EPA's plan to boost ethanol use gets hearing

KANSAS CITY, Mo. -- The Obama administration's proposal to boost the amount of ethanol and other renewable fuels blended into gasoline produced at least one consensus Thursday during the matter's only public hearing: Few stakeholders, if any, are entirely satisfied by the plan.

Ethanol advocates, largely from Midwest farming states, testified the Environmental Protection Agency's target for biofuels next year again falls short of what Congress had in mind.

Oil companies countered the market, not the government, should dictate how much ethanol goes into gas, and the target should be lowered.

The head of a renewable fuels trade group said Thursday he was "increasingly confident" the EPA could be swayed to push the targets upward, citing the weight of roughly 140 people registered to testify -- the bulk pressing the EPA to call for the even larger increase when it issues its final rule, expected by the end of the year.

"If they don't (boost the goal), you have to question the commitment of the administration," Bob Dinneen, the Renewable Fuels Association's president and CEO, told reporters as the hearing unfolded in a Kansas City hotel.

The EPA oversees the decade-old Renewable Fuel Standard program commonly known as the ethanol mandate, which sets out how much corn-based ethanol and other renewable fuels refiners must blend into gasoline.

The program's intent was to address suspected global warming, pare dependence on foreign oil and bolster the rural economy by requiring a steady increase over time.

While almost 700 million gallons more than 2016's requirement, next year's target of 18.8 billion gallons of renewable fuels, mostly ethanol, is less than the 24 billion-gallon threshold set in law.

But the EPA has flexibility to make adjustments, called waivers, in the yearly targets based on conditions, including infrastructure and availability; this year, the agency cites fuel-market constraints and slower-than-expected development of next-generation biofuels, made from agricultural waste such as wood chips and corncobs.

Simply mandating Congress' targets "would be inappropriate in our view," said Benjamin Hengst with the EPA's Office of Transportation and Air Quality, adding the proposed quotas still "are consistent with Congress' clear goal of increasing renewable fuel."

"We believe the proposed standards to be ambitious and achievable," he said.

More renewable fuels are good news for the agriculture and ethanol industries, which aggressively pushed back on a 2013 proposal that would have decreased the amount of ethanol mixed into fuel. On Thursday, their representatives said Congress' intentions were doable.

"The EPA is not keeping its side of the deal," said Chip Bowling, the National Corn Growers Association's president. "Our message today is clear: Any reduction of statutory targets takes America backward."

Patrick Kelly of the American Petroleum Institute, the biggest lobbying group in the oil industry that has spent years fighting the program, testified the EPA did not go far enough in reducing the volumes of ethanol in gasoline.

"Until Congress repeals or significantly reforms the RFS, (the) EPA must continue to address the outdated volume requirements by exercising its waiver authorities," said Kelly, the institute's senior fuels policy adviser.

Environmental groups say farmers growing large amounts of corn for ethanol are tearing up the land and diverting grain from needed food, and some conservatives call the government's longtime support for ethanol "corporate welfare."