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Remarks on EPA’s 2014 RFS proposals: Part 2

Hydrocarbon Engineering,

Several groups and associations around the US gathered to a press call to discuss the EPA’s RFS proposals which are due for release on Thursday 5th December. Below are some further reactions.

American Fuels and Petrochemical Manufacturers

Charles T. Drevna, President, AFPM said, ‘EPA’s recognition of the ethanol blendwall and the potential adverse effects on consumers is a welcome first step; however, EPA’s actions are short term in nature and point to the need for Congress to address the severely flawed RFS.

‘The vast majority of existing vehicles and infrastructure cannot handle a gasoline supply containing more than 10% ethanol (E10), which leads to what is referred to as the E10 blendwall. The blendwall is here, which is why action to stem the growth of the mandate is critical.

‘Additionally, the RINs used for compliance for the mandate act as permits to sell gasoline or diesel. If a refinery cannot get enough RINs, because not enough biofuel can be blended into the fuel supply safely to generate the number required for compliance, they face a tough choice. They are left to decide how to decrease their obligation by decreasing production, or exporting more fuel than they would normally. Both situations are bad for consumers.

‘Due to these realities, we feel EPA should actually set the mandate at a level slightly lower than what is in their 2014 proposal. Specifically, they should grant our waiver request to ensure the mandate does not require more than 9.7% ethanol to be blended into the fuel supply. Such steps are necessary to retain a supply of pure gasoline required for some engines, account for historical differences between EIA projections of gasoline demand and actual demand, and promote liquidity in the RIN market.

‘We are not asking for cuts in ethanol production, we are asking to hold off on increasing the mandate. Ethanol production grew from a nascent industry up to 12. 9 billion gallons, at the same time, corn prices doubled.

‘In closing, we believe that reduction in the mandates are critical to protect the driving public, those who eat and those who breathe air.’

Boat US

Nicole Palya Wood, government affairs representative for Boat US said, ‘I want to take just a few moments this morning to express our reaction to, and concerns with the 2014 RVO targets proposal from the consumer perspective because our members are the consumers not the manufacturers or industry.

‘First and foremost we want to comment the EPA for taking a giant step towards addressing the current day realities of the RFS with the drafting of the 2014 proposed RVOs.

‘We applaud the pivotal recognition of the shrinking demand for fuel and hope this sends a signal to Congress of the dangers that an impending blendwall presents to the average consumers. The EPA has in a small way recognised the impact to the consumer in addressing these market changes, and now is the time for Congress to do so as well.

‘As the RFS policy pushes higher blends of ethanol gasoline into the market, there is an increased potential for misfueling and engine failure that needs to be made clear. Not all American can afford to drive tow vehicles made after 2001, and for boaters these higher blends are poison to our marine engines.’

National Marine Manufacturers Association

Nicole Vasilaros, director of regulatory and legal affairs, NMMA said, ‘the recreational boating industry continues to experience the damaging effects of high ethanol blend fuels. While NMMA and the boating community appreciate EPA’s steps to ensure that low level ethanol fuels remain available, we believe that this limited fix is not a permanent solution. Now, EPA has initiated a public hearing on December 5th and NMMA plans to participate as the voice for US marine manufacturing, an industry that drives US$ 35 billion in annual spending. And while EPA’s move towards a resolution is commendable, we remain sure that a temporary stopgap is not the answer. More must be done.

‘The recreational boating industry relies on E10 as it is the fuel upon which our engines are designed and calibrated to run. Marine engines are legally prohibited from operating on higher ethanol blends. Producers and consumers alike also rely on E0, as ethanol free fuel is important for legacy engines.’

Competitive Enterprise Institute

Marlo Lewis, senior policy fellow at Competitive Enterprise Institute said, ‘I agree with all of my colleagues’ criticisms of the RFS and their call for more fundamental reforms than the EPA’s proposed cutback of the 2014 blending target.

‘The point I want to add is that the RFS is an unjust policy. It violates the core constitutional principle of equality under law.

‘In a free society, the law treats people as equals. No one is legally bound to buy from another, sell to another, or render service to another, except on the basis of contracts or agreements that each party enters into voluntarily.

‘That’s not how the RFS works. The RFS literally compels one industry to purchase, process, and sell other industries’ products. It obligates one group of companies to expand the market for other companies’ products.’

More reactions from associations and groups present at the press call can be found here: 'Remarks on EPA's 2014 RFS proposals: Part one'.

Adapted from a press release by Claira Lloyd.

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