US gover­nors urge EPA to keep re­new­able fuel stan­dards in­tact

The China Post - - WORLD BUSINESS - BY BILL DRAPER

A plan to re­duce the amount of re­new­able fu­els re­quired in the U.S. ga­so­line sup­ply drew heated con­dem­na­tion of the petroleum in­dus­try Thurs­day from two gover­nors who said health of the ethanol in­dus­try is vi­tal to their states’ econ­omy.

Hun­dreds of peo­ple took turns read­ing pre­pared three- minute state­ments on an En­vi­ron­men­tal Pro­tec­tion Agency pro­posal to lower bio­fuel re­quire­ments set by Congress by 4 bil­lion gal­lons this year and 5 bil­lion gal­lons next year.

Thurs­day’s event in Kansas City, Kansas, is the only public hear­ing the EPA plans be­fore mak­ing a de­ci­sion in Novem­ber on the re­new­able fuel stan­dard pro­gram. The EPA says it’s re­duc­ing the vol­umes be­cause in­fra­struc­ture in­ad­e­qua­cies limit how much can be con­sumed and be­cause the in­dus­try isn’t able to pro­duce enough nonethanol fu­els to meet the re­quire­ments. How­ever, corn grow­ers and other sup­port­ers of the higher stan­dard say they’re needed to force oil com­pa­nies to im­prove in­fra­struc­ture at gas pumps to de­liver ethanol fuel blends above the cur­rent 10 per­cent mix.

Iowa Gov. Terry Branstad, whose state is the na­tion’s top corn and ethanol pro­ducer, and Mis­souri Gov. Jay Nixon both spoke against the stan­dards.

“The EPA has a choice: pro­tect the deep pock­ets of Big Oil and their mo­nop­o­lis­tic prac­tices or nur­ture con­sumer choice, re­new­able energy growth and a healthy ru­ral econ­omy,” Branstad told a panel of EPA of­fi­cials.

Chris Grundler, di­rec­tor of the EPA’s of­fice of trans­porta­tion and air qual­ity, said the pro­posed stan­dards are con­sis­tent with Congress’ goal of in­creas­ing re­new­able fuel pro­duc­tion and use over time, he said.

“Sim­ply set­ting the stan­dards at lev­els tar­geted by Congress and trust­ing that this will suf­fi­ciently in­cen­tivize the mar­ket to achieve the man­dates for 2016 would be ir­re­spon­si­ble, and would have sig­nif­i­cant neg­a­tive im­pacts in­clud­ing wide­spread non­com­pli­ance,” he said.

The oil in­dus­try ar­gues that many re­tail­ers aren’t equipped to sell ga­so­line con­tain­ing more than 10 per­cent ethanol and that cus­tomer de­mand doesn’t war­rant the in­vest­ment re­tail­ers would have to make to up­grade their pumps.

“Oil and gas com­pa­nies only con­trol about 5 per­cent of re­tail gas sta­tions. They’re the ones who have to make that in­vest­ment, but the de­mand isn’t there be­cause con­sumers aren’t ask­ing for those fu­els,” said Amer­i­can Petroleum In­sti­tute spokesman Bob Greco.

The U.S. has 214 bio­fuel plants, most of them us­ing corn to make ethanol, with a ca­pac­ity of nearly 15.5 bil­lion gal­lons. Iowa, the big­gest bio­fuel pro­ducer, has 42 ethanol plants and 13 biodiesel plants.

En­vi­ron­men­tal groups have ar­gued that ethanol adds to global warm­ing by re­mov­ing mil­lions of acres of land from the Con­ser­va­tion Re­serve Pro­gram for use in corn pro­duc­tion and has led to an in­crease in food costs world­wide as more U.S. corn is used for fuel.

Branstad, a Repub­li­can, noted that the price of corn has fallen from US$6 a bushel in Au­gust 2013 to $3.45 a bushel now. He said the EPA’s in­de­ci­sion on the fuel stan­dards has cre­ated un­cer­tainty in the mar­ket and sti­fled in­vest­ment in tech­nolo­gies to de­liver bio­fu­els.

Nixon, a Demo­crat, ques­tioned the EPA’s au­thor­ity to lower the stan­dards.

“The fed­eral RFS (re­new­able fuel stan­dard) al­lows a waiver only if it will harm the econ­omy or the en­vi­ron­ment,” he said. “I’m not see­ing how it’s go­ing to hurt our econ­omy to pro­duce cheaper, bet­ter, cleaner fuel, and it’s cer­tainly not go­ing to hurt our en­vi­ron­ment.”

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