Second House bill seeks to roll back US cellulosic ethanol mandate

21 September 2012 18:52  [Source: ICIS news]

WASHINGTON (ICIS)--A second bill to roll back the federal mandate for cellulosic ethanol consumption was introduced in the House on Friday, with its sponsor charging that the mandate defies common sense in the absence of cellulosic fuel capacity.

Representative Jim Sensenbrenner (Republican-Wisconsin) charged that the Environmental Protection Agency (EPA) “is penalising refiners for failing to do the impossible”.

Under the Clean Air Act (CAA), the EPA requires that each year refiners use increasing amounts of cellulosic ethanol, including a mandated consumption of 8.65m gal (32.7m litres) for this year, up from the 6.6m gal required for 2011.

If refiners fail to use the required volume of cellulosic ethanol, they must pay a $0.78/gal (€0.60/gal) waiver fee to the EPA.

But as Sensenbrenner noted in introducing his bill – and as the EPA has acknowledged – there is no commercial-scale production of cellulosic ethanol available in the US.

“It makes no sense to keep increasing the mandate when there are still zero gallons of the cellulosic biofuel commercially available,” Sensenbrenner said.

“We want our policy to encourage innovation and energy security,” Sensenbrenner said, referring to federal support for alternative fuels such as ethanol, “but this approach defies common sense and manipulates the law’s intent.”

He noted that the Clean Air Act says that the EPA should base its annual cellulosic ethanol consumption mandate in part on how much of the fuel is actually being produced.

“If the EPA cannot base their mandate on realistic projections, we need to change the law to rein in the rogue agency,” he said.

Sensenbrenner’s bill would amend language in the CAA that specifies that the EPA “may reduce” the mandate for cellulosic ethanol consumption in any given year. His language specifies that the agency “shall reduce” the required volumes for the next year to a level no more than 5% above the amount of cellulosic ethanol commercially produced in the prior year.

He noted that US refiners paid $6.8m in penalties to the EPA last year for “failing to provide a product that does not exist, a cost passed on to consumers in higher gas prices”.

Sensenbrenner’s bill is similar to one introduced by Congressman Jeff Flake (Republican-Arizona) in early July this year.

Both bills followed lawsuits filed by the American Fuel & Petrochemical Manufacturers (AFPM), the American Petroleum Institute (API) and other energy industry groups challenging the EPA’s cellulosic ethanol mandate.

The energy industry groups contend that the EPA may not lawfully impose what AFPM called “a hidden tax” on fuels producers.

The House is not likely to act on either the Flake or Sensenbrenner bills before the end of this year. Congress is soon to recess so that members may get to their home districts for campaigning ahead of the 6 November US national elections.

($1 = €0.77)

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

By: Joe Kamalick
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