Big Oil and Big Corn blitz EPA on biofuels plan

U.S. farmers, biofuel makers, and oil companies have mounted last-ditch efforts to push regulators to overhaul a controversial plan for biofuel use, homing in on the price Americans pay for gasoline mixed with such fuels as ethanol.

In thousands of filings ahead of a midnight deadline for comment on the plan, industry groups and companies like Archer Daniels Midland Co and Valero Energy Corp urged the Environmental Protection Agency to rethink its proposal for required biofuels volumes to be blended into the fuel stream through 2016.

The proposal for the Renewable Fuel Standard (RFS) program outlined two months ago by EPA seeks to raise use of ethanol next year by relying on greater adoption of gasoline blends with higher ethanol content like E15, which is about 15 percent ethanol, and E85, about 85 percent ethanol. [ID: nL1N0YK10R]

The diverse filings illustrate the complex task ahead for the EPA as it seeks to keep to goals set by Congress in 2007. Those goals are meant to reduce U.S. dependence on foreign oil and use cleaner, domestic energy sources, striking a compromise between the interests of the oil and corn industries.

The corn sector wants a higher volume of ethanol blended with gasoline than that proposed by the EPA. It argues that renewable fuels promote energy independence and rural economies.

Oil groups say the EPA’s proposal for biofuel use will breach the so-called “blend wall”, the practical limit on ethanol use without major infrastructure changes.

Both made the gas station and prices at the pump a key battleground.

“Consumers have shown they have little to no interest in higher blends of ethanol,” Bob Greco, a director for the American Petroleum Institute which opposes the RFS, said during a call with reporters on Monday. He cited stagnant demand for E85 in 2014 and growing demand for gasoline without ethanol.

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FACTBOX on comments on RFS proposal:

FACTBOX on RFS:

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Oil groups say drivers pay more for the biofuel because it is less efficient, forcing them to fill up more frequently, while fuel retailers would need to invest heavily on infrastructure to allow for greater biofuel use.

RFS proponents argue that ethanol saves drivers money and oil companies overstate the costs to prevent biofuels grabbing greater market share.

Costs to install E85 infrastructure are “trivial” and oil refiners have actively discouraged E15 and E85 adoption, said Protec Fuel, a Florida company that installs blender pumps, in its comments.

 

reuters