Houston, 13 August (Argus) — Oil industry groups today petitioned US environmental regulators to drop mandated ethanol blending to below 10pc of the US gasoline supply in 2014.
The American Petroleum Institute (API) and American Fuel and Petrochemical Manufacturers (AFPM) sought changes to next year's required blending volumes under EPA's authority to waive elements of the Renewable Fuel Standard (RFS) if it determines it will cause severe economic harm.
“The RFS is broken beyond repair, and we are calling on the EPA to use its waiver authority to provide a stop-gap measure for this unworkable mandate,” API downstream group director Bob Greco said. “Higher ethanol requirements could lead to a reduction in the domestic fuel supply, increased costs and severe harm to the US economy.”
The RFS requires importers, refiners and other companies blend increasing volumes of advanced and conventional biofuels into the US fuel supply. The 2013 requirement totals 16.55bn USG, or 9.74pc of expected fuel demand. Program plans call for blending to reach 36bn USG by 2022.
The EPA has not yet proposed final volumes for 2014, but has hinted it could reduce requirements to levels achievable using the ubiquitous 10pc ethanol gasoline blend.
Refiners especially have fought the program as new blending requirements approach levels that exceed the industry's ability to comply using E10. The industry insists demand for higher-ethanol fuels remains too low to achieve higher volumes; biofuel companies accuse the oil industry of trying to dodge program requirements.
The API and AFPM petition warns gasoline prices could increase 30pc and diesel prices by 300pc if RFS requirements are not adjusted, citing a commissioned study by NERA economic consulting.
Renewable Fuels Association president Bob Dinneen said the groups had no cause to request such a waiver and that the program was working as intended.
“This is just Big Oil's desperate attempt to maintain a stranglehold over the US fuel supply,” Dinneen said. “It will fail.”
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