Fuels America call stresses the importance of the RFS

By Erin Voegele | September 11, 2014

On Sept. 11, Fuels America hosted a conference call to highlight the importance of maintaining a strong renewable fuel standard (RFS). As the White House continues to review the U.S. EPA’s final proposal for the 2014 RFS, Fuels America also announced it will run an ad that warns “the fate of America’s advanced biofuel industry, along with the President’s clean energy legacy, are resting on his decision.”

During the call, Brent Erickson, executive vice president of the Biotechnology Industry Organization’s’ industrial and environmental section, noted that the long delay in releasing the RFS rule has sent signals to the market undercutting investment in advanced biofuels and distribution infrastructure.

Erickson also described two primary problems with the 2014 RFS proposal itself. First, he said it lowers the overall targets, meaning less advanced biofuel will make it into the fuel supply. The second, and much larger concern, he said, is the methodology employed by EPA in proposing the 2014 standard. Rather than basing the proposal on the industry’s ability to produce fuel, as required by law, the EPA based its methodology on whether or not the oil industry wants to offer renewable fuels to customers, he said. “Since the oil industry largely controls that infrastructure through its gasoline station distribution contracts, it gives them, basically, veto power over the growth and market share for renewable fuels,” Erickson continued.

“This new methodology they are proposing would dampen new investment in advanced biofuels for years to come,” Erickson said. “No one will make the additional investments in advanced biofuels necessary to reach to our goals of greater energy security and more renewable energy.”

While EPA Administrator Gina McCarthy has recently indicated the EPA will increase the 2014 volume requirements in the final rule, Erickson said the agency attributed that decision to the fact that gasoline consumption is expected to rise. “While we are obviously pleased they want to revise the number somewhat, we actually found those comments to be disappointing. They are basically signaling that they are sticking with a flawed methodology that guarantees oil industry can control 90 percent of the fuel market,” he said.

Steve Hartig of Poet-DSM Advanced Biofuels also spoke during the call. He said this is a pivotal moment for the biofuels industry. While four commercial cellulosic refineries are coming online this year, he said it is no coincidence that none of those four companies have announced plans to build or license their technologies in the U.S. since the 2014 RFS proposal was release. This is the worst time to make changes to the program, he continued, noting that if the administration doesn’t allow the biofuels market to grow beyond 10 percent of the market, there will be no room for advanced biofuels in the U.S. fuel supply.

“If the market is going to shrink or remain flat, then that’s not an attractive environment for investment,” Hartig said. “When you tell us that our fate will be controlled by our competitors in the oil industry rather than by consumers in the marketplace, that is very discouraging to U.S. investors that are quite likely to look at other better opportunities. If the administration were to follow through on its proposal, it would be driving us, the cellulosic industry they once championed, overseas to Asia, Europe and South America. The future of America’s environment and energy independence depends on ability to stand up to the oil interests who want to keep us hooked on more expensive, more polluting, foreign fossil fuels.”

John Doggett of the National Corn Growers Association also participated in the call. He said the farming community is going its part to support the RFS. The oil industry, however, has not. He highlighted the oil industry’s history of pushing back against E85, blender pumps and E15.

Fuels America plans to run a full page ad in the Sept. 19-21 edition of USD Today­. A copy of the ad can be downloaded here.