Sunday, December 8, 2013

Feds to get earful on renewable fuels

A handful of corn is shown before it is processed at the Tall Corn Ethanol plant in Coon Rapids, Iowa. (AP file photo/Charlie Neibergall)
WASHINGTON — A summit Thursday on the nation’s renewable fuels policy is set to draw a crush of farmers, politicians, engineers and oil industry lobbyists all eager to criticize an Obama administration plan to slash federal biofuels quotas.
All told, at least 144 people are expected to testify during the daylong Environmental Protection Agency hearing in Arlington, Va., with hundreds more watching on the sidelines.
Some want the EPA to hike its proposed biofuels quotas for 2014 and force refiners to incorporate more ethanol and other renewable products into the nation’s gasoline supply. Others representing the oil industry, boating interests and poultry producers insist that the agency needs to push the quotas even lower — and that Congress should make more fundamental changes to the underlying eight-year-old renewable fuel mandate.
Agriculture concerns
Few are expected to cheer on the EPA’s November proposal to cut the amount of renewable fuel required for 2014 to 15.2 billion gallons, some 3 billion gallons below what federal law requires. A final decision is expected next spring.
Iowa Gov. Terry Branstad is set to tell the EPA panel that the agency’s quota cuts could devastate rural America. Oil refiners now satisfy the vast majority of the renewable fuels mandates by incorporating corn-based ethanol, even though Congress envisioned advanced biofuels made with other materials would eventually consume more of the market.
“I know what can happen when you have an agriculture depression, and we don’t want to go back and revisit that,” Branstad told reporters on Wednesday. “The decision the EPA is going to make will have dramatic implications on the economic viability of communities all across this Midwest agricultural heartland.”
Blend wall
Charles Drevna, president of the American Fuel and Petrochemical Manufacturers, insists that the government must lower the mandate even further, keeping it at roughly 9.7 percent of the fuel supply. Any higher, Drevna said, and the industry hits a blend wall, where they can no longer mix in enough ethanol to meet the mandate’s volumetric targets and still produce a 0 percent ethanol product for some consumers without exceeding the 10 percent threshold acceptable for use in all cars and trucks.
“The vast majority of existing vehicles and infrastructure cannot handle a gasoline supply containing more than 10 percent ethanol,” Drevna told reporters on a conference call. “The blend wall is here, which is why action to stem the growth of the mandate is critical.”
Biofuel bankruptcies?
Advanced biofuels industry representatives said the EPA proposal threatens the viability of companies seeking financing for new factories. The EPA’s plan for 2014 is to mandate 2.2 billion gallons of advanced biofuel, including 17 million gallons of cellulosic supplies. Cellulosic fuels were not produced in commercial quantities last year, but advanced biofuel producers say the government mandate — which federal law dictated to be 3.75 billion gallons in 2014 — is critical to luring capital for new manufacturing facilities.
“The United States government has changed their commitment to me,” said Stu Lamb, president of Viesel Fuel LLC, which is building a biodiesel plant in Florida. “When I signed these (lending) documents, I had an implied cosigner in the renewable fuel standard. … I had an implied partner, but the partner is gone.”
“Without the RFS program, we face bankruptcy, and I may have to put 45 people out of work,” Lamb said.
A draft agenda for Thursday’s hearing is here. Follow FuelFix reporter Jennifer Dlouhy for live tweets during the hearing.
Syndicated from Fuel Fix

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