Though EPA announced recently it would complete Renewable Fuel Standard volumes for three years in 2015, the agency official who heads the program told a House committee Wednesday she is not willing to say when the volumes for 2014, 2015 and 2016 would be finalized. Some members of the House Government Reform and Oversight Subcommittee on Energy Policy, Health Care and Entitlements pointed to the delay as reason for RFS reform.
Janet McCabe, EPA acting assistant administrator for air and radiation, was asked by members of the committee to account for the delays and what Congress needs to do to help improve the process. Staffing is not an issue, she said, as EPA has three to four full-time staff and at least as many part-time staff assigned to the RFS, including employees at other federal government agencies.
“In the past few years, we have seen more and more challenges to do this,” she said. “We have staff working continually on the program. There is no precise moment when people begin work on a particular standard. In 2014 we faced two issues we had not faced before.”
First, in recent years, the process to determine the new RFS volumes has been especially challenging for cellulosic ethanol and other advanced biofuels, as the agency has had to re-adjust those volumes downward based on actual production, she said. Second, McCabe said, questions about reaching the blend wall this past year pushed the agency to consider an RFS waiver for lack of domestic supply.
“We spend considerable time working with stakeholders trying to make sure we fully understand the implications,” she said.
In many ways, the RFS is caught in a time warp of sorts. When the program was created in 2005 and updated in 2007, there was growing concern about energy security and rising gasoline prices. Now, in 2014, the United States has surpassed Saudi Arabia as the world’s largest oil producer and the ethanol industry has hit the blend wall where total production exceeds the available E10 market.
In the past year, ethanol and oil industry interests have either filed and/or considered legal action against EPA on RFS implementation. McCabe said that pressure has no connection to the delays.
“The issues are the substantive issues I’ve mentioned,” she said. “We want to make sure we are fully working through the issues. We want to make sure we are confident in our legal authority… I can’t give you a date certain. We will move as expeditiously as we can. We are committed to getting these rules out in 2015.”
Rep. James Lankford, R-Okla., said he doesn’t understand why EPA doesn’t appear to have a schedule for completing the RFS.
“What I find unrealistic is you say we don’t have any timelines,” he said. “We’re just asking a simple question — what’s the date?”
McCabe responded, “We’re in the process of getting on schedule.”
In the past couple of years, a number of bills have been introduced to either reform or repeal the RFS. Rep. Jackie Speier, D-Calif., said EPA needs to make a better effort to get the program back on track.
Delays in updating RFS volumes have created uncertainty in a budding cellulosic ethanol industry and have caught the attention of federal lawmakers who believe the law needs fixed.
“I don’t believe we should throw it away (the RFS),” Speier said. “But EPA has to do a better job if the RFS is to meet its goals. EPA must acknowledge it cannot continue with delays… I would really encourage you to provide us with a document that spells out what you need to do your job because it’s not getting done. We want this law to work. It’s not. The 20 or so bills are going to gain traction.”
RFS NOT BROKEN
Biotechnology Industry Organization President and Chief Executive Officer Jim Greenwood said in a statement that EPA’s delay in finalizing RFS volumes doesn’t mean the program is broken.
“EPA’s failure to issue a final 2014 RFS rule and other ongoing administrative delays are being misconstrued by some in Congress as a sign that the program is broken,” he said. “Nothing could be further from the truth. The underlying program has worked as intended to spur innovation and growth in the biofuels space, reducing our reliance on foreign oil along with greenhouse gas emissions.
“The RFS works for companies that invest in, build and start up new advanced and cellulosic biorefineries here in the United States. This year, several new, large-scale cellulosic biofuel facilities began operations. The cleaner, smarter transportation fuel future we have hoped for is here.
“Unfortunately, EPA’s ongoing delays have chilled investment and financing of future projects, even as first-of-a-kind cellulosic biofuel plants start operations. The agency’s attempt to change the program to benefit the oil industry was unwarranted… Our hope is that Congressional oversight will result in greater regulatory efficiency by EPA in managing the RFS program.”
Tom Buis, chief executive officer of Growth Energy, said in a statement that EPA needs to stick to the law as written.
“While the delay from the EPA is frustrating to stakeholders and Congress alike, it is important that the EPA get their methodology and the final RFS numbers for 2014 right,” he said. “The EPA’s proposed rule was flawed from the beginning. There was no way the methodology in the proposed rule would ever work, as it went against the very purpose and policy goals of the RFS.
“I encourage the EPA to act swiftly to produce a final rule that ensures that the methodology allows our industry to move forward and invest in the additional production of biofuels, which will help grow an American industry that creates jobs, reduces our dependence on foreign oil and fossil fuels, reduces carbon pollution and creates new economic opportunities all over the country.”