API asks feds to reconsider 2013 biofuel quotas

WASHINGTON — Oil companies are asking the Obama administration to reconsider renewable fuel quotas for the year that they said were “unrealistic.”

The plea by the American Petroleum Institute — made in a formal petition of reconsideration to the Environmental Protection Agency — came just days after two oil industry trade groups filed lawsuits challenging the 2013 renewable fuel requirements.

At issue are this year’s mandates for corn-based ethanol, biodiesel, advanced biofuels and cellulosic supplies from non-edible plant parts. The EPA finalized those quotas on Aug. 6, leaving refiners just four months to adapt.

Although the EPA did not make changes to the absolute amount of biomass-based diesel and advanced biofuels refiners would be required to use, the overall percentage of mandated renewable fuels increased because the agency used new government forecasts of lower gasoline demand that were issued in May 2013. An earlier October 2012 report forecasting higher gasoline use had formed the basis for the EPA’s initial proposed renewable fuel quotas.

According to API, the decision to go with the new gasoline demand numbers threw off oil refiners around the country, who had been making their own estimates about how much renewable fuel they would need to use this year in the absence of clear, final EPA targets. In the proposed quotas issued in February 2013 using the earlier gasoline demand data, the EPA said renewable fuels would have to make up 9.63 percent of the nation’s fuel supply — lower than the final 9.74 percent target.

The EPA said it made sense to use more up-to-date information, given that its final renewable fuel rule was issued so late in the year. But under the Clean Air Act, the EPA is obligated to set each year’s renewable fuel quotas based on the government gasoline data issued the prior October.

“EPA has no discretionary authority to use other subsequent estimates,” API said. “And EPA gave no indication in (its) proposed rule that the agency would consider using other estimates.”

“It was improper for EPA to set the volume obligations based on the new information,” the American Petroleum Institute asserted. “EPA acted outside its scope of authority in establishing (renewable fuel standard) requirements that were based on information made available so late into the compliance period.

The EPA may ask the U.S. Court of Appeals for the D.C. Circuit to delay further action in the API and American Fuel and Petrochemical Manufacturers’ lawsuits until it has a chance to respond to the petition.

2013 RFS Reconsideration Petition