US oil industry tells appeals court 2013 RFS should be overturned

Washington (Platts)--10Dec2013/416 pm EST/2116 GMT


Two major US oil industry groups said Tuesday the US Environmental Protection Agency violated the Clean Air Act in how it issued its 2013 Renewable Fuels Standard and asked a federal appeals court to overturn the blending mandate.

In an opening brief filed with the US Court of Appeals for the District of Columbia Circuit, the American Petroleum Institute and American Fuel and Petrochemical Manufacturers said the EPA was months late in issuing the 2013 rule.

"Although EPA was statutorily required to issue the 2013 RFS by November 30, 2012, it failed to issue the standards until August 15, 2013 -- almost two-thirds of the way through the compliance year," the trade groups wrote in their brief. "Instead of benefitting from the lead time Congress mandated, obligated parties must scramble to alter their compliance strategies more than halfway through the compliance year."

The API and AFPM also said the EPA was far too optimistic in its projections of cellulosic biofuels availability, and they also accused the EPA of circumventing the law in granting Alon USA's Krotz Springs refinery in Louisiana an exemption from the 2013 RFS.

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The EPA, which does not typically comment on pending litigation, will have until January 30 to file a response to the court. Biofuels groups supporting the RFA have until February 6 to file their brief.

The RFS, passed by Congress in 2005 and expanded in 2007, requires increasing annual amounts of biofuels to be blended in with US transportation fuel supplies. The EPA can adjust the annual amount, based on projected biofuels supply and transportation demand.

For 2013, the EPA is mandating 16.55 billion gallons of biofuels, of which 2.75 billion gallons must be advanced biofuels, including 1.28 billion gallons of biodiesel and 6 million gallons of cellulosic biofuels.

The oil industry, which has long sought to repeal the RFS, previously sued the EPA over its 2012 RFS, when it arged that the agency's 8.65 million gallon cellulosic biofuels requirement for that year was impossible to meet, due to the fuels' lack of availability.

The federal appeals court in January ruled in favor of the oil industry, saying the EPA was too "aspirational" in setting its cellulosic target.

The current lawsuit is being waged as the EPA is in the process of finalizing its 2014 rule, in which the agency, for the first time, lowered the biofuels blending mandate, citing the inability of US transportation fuel infrastructure to absorb blends of more than 10% ethanol.

The 2014 proposed rule, which would represent a victory for the oil industry if it stands, calls for 15.21 billion gallons of biofuels to be blended.

--Herman Wang, herman.wang@platts.com
--Edited by Derek Sands, derek.sands@platts.com

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