulemaking, however, should be narrowly tailored to specifically address RVP parity for E15. This could be the opportunity to also “fix” section (h)(4) so as to include anticipated higher blends going forward.
Presidential directives: The President could direct the EPA to begin rulemaking. While efforts may have been made in this direction, perhaps this avenue should be reviewed and pushed more aggressively.
By failing to comply with and enforce the law, the EPA has weakened the RFS and created unnecessary confusion and uncertainty for the biofuels and agriculture industries. The agency must take immediate steps to get the RFS back on track. That means holding Big Oil accountable for compliance as well as fixing the RVP problem so greater volumes of ethanol can be used by consumers throughout the year.