We wrote earlier this week about a court striking down EPA’s unrealistic cellulosic ethanol goals, with the court noting that the EPA did not take a “neutral aim at accuracy.” It seems that the EPA did not get the memo:
Just one week after a federal court rebuked the Environmental Protection Agency for mandating biofuel standards based on “wishful thinking,” the EPA responded by raising those standards to even more unattainable levels.
The EPA called for refiners and importers to mix 14 million gallons of cellulosic biofuels (ethanol) into fuel in 2013. “EPA calculates a percentage-based standard for the following year,” the agency explained in an announcement today. “Based on the standard, each refiner and importer determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel.”
This projection ignores last week’s ruling from the D.C. Circuit Court of Appeals, which struck down a rule requiring gasoline blenders to use 8.65 million gallons of the cellulosic biofuel because the mandate “was based on wishful thinking rather than realistic estimates of what could be achieved,” as The New York Times explained.
We continue to be surprised by the brazenness of the Environmental Protection Agency. Not even a week after a court bluntly told them that they are not allowed to set completely unrealistic standards for cellulosic biofuels, they double the expected volumes for 2013 from 8.65 million gallons to 14 million gallons, despite a 2012 commercial production of zero gallons.
The Washington Post has more:
However, the oil industry, which runs the nation’s refineries, says that even the new standard is arbitrary and optimistic. And the Energy Department’s Energy Information Administration has forecast nationwide production of just 9.6 million gallons.
“This entire mess underscores the need to look under the hood at what works, what doesn’t and adjust the volumes in the [renewable fuel standard],” said Stephen H. Brown, vice president of government affairs for Tesoro, a San Antonio-based refining company. He estimates that Kior and Ineos, together, will fall short of the EPA’s new target. “If you believe in Santa Claus and the Easter bunny, you believe in 14 million gallons,” he said.
Oil refiners say they are particularly upset because the law requires them to buy special certificates if they do not or cannot buy enough advanced biofuels to meet the federal mandate. The American Petroleum Institute said that raises costs for refiners and motorists alike.
“The court recognized the absurdity of fining companies for failing to use a nonexistent biofuel,” said API downstream group director Bob Greco. “But EPA wants to nearly double the mandate for the fuel in 2013. This stealth tax on gasoline might be the most egregious example of bad public policy, and consumers could be left to pay the price.”
Let’s review the last few years of EPA’s adjustments:
2010 level set by the EPA: 6.5 million gallons — Actual production: 0 gallons
2011 level set by the EPA: 6.6 million gallons — Actual production: 0 gallons
2013 level set by the EPA: 14 million gallons — Actual production: ?
Notice a pattern? Unfortunately, consumers will be stuck with the bill as oil refiners will be required to purchase cellulosic ethanol “permits” as the real fuel does not exist. This will raise costs, making fuel more expensive.