Print 18 comment(s) - last by Chadder007.. on Feb 3 at 2:38 PM

Court argues that goal is simply too unrealistic

The U.S. Environmental Protection Agency (EPA) has pushed aggressively in recent years to promote advanced fuels such as recycled waste oil (biodiesel) and cellulosic ethanol.  It also has pushed unpopular corn ethanol, a food-crop based biofuel, on the consumer market.

I. EPA Mandate Dealt a Blow

The EPA's weapon to push fuels is its ability to set blending targets that fuel distributors have to meet or risk fines.  In recent months the EPA has been under fire for its efforts to enforce an E-15 (15 percent corn ethanol) blending target. However, in U.S. Appeals Court of the D.C. Circuit, it was the other half of its initiatives  -- the advanced biofuels blending targets -- that were on the chopping block.

The Appeals Court ruled this week that the EPA's blending targets for a particular type of advanced biofuel -- cellulosic ethanol -- were simply infeasible.  The EPA had demanded that between 2010 and 2012, 20 million gallons of cellulosic ethanol be produced.  But to date almost no cellulosic ethanol has been blended into commercial fuel, and cellulosic ethanol startups have been unable to provide significant stock to blenders.

The EPA claims it has the authority to enforce blends based on the 2007 Energy Act passed under the Bush Administration, which promoted biofuels (and corn ethanol) growth.  

But the Appeals court rejected [PDF] that argument calling the decision to enforce targets on refiners -- customers of the fuel producers -- rather than the producers themselves as a bizarre and unprecedented government effort.

EPA sign
A Federal Appeals Court has banned the EPA from enforcing cellulosic ethanol blending targets.
[Image Source: Free Enterprise]

The three-judge panel writes, "We are not convinced that Congress meant for E.P.A. to let that intent color its work as a predictor, to let the wish be father to the thought.  ...Apart from their role as captive consumers, the refiners are in no position to ensure, or even contribute to, growth in the cellulosic biofuel industry ... [The EPA's message was essentially], 'Do a good job, cellulosic fuel producers. If you fail, we’ll fine your customers.'"

A key fuel industry figure, Bob Greco, the American Petroleum Institute’s director for downstream and industry operations, cheered the ruling, telling The New York Times, "There is no onus or accountability on the person who is producing the fuel.  They’re incentivized to pump up their projections via press release, and make rosy estimates because there’s no skin off their back if they fail to hit those."

II. Cellulosic Ethanol Damaged, But Not Dead, Other Biofuels Remain Intact

But the court stopped short of handing the refiners (blenders) a total victory.  It still left targets regarding biodiesel from fat, waste oil, soybean oil, or other sources intact.  It also left targets for sugarcane ethanol -- regarded as another "advanced" biofuel -- intact.

The Renewable Fuel Association (RFA), while disappointed about the cellulosic ethanol rejection, praised the court for not adopting a broader rollback, while defending the EPA's estimates.  The RFA writes, "The EPA did not determine a reasonably achievable volume and then inflate it.  Rather, it set the volume based on the best information available to it at the time."

Cellulosic ethanol remains an interesting idea.  Unlike food crop ethanol, it doesn't put pressure on food prices.  It in theory would bolster U.S. energy security, while minimizing the importance of oil producing states, many of which are hostile to the U.S.  And by repurposing carbon-containing waste instead of burning fossil fuels, cellulosic ethanol would cut carbon emissions (versus corn-ethanol which has been shown to increase net carbon emissions, compared to petroleum).

Cellulosic visualization
Cellulose forms the "woody" component in most plant leaves and stems.  It is harder to break down than "sugarier" plant carbohydrates. [Image Source: CUNY]

Two cellulosic ethanol startups -- Inios Bio and KiOR -- claim to be "near" commercial production, after tens of millions in startup capital.  But neither company has a working commercial scale plant yet.

Other cellulosic ethanol companies -- such as Coskata, which General Motors Comp. (GM) backed pre-bankruptcy -- are still floating around, showcasing "semi-commercial" scale plants.  But compared to the ambitious claims of a few years back, it would certainly seem such firms have lost a degree of their momentum.

Sources: Federal Appeals Court, Renewable Fuels Association [reaction], The New York Times

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wrong interpretation
By Danger D on 1/29/2013 6:16:29 PM , Rating: 5
But the Appeals court rejected [PDF] that argument calling the decision to enforce targets on refiners -- customers of the fuel producers -- rather than the producers themselves as a bizarre and unprecedented government effort.

That's not at all what they said. They said the EPA could continue to enforce targets on refiners.

The court said the EPA was overly optimistic, using the targets to encourage development rather than basing targets on actual production. The court said EPA must be more realistic in its targets.

RE: wrong interpretation
By Jaybus on 1/30/2013 2:05:25 PM , Rating: 2
Yes, and good for the court. I wish they had banned the corn alcohol requirement as well. It is ludicrous to utilize food production in the false hope that it is somehow more "green". Typical of government interference, it drives up the cost of both corn and fuel, not to mention reducing the amount of available food in a world that still has plenty people without enough food.

RE: wrong interpretation
By superstition on 2/2/2013 1:45:27 AM , Rating: 2
Corn ethanol is a corporate welfare fiasco that won't be dying any time soon.

RE: wrong interpretation
By Chadder007 on 2/3/2013 2:38:42 PM , Rating: 2
There is too much money tied up in kickbacks/lobbying for that to happen any time soon.

Proofreading, Where is?
By kyuuketsuki on 1/29/13, Rating: 0
RE: Proofreading, Where is?
By rdhood on 1/29/2013 4:59:16 PM , Rating: 2
"But the Appeals court rejected [PDF] that argument call the decision to enforce targets on refiners -- customers of the fuel producers -- rather than the producers themselves as a bizarre and unprecedented government effort."

Where's the confusion? That statement is perfectly clear.

RE: Proofreading, Where is?
By integr8d on 1/30/2013 12:46:00 AM , Rating: 3
Umm. No, Einstein. It's far from clear.


But the Appeals court rejected [PDF] that argument, calling the decision to enforce targets on refiners (customers of the fuel producers), rather than the producers themselves, a bizarre and unprecedented government effort.

RE: Proofreading, Where is?
By DrizztVD on 1/30/2013 4:10:19 AM , Rating: 2
For the reasons set out above, we reject API’s challenge to EPA’s refusal to lower the applicable volume of advanced biofuels for 2012. However, we agree with API that EPA’s 2012 projection of cellulosic biofuel production was in excess of the agency’s statutory authority. We accordingly vacate that aspect of the 2012 RFS rule and remand for further proceedings consistent with this opinion.

That's what the PDF document concludes from the Appeal. The court doesn't seem at all opposed to what the EPA are trying to do, they're just saying that one of their targets aren't realistic and therefore is being set aside for now.

RE: Proofreading, Where is?
By Cluebat on 1/30/2013 7:40:35 AM , Rating: 2
It is perfectly cromulent.

This is not over
By Cluebat on 1/30/2013 7:36:57 AM , Rating: 2
Cellulose targets are more than just unrealistic goals- they are a tool used for the green agenda.

Therefore I do not expect the EPA to roll over on this.

RE: This is not over
By Jaybus on 1/30/2013 2:11:42 PM , Rating: 2
I don't know. It reeks of straight up corporate welfare in the form of mandates that create an artificial market for an unneeded product, even though the product isn't even feasible.

By Mint on 1/29/2013 5:50:15 PM , Rating: 2
In recent months the EPA has been under fire for its efforts to enforce an E-15 (15 percent corn ethanol) blending target.
Nothing in your link for this is about enforcing a 15% ethanol target. The E-15 standard is about qualifying another fuel for sale to the public. Gas stations have no mandate to use an E-15 blend, and given the warnings/restrictions that the EPA itself is mandating for such pumps, only those that see customer demand will do so.

At least the rest of your info seems correct. It's a shame that cellulosic ethanol didn't pan out, but fortunately we got the shale gas boom giving us cheap natural gas, making GTL (gas to ethanol, diesel, gasoline) an economically viable possibility. Coskata was a big player in the cellulosic ethanol business, but is now shifting gears to GTL.

By HelenaSmithe22 on 1/30/2013 7:47:22 PM , Rating: 2
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Regarding advanced biofuels
By iowafarmer on 1/31/2013 11:35:04 AM , Rating: 2
I'm going to provide a link to a WSJ article about importing the "advanced biofuel" produced from sugar cane, and corn based ethanol producers concerns about the current RFS. It should be noted that there is a subsidy for advanced biofuels. The subsidy is not mentioned in the article and it's not totally clear if imported ethanol is eligible for the subsidy, but I suspect it is. It's possible that US taxpayers are subsidizing imported ethanol. The blender credit for corn based ethanol has expired.

If some imaginary indirect land use factor were not used in the advanced biofuel calculation for corn based ethanol, it would also be an advanced biofuel. If corn based ethanol distillers grains were using biomass instead of fracked natural gas in the distillation process it would be an advanced biofuel. It's ironic that if some supposed ground cleared to produce sugar cane ethanol (indirect land use) were not used in the advanced biofuel calculation for corn, corn would be an advanced biofuel. If the distiller grain by product that remains after the starch in corn is converted to sugar in the distillation process of corn based ethanol would be given credit for retaining a large percentage of the food and feed value of raw corn, it might be considered an advanced biofuel.

A look at RFS issues:

It should be noted that the volume of ethanol produced from corn has basically reached it's limit as outlined in the RFS.

By LenaSmithe22 on 1/29/13, Rating: -1
By LenaSmithe22 on 1/29/13, Rating: -1
Another day...another Jason Mick rant
By Beenthere on 1/29/13, Rating: -1
By maugrimtr on 1/31/2013 5:45:09 AM , Rating: 2
Yes, it is right. E15 relies on corn based ethanol. Corn is a food crop. When you convert food into fuel, you have less food. Basic Economics should tell you this leads to price increases throughout the food supply chain (sugar up, corn feed for animals up, basically - almost everything up include corn substitutes). That is the EPA and the POTUS being irrational, deliberately harmful to the environment, and damaging to Humans. Try living in a third world nation and explaining to them why their food costs have gone insane in the past decade despite global productivity increasing overall?

Yes, because Americans are burning food in cars so they need to buy more food elsewhere pushing up prices on global markets.

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