EnergyFactor By ExxonMobil | Pespectives has a new home

EPA apology doesn’t make up for failure to follow law

“Every day the agency allows the RFS to drift in a sea of uncertainty is a day the agency is in violation of the law. … It is not a trivial violation.”

That denunciation of the Environmental Protection Agency’s handling of the Renewable Fuels Standard didn’t come from anyone in the petroleum-refining industry.

It came from the head of the Renewable Fuels Association, Bob Dineen, someone who often criticizes our industry. For once, I have to say I agree with him.

Mr. Dineen was speaking at a biofuels conference in Texas last week. His criticism centered on, among other things, EPA’s failure to finalize the 2014 RFS requirements that companies like ours are legally required to follow.

Knowing those numbers is important to refiners like ExxonMobil; they tell us what volumes of ethanol we are obligated to purchase from biofuels producers to blend into the nation’s motor-fuel supply. They are important to biofuels producers as well, because they signal how much they should aim to produce.

For obvious planning reasons, then, it is critical for a lot of parties to know these levels well ahead of time. Indeed, the law even requires EPA to finalize and publish them in a manner that gives everyone plenty of time to prepare.

So what happens when EPA drops the ball?

EPA_ETA_02-2015Consider the final 2014 numbers. EPA was supposed to publish them no later than November 30, 2013. Today we are well into 2015 – and the year in question has been history for two months – but the agency still hasn’t given the final required volumes for 2014.

Think about that. Here we are in 2015 and refiners like ExxonMobil still don’t know whether we complied with the law in 2014. And there’s no way for us to know, at least until EPA issues its long-after-the-fact decree.

Meanwhile the EPA has announced that it won’t have the final levels for 2015 – which, mind you, were legally required last fall – until sometime later this year.

Does that make any sense?

This Platts article notes that another participant at last week’s biofuels conference was an EPA official who came to speak about the EPA’s failure to meet its legally required deadlines.

He apologized.

“I wanted to come to Texas and personally tell you how sorry I am that we did not get our work done,” said Chris Grundler, director of the EPA’s Office of Transportation and Air Quality.

While the apology was directed to the biofuels lobby, it should be extended to the petroleum industry as well. After all, the annual RFS raises our costs – we are forced to buy tremendous quantities of a product that we otherwise wouldn’t and must blend it into the motor fuels we sell – and we face hefty fines if we fail to meet the levels specified by EPA.

Mr. Grundler apparently promised last week that his office would release the 2014 and 2015 final volumes, and the 2016 provisional levels, sometime this spring. Given similar promises in recent years that went unrealized, I won’t hold my breath.

EPA’s inability to follow the law year in and year out is yet another reason why the Renewable Fuels Standard is a bad policy that Congress should reconsider at the first opportunity.



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