U.S. Democrats optimistic EPA to reverse course on biofuel cuts

Washington | Reuters — U.S. senators backing the federal biofuel mandate said Wednesday they believe the Obama administration will likely raise proposed targets for 2014 biofuel use when it issues its final rule next month, after protests from renewable fuel producers that planned cuts would devastate the industry.

Representing states with strong agricultural interests, the lawmakers said the Environmental Protection Agency’s (EPA) draft proposal issued in November slashing federal requirements for biofuel use in U.S. fuel supplies this year came as a surprise.

The draft rule cut the 18.15 billion gallons (68.7 billion litres) of biofuels mandated for use by a 2007 law to 15.21 billion gallons.

The proposal prompted an intense lobbying campaign by biofuel supporters, who argued the cuts were unnecessary and curtailed investments in the industry.

“We continue to be optimistic there will be an adjustment,” said Senator Heidi Heitkamp, a Democrat from North Dakota. “We’re not sure to what level.”

Heitkamp was joined by fellow Democrats Al Franken and Amy Klobuchar, both of Minnesota, Maria Cantwell of Washington, Dick Durbin of Illinois and Joe Donnelly of Indiana, at a press conference discussing the impact of the proposed cuts on biodiesel producers.

The Renewable Fuel Standard, passed by Congress and administered by the EPA, requires increasing amounts of biofuels to be blended into gasoline and diesel supplies through 2022.

Weak gasoline demand has placed the nation on a course where the federal targets will require ethanol to be blended into gasoline at levels higher than the 10 per cent mix that dominates U.S. fuelling infrastructure.

To avoid this so-called “blend wall,” the EPA said it needed to lower the mandate.

Oil refiners obligated to adhere to the targets have called for the repeal of the biofuel program, warning that without changes they could be forced to reduce output or export more fuel.

The lawmakers rejected these claims. They said part of the problem with the blend wall is oil companies have not embraced higher ethanol blends.

Franken said he has spoken with President Barack Obama, EPA head Gina McCarthy and White House officials about the issue and he believes the push to reverse the cuts has gained traction.

“I think this has had an effect,” Franken said. “They needed to hear from us and from our producers. I think they have.”

— Ayesha Rascoe reports on U.S. energy policy and regulations for Reuters from Washington, D.C.



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