Ethanol backers skeptical as government releases yearly biofuels target

Corn Harvest November 2017 (NTV News)

Farm groups remain skeptical of the EPA's position on ethanol, even as the government increases the amount of ethanol to be blended into the nation's fuel supply.

The Environmental Protection Agency oversees the Renewable Fuel Standards (RFS) program. Every year the EPA sets the minimum amount of renewable fuels that must be supplied to the market, through something called the Renewable Volume Obligation (RVO).

In a news release, EPA administrator Scott Pruitt said, "I’ve traveled to numerous states and heard firsthand about the importance of the RFS to farmers and local communities across the country. Issuing the proposed rule on time meets Congress’s statutory deadlines, which the previous administration failed to do, and provides regulatory certainty to all impacted stakeholders."

Pruitt recently visited Nebraska.

The EPA standards for 2019 call for conventional corn ethanol to be maintained at the 15 billion gallon target set by Congress, while the advanced and cellulosic biofuel standards would be increased for the year.

Troy Bredenkamp, Executive Director of Renewable Fuels Nebraska said the industry group was pleased with the target numbers sets by the EPA.

But they remain unconvinced the numbers will mean anything.

Bredenkamp said in a statment, "It will be a futile victory if Administrator Pruitt’s EPA continues to say one thing, yet do another. The announced volume is near meaningless if this EPA continues to grant back-door RFS waivers to nearly any and all refineries who submit the paperwork, particularly if the volume being waived is not reallocated as required under the RFS."

Ethanol industry supporters have been critical of the EPA's handling of waivers from refineries.

Bredenkamp said, "The proof, in this case, will be in the execution and implementation of the 2019 RVO. Unfortunately, Administrator Pruitt has said many things that sound very positive on the surface, but the when the rubber hits the road, ethanol is being short-changed and curtailed at every turn and corner. Until we see implementation and results that match the rhetoric, Nebraska’s ethanol producers will likely remain skeptical of any announcement coming out of this EPA."

Governor Pete Ricketts said the state supports the fact the EPA has published the numbers in a timely way, and has maintained conventional ethanol numbers.

"While timely release helps create predictability for producers, the EPA’s practice of granting small refinery waivers erodes producer confidence in the market. During a recent meeting in Nebraska, Administrator Pruitt talked about reforming the method for reallocating waived gallons. Producers need predictability from the EPA, and we would like to see his proposal on how to go about doing that as quickly as possible, said Governor Ricketts in a statement.

The announcement also comes with mixed feedback from the administrator of the Nebraska Ethanol Board.

"The 2019 Renewable Volume Obligation announced by the EPA helps get biofuel demand back on track. However, ethanol producers are wary of the potential to again undermine the requirements via EPA issuance of ‘small refiner’ waivers. EPA waivers have reduced biofuel demand by an estimated 1.5 billion gallons. Biofuel producers continue to seek reliable market signals that stimulate investment in production and fuel infrastructure," said Todd Sneller.

Ag economist Scott Irwin said the EPA has specifically said it will not take public comment on the refinery issue, that has been raised by many farm groups.

Advanced Biofuels Business Council director Brooke Coleman said, "On its face, the EPA proposal is promising. It reverses last year’s roll back of cellulosic biofuels, and it opens growth opportunities for advanced producers who are establishing new revenue streams for rural America. But until there is some check on the EPA’s abuse of waivers, regulatory uncertainty will continue to threaten investments in advanced biofuels."

Senator Deb Fischer, a member of the Senate Agriculture Committee and the Senate Environment and Public Works Committee, issued a statement, saying ethanol is critical to the state's economy. Nebraska is the number two state for ethanol production.

She said, "I welcome the EPA’s announcement of this proposal, which sets conventional ethanol at 15 billion gallons and increases advanced biofuel gallons. While the renewable fuel volumes proposed are a step in the right direction, continued oversight, especially in regards to small refinery exemption waivers, is needed to ensure the integrity of the RFS and that the law is not compromised."

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