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API’s petition to the US EPA

Hydrocarbon Engineering,


The below are extracts taken from a letter from the API Group Director of Downstream & Industry to Gina McCarthy, Administrator for the US EPA.

‘The American Petroleum Institute submits this petition for administrative reconsideration of the final rule entitled ‘Regulation of Fuels and Fuel Additives: 2013 Renewable Fuel Standards; Final Rule’ published at 78 Federal Register 49794 (August 15 2013) pursuant to section 307 (d)(7) (B) of the Clean air Act.’

‘Three specific issues in the rulemaking to establish the 2013 standards merit reconsideration:

1. EPA failed to use the October 2012 EIA information regarding gasoline and diesel production estimates for 2013 and instead improperly relied on EIA information from 2013, after the compliance period began.

2. EPA’s methodology to establish the cellulosic standard in 2013 continues to be flawed, and information clearly available to the Agency before the rule was finalised exposes this flawed methodology.

3. EPA granted a small refiner exemption that improperly and retroactively raised the obligation for other obligated parties.’

Use of New EIA Data

‘EPA failed to use the October 2012 EIA information regarding gasoline and diesel production estimates for 2013, even though the Agency proposed using this data set. Instead, EPA’s final rule used EIA information from 2013 – after the compliance period began. EPA did not propose this new methodology to set the standards, and API could not have raised its objections with this approach in the comment period.’

‘The Clean Air Act directs EPA to set the subsequent year’s standards based on the EIA estimate due October 31. EPA has no discretionary authority to use other subsequent estimates, and EPA gave no indications in the proposed rule that the Agency would consider using other estimates. It was not appropriate for EPA to solicit EIA for a revised fuel demand estimate, and it was improper for EPA to set the volume obligations based on the new information.’

EPA’s Cellulosic Biofuel Methodology

‘API provided comment to the Proposed Rule to establish the 2013 cellulosic standard stating that the proposed cellulosic standard was aspirational, arbitrary, and out of touch with reality. EPA has apparently not changed its self fulfilling prophesy approach as EPA has failed to adopt a neutral methodology in the proposed or final rules. The final 2013 requirements are volumetrically lower than what was proposed, yet the Proposed Rule and Final Rule were equally unrealistic considering that the final was published so late in the year. New information now available clearly demonstrates that EPA’s methodology and process used to develop the final 2013 standards were flawed and merit reconsideration. The information recently made available is regarding the capability of the KiOR facility in Columbus, Mississippi to meet its shares of EPA’s projected cellulosic production.’

‘API has some concerns with EPA’s use of cellulosic producer information obtained in the compliance period. However, very little cellulosic biofuel has been produced and unlike our concerns with the use of more recent EIA information raised earlier, obligated parties likely would not have behaved differently in the first 8.5 months of the year to comply with the cellulosic standard. API does not take position in this petition on the appropriateness of using cellulosic producer information obtained in the compliance period; the most recent information merely demonstrates how EPA continues to implement the standard with a flawed methodology, which is the basis for requiring consideration. EPA needs to use a more accurate methodology such as basing the volume on actual cellulosic production, rather than using selectively chose, optimistic projections from companies when history shows are consistently wrong.’

‘EPA should immediately reconsider the cellulosic biofuel standard and use a methodology that takes neutral aim at accuracy, as directed by the US Court of Appeals for the DC Circuit. API continues to recommend using three months of actual cellulosic production.’

Small Refiner Exemption

‘The Clean Air Act allows for small refiner exemptions and/or extensions based on an EIA study, or on a case by case basis as determined by EPA. EPA’s timeliness in rulemaking development is critical to the implementation of the small refiner provisions…EPA should not have reallocated the exempted party’s obligation across the rest of the industry, especially when it was too far into the compliance period to be changing the required compliance for the first 8.5 months of the year.’

Conclusion

‘The issues outlined above collectively show that EPA is not effectively implementing the RFS, and the Agency’s 2013 Final Rule continues the pattern of overly aggressive implementation of an unrealistic mandate. The ethanol blendwall remains our industry’s biggest concern with the RFS, and EPA continues to exacerbate the problem. EPA not only fails to use its discretionary authority to mitigate the problem, but, as described in this petition, EPA exceeds its authority in ways that only advance the timing and severity of the ethanol blendwall. EPA should expeditiously grant this petition.’

Edited from a letter by Claira Lloyd.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/15102013/api_petition_to_epa752/


 

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