US energy sector disappointed in biofuels ruling

21 December 2010 19:53  [Source: ICIS news]

US energy firms were disappointed by the Tuesday court rulingWASHINGTON (ICIS)--US refiners and petroleum producers on Tuesday expressed disappointment in a federal court ruling in support of what the energy sector charged was a retroactive mandate for biofuels.

In a Tuesday decision, the US Court of Appeals for the District of Columbia Circuit denied a petition by the National Petrochemical & Refiners Association (NPRA) and the American Petroleum Institute (API) challenging biofuel consumption mandates set by the Environmental Protection Agency (EPA).

NPRA and API argued that while the EPA was required by law to set new volume targets for US biofuels consumption - known as the Renewable Fuels Standard (RFS) - by December 2008, the agency did not finalise those 2009 and 2010 volume requirements until March this year.

NPRA president Charlie Drevna said that at issue in the trade group's lawsuit was not the volume levels themselves but rather how the EPA did business.

“We did not seek to challenge or call into question the important role biofuels play in our nation’s transportation fuels supply,” Drevna said, but “the issue is one of fundamental fairness in EPA’s rulemaking process.”

“This retroactive regulation by a federal agency establishes a deeply troubling and potentially far-reaching precedent,” Drevna said, adding that his trade group was “disappointed that the court did not overturn what is clearly a flawed and misguided approach.”

Patrick Kelly, API’s senior policy advisor for downstream fuels issues, also expressed disappointment in the court ruling.

“EPA failed to meet its statutory deadlines, and in March 2010 finalised a rule that regulated refiners and importers for the previous year,” he said.

“Setting requirements to blend certain biofuels for the previous year is a legally questionable retroactive action,” Kelly added.

The National Biodiesel Board (NBB), however, welcomed the court ruling, saying that it sends “a clear, unambiguous signal to the marketplace that common-sense renewable goals established in the RFS programme will be met”.

Sources said that had the API and NPRA challenge to the rulemaking been accepted by the court, implementation of the biofuels standards and consumption mandates might have been halted and could have faced reconsideration.

An API spokesman said the trade group was still reviewing the court decision in detail and could not immediately say whether it would appeal.

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By: Joe Kamalick
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