EPA proposes cut to renewable fuel blend

WASHINGTON — The Environmental Protection Agency proposed new standards for the amount of plant-based fuel to be added to gasoline and diesel next year and, for the first time, reduced the mandated volume in response to mounting criticism that the standards had become unworkable.

Under rules proposed Friday, oil refiners would have to blend 15.21 billion gallons of renewable fuel with gasoline and diesel, down from the 16.55 billion gallons that companies had to use this year.

The oil industry had complained it could not use up this year’s allotment because Americans now consume less gasoline than they did in 2005, when the renewable fuel standard law was passed.

If oil companies do not blend all the required renewable fuels, they have to pay a penalty. But if they try to use up renewables by adding more than 10% by volume to the gasoline or diesel, they risk damaging engines built before 2007.

The renewable fuel “overhang” proved a handy weapon to a chorus of interests that wants to abolish the statute, which was passed by Congress and signed by President George W. Bush in 2005 to reduce U.S. dependence on imported oil. It was revised two years later to use fuels that emit less greenhouse gases than petroleum.

The oil industry chafed at the renewables requirement and its potential penalties. The livestock industry opposed it because the demand for corn to produce ethanol drove up prices for feed corn. And conservative politicians from oil-producing states did not like the bite renewables took from oil consumption.

The EPA’s proposed standards attempt to address, in particular, the oil industry’s concerns, which “should take the steam out of efforts” to try to kill the law, said Daniel J. Weiss, director of climate strategy at the Center for American Progress, a liberal Washington think tank.

The proposal elicited rare bipartisan approval from members of Congress, a sign that the EPA may have allayed industry concerns while sticking to its long-term effort to reduce greenhouse gases that drive climate change.

House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Rep. Henry A. Waxman (D-Beverly Hills), the ranking member, welcomed the new standards.

“The status quo is no longer workable,” Upton said. “Many of the issues raised by EPA, stakeholders and consumer advocates are now reflected in the agency’s proposed rule.”

Waxman credited the EPA with “thoughtfully addressing concerns” about the renewable fuel standards, also known as RFS.

“As we continue to look at this policy,” he said, “I encourage EPA to implement the RFS in ways that increase environmental benefits, especially by reducing carbon pollution.”

Although acknowledging that the EPA did take a step toward addressing its concerns, the oil industry is still calling for the renewable fuel standard to be scrapped.

“More must be done to ensure Americans have the choice of fuels they want, and we are continuing our call for Congress to act now,” said Jack Gerard, chief executive of the American Petroleum Institute, the oil industry lobby. “Ultimately, Congress must protect consumers from this outdated and unworkable program once and for all.”

Gasoline consumption has fallen in recent years partly because the weak economy has led people to drive less and new fuel economy standards implemented by the Obama administration have improved gas mileage.

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