US energy group files second suit against cellulosic ethanol mandate

25 July 2012 17:57  [Source: ICIS news]

WASHINGTON (ICIS)--The American Petroleum Institute (API) said on Wednesday that it has filed a second lawsuit challenging the federal government’s mandate for use of cellulosic ethanol, charging that the requirement is absurd because that fuel does not exist.

The institute, which represents some 500 US oil and natural gas producers, said that the Environmental Protection Agency’s (EPA) requirement that energy firms and refiners consume 6.6m gallons of cellulosic ethanol in 2011 is “unattainable and absurd” because it forces them to pay a penalty for not using a fuel that does not exist.

In March this year, the API filed a similar suit challenging the EPA’s 2012 cellulosic ethanol consumption mandate of 8.6m gallons.

The suit challenging the 2011 mandate was filed after the 2012-related action because the API had waited for the EPA to rule on the energy group’s petition to the agency seeking a waiver of last year’s mandate.  The EPA denied that petition, setting up the new court challenge.

In both suits – and in a similar action filed in June by the American Fuel & Petrochemical Manufacturers (AFPM) – the energy industry contends that the EPA is exceeding its authority under the Renewable Fuel Standard (RFS), part of the Clean Air Act (CAA).

Bob Greco, the API’s director of downstream operations, said that under the act and the RFS, “EPA is directed to set the [cellulosic] fuel requirement at a realistic volume, but the agency continues to mandate the use of biofuels that do not exist”.

He noted that the act requires that the mandate be set at a level based on “the projected volume available”.

The API cited the EPA’s own data showing that no cellulosic ethanol was produced in 2011 and no production of that fuel has been available so far this year.

Under the EPA’s RFS mandates, if refiners, importers or fuels blenders fail to use the required volume of cellulosic ethanol, they must pay a $0.78/gal (€0.65/gal) waiver fee to the EPA.

“The mandate is effectively an added tax on gasoline manufacturers that could ultimately burden consumers,” Greco said.

Legislation introduced in the US House of Representatives earlier this month would roll back the EPA mandate on cellulosic ethanol use until and unless commercial volumes of the fuel become available.

($1 = €0.83)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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