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Biden EPA Proposes to Bump Share of Renewable Fuels in Blended Gasoline (video) – WSJ

Proposal would also incorporate electricity generation from renewable biomass into federal standards

Phillips 66 is converting this refinery in Rodeo, Calif., into a renewable-fuel facility. (Davis Paul Morris/Bloomberg)

Benoît Morenne, WSJ

HOUSTON
EnergiesNet.com 12 01 2022

The Environmental Protection Agency on Thursday issued a draft proposal that would force oil refiners to use more biofuel to blend with their products. 

The proposal sets the volumes of renewable fuel that refiners are required to blend with transportation fuel under federal standards to 20.82 billion gallons in 2023 up from 20.63 billion gallons in 2022, an amount that would gradually rise to reach 22.68 billion gallons in 2025. 

EPA Administrator Michael S. Regan said in a press release that the proposal would provide consumers with more options and diversify the nation’s energy mix. The agency said that the regulations would reduce U.S. oil imports by up to 180,000 barrels of oil a year between 2023 and 2025, and save Americans between $200-$223 million a year. 

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The proposal would also incorporate electricity generation from renewable biomass into the program for the first time, the agency said. The EPA plan would create a credit awarded when power generated through biomass is used to power electric vehicles.

The federal ethanol-blending mandate, known as the Renewable Fuel Standard, has faced strong opposition from oil-and-gas states and trade groups representing refiners, who argue that the cost of compliance is prohibitive. Corn-state politicians and lobbyists for the ethanol industry, on the other hand, have been fervent supporters of the standard, arguing that it has added to U.S. fuel supplies and decreased consumer costs. 

Emily Skor, chief executive of Growth Energy, a trade group representing producers of ethanol, said in a press release that the proposal showed the EPA’s support for “the growing role ethanol continues to play in decarbonizing the transportation sector, now and into the future.”

Geoff Moody, senior vice president of government relations and policy at the American Fuel & Petrochemical Manufacturers, an industry group representing refiners, said in a statement that the EPA’s proposal was a missed opportunity to correct design flaws in the ethanol-blending mandate or derive better carbon benefits from it. 

“For the final rule, EPA must go back and set conventional volumes that are aligned with consumer demand and infrastructure realities,” he said. “It must also hold true to the legacy of RFS as a liquid fuels program—not an electric vehicle program—by rejecting yet another massive regulatory subsidy for electric vehicle manufacturers.”

Under the RFS, refiners must blend certain volumes of ethanol into gasoline, set annually by the EPA, or buy credits from refiners who have blended more than the required amount. Typically, gasoline is required to be around 10% ethanol, but the EPA previously delayed decisions on annual volume requirements for 2021 and 2022.

Underproduction of some biofuels means that the total renewable fuel statutory target set by the EPA hasn’t been met starting in 2014, according to Congressional Research Service. In July, the EPA retroactively set the 2021 and 2022 volume requirements below the statutory targets. 

As part of a July consent decree agreement between Growth Energy and the EPA, the agency has to finalize the news requirements no later than June 14, 2023.

Write to Benoît Morenne at benoit.morenne@wsj.com

Appeared in the December 2, 2022, print edition as ‘EPA Seeks Fuel Mixes With More Ethanol’.

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