EPA’s 2017 Ethanol Standards Please No One

(CN) — Federal regulators on Wednesday proposed a modest increase to the amount of ethanol that refineries must blend into the nation's gasoline supply in 2017 — disappointing both the oil industry and biofuel groups.

The Environmental Protection Agency proposed a regulation requiring refineries to blend 18.8 billion gallons of corn-based ethanol and other biofuels into the gasoline supply next year, which amounts to nearly 700 million gallons more than the 2016 requirement.

The amount, which is far less than the 24 billion-gallon biofuel target that lawmakers established in a2007 statute, is higher than oil companies wanted but lower than what biofuel producers sought.

Under the EPA's proposal, renewable fuel would make up 10.44 percent of the nation's gasoline supply in 2017. The plan is to increase the amount of ethanol in gasoline by 300 million gallons and increase the amount of advanced renewable fuel by almost 400 million gallons, the EPA said.

The oil industry immediately blasted the EPA's plan. The American Petroleum Institute said that higher ethanol blends can damage engines and fuel systems, potentially forcing drivers to pay for costly repairs.

Consumer gas prices could also rise unless the EPA lowers renewable fuel standard levels, the group said.

"Consumers' interest should come ahead of ethanol interests," said API downstream group director Frank Macchiarola. "EPA is pushing consumers to use high ethanol blends they don't want and that are not compatible with most cars on the road today. The administration is potentially putting the safety of American consumers, their vehicles and our economy at risk."

American Fuel & Petrochemical Manufacturers president Chet Thompson said that the proposed volumes "go beyond marketplace realities."

"EPA's proposal threatens to force consumers to use more biofuel than vehicles, engines and fueling infrastructure can handle. The proposal provides more evidence that Congress should finally step in and repeal or significantly reform this broken program," Thompson said.

Biofuel backers, on the other hand, expressed disappointed that the EPA's proposal did not go further.

Chip Bowling, president of the National Corn Growers Association, pointed out that while the EPA has moved in a better direction, the ethanol number is still below the level set in the 2007 statute.

"The Renewable Fuel Standard is working for America. It has made our air cleaner. It has spurred investment in rural communities and created high-tech jobs. It has given drivers more choices at the gas pump. And it has reduced our dependency on foreign oil. Any reduction in the statutory amount takes America backward — destabilizing our environment, our economy, and our energy security," Bowling said.

Bob Dinneen, president and CEO of the Renewable Fuels Association, said that the EPA continues "to cater to the oil industry."

"As a consequence, consumers are being denied higher-octane, lower-cost renewable fuels. Investments in new technology and advanced biofuels will continue to languish and greenhouse gas emissions from automobiles will be unnecessarily higher," he said.

The first public hearing on the proposal is set for June 9 in Kansas City. Public input and comment is open until July 11.

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