Biofuel Industry Presses White House To Strengthen Renewable Fuel Program

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By Andy Tully for Oilprice.com

The White House is expected to issue goals soon for the country’s use of renewable fuels during 2014 and its coming under pressure from the biofuels industry and some Democratic senators to set higher long-term objectives.

The Renewable Fuel Standard calls for gradually raising the proportion of biofuels mixed in with gasoline and diesel fuel every year through 2022. The Environmental Protection Agency (EPA) is expected to increase the amount of corn ethanol to about 13.6 billion gallons from the current level of 13 billion gallons set in November 2013.


But biofuel industry officials say the EPA’s longer-term plans are to limit the rate of increase in subsequent years. Companies including Abengoa Bioenergy, Green Plains Inc. and Pacific Ethanol Inc. say that smaller increases could threaten the long-term health of the biofuel industry.

One problem is that for more than two years, more than 35 applications for new energy sources have been waiting for a decision by the EPA as to whether they qualify for biofuel status. This prevents potential customers from obtaining the credit they need to buy these products. Complicating matters is that corn growers have been pressing the White House to maintain their crops’ protected status as a biofuel.

Corn-based ethanol provides only a 20 percent emissions improvement over unblended gasoline and some environmental groups say that’s an inconsequential improvement over fossil fuels. They also argue that demand for it by the biofuel industry makes corn more expensive, which threatens the world’s food supply, and would like to see corn removed from the mandate altogether.

Representatives of the Advanced Biofuels Association (ABFA), an industry group, met recently at the White House with senior presidential adviser John Podesta to urge the administration to accelerate approval of new biofuels.

ABFA President Michael McAdams, one of seven industry executives present at the meeting, told Reuters afterward, “We really tried to focus on how important it was to get [new biofuels] approved in a more expeditious way so we can actually bring more gallons to market.”

The administration is hearing similar arguments from some members of Congress. Ten Democratic senators met with Podesta on July 27 at the Capitol office of Sen. Al Franken (D-MN) to urge the White House not to weaken the Renewable Fuel Standard.

The group wants stronger investment in the biodiesel industry, which they argued would both reduce the country’s reliance on foreign oil and stimulate job growth in rural America.

After the meeting, Franken, chairman of the Senate Energy Subcommittee, said, “[N]ow is exactly the wrong time for the EPA to try to weaken the Renewable Fuel Standard and allow big oil companies to blend less biodiesel and other renewables into our nation’s gas supply. [W]e need to renew our commitment to renewables, and we can start by reversing this shortsighted proposal.”

This article was originally published on Oilprice.com.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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