Governors urge EPA to keep renewable fuel standards intact

2015-06-26 06:08


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Kansas City - A plan to reduce the amount of renewable fuels required in the US petrol supply drew heated condemnation of the petroleum industry on Thursday from two governors who said health of the ethanol industry is vital to their states' economy.

Hundreds of people took turns reading prepared three-minute statements on an Environmental Protection Agency proposal to lower biofuel requirements set by Congress by 15 billion litres this year and 19 billion litres next year.

Thursday's event in Kansas City, Kansas, is the only public hearing the EPA plans before making a decision in November on the renewable fuel standard programme. The EPA says it's reducing the volumes because infrastructure inadequacies limit how much can be consumed and because the industry isn't able to produce enough non-ethanol fuels to meet the requirements.

However, maize growers and other supporters of the higher standard say they're needed to force oil companies to improve infrastructure at petrol pumps to deliver ethanol fuel blends above the current 10% mix.

Iowa Governor Terry Branstad, whose state is the nation's top mize and ethanol producer, and Missouri Governor Jay Nixon both spoke against the standards.

"The EPA has a choice: protect the deep pockets of Big Oil and their monopolistic practices or nurture consumer choice, renewable energy growth and a healthy rural economy," Branstad told a panel of EPA officials.

Chris Grundler, director of the EPA's office of transportation and air quality, said the proposed standards are consistent with Congress' goal of increasing renewable fuel production and use over time, he said.

"Simply setting the standards at levels targeted by Congress and trusting that this will sufficiently incentivise the market to achieve the mandates for 2016 would be irresponsible, and would have significant negative impacts including widespread non-compliance," he said.

The oil industry argues that many retailers aren't equipped to sell petrol containing more than 10% ethanol and that customer demand doesn't warrant the investment retailers would have to make to upgrade their pumps.

"Oil and petrol companies only control about five percent of retail petrol stations. They're the ones who have to make that investment, but the demand isn't there because consumers aren't asking for those fuels," said American Petroleum Institute spokesperson Bob Greco.

Renewable fuel standard

The US has 214 biofuel plants, most of them using corn to make ethanol, with a capacity of nearly 56 billion litres. Iowa, the biggest biofuel producer, has 42 ethanol plants and 13 biodiesel plants.

Environmental groups have argued that ethanol adds to global warming by removing millions of acres of land from the Conservation Reserve Programme for use in maize production and has led to an increase in food costs worldwide as more US maize is used for fuel.

Branstad, a Republican, noted that the price of maize has fallen from $6 a bushel in August 2013 to $3.45 a bushel now. He said the EPA's indecision on the fuel standards has created uncertainty in the market and stifled investment in technologies to deliver biofuels.

Nixon, a Democrat, questioned the EPA's authority to lower the standards.

"The federal RFS [renewable fuel standard] allows a waiver only if it will harm the economy or the environment," he said. "I'm not seeing how it's going to hurt our economy to produce cheaper, better, cleaner fuel, and it's certainly not going to hurt our environment."

Read more on:    epa  |  us  |  biofuels  |  energy  |  environment

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