By KEVIN WALKER
Michigan Correspondent

WASHINGTON, D.C. — The EPA’s latest rulemaking on the Renewable Fuels Standard is A-okay as far as the renewable fuels industry is concerned, but the people in the oil industry aren’t at all happy about it and have filed suit to stop it.

The EPA’s so-called final rule, published in the March 26, 2010 Federal Register, takes up about 236 pages. According to the document, the action “finalizes the regulations that implement the requirements of EISA (Energy Independence and Security Act of 2007), including the cellulosic, biomass-based diesel, advanced biofuel and Renewable Fuel Standards that will apply to all gasoline and diesel produced or imported in 2010. The final regulations make a number of changes to the current Renewable Fuel Standard program while retaining many elements of the compliance and trading system already in place.”

In response to the rule the American Petroleum Institute (API) – representing oil refiners and other segments of the oil industry — filed a lawsuit March 29, 2010 in the U.S. Court of Appeals for the District of Columbia. The industry doesn’t like what it calls the “retroactivity” of the rule: that is, it takes effect on July 1, 2010, but affects the industry going back to 2009.

“The percentage standards apply to all gasoline and diesel produced or imported in 2010,” the rule reads. According to the API, the mandate for refiners goes back to 2009 for biodiesel and to January 1, 2010 for other biofuels.

“They can’t tell you in the middle of 2010 that you have a requirement going back to 2009,” said Al Mannato, fuels issues manager for the API. “We have no problem with the overall regulation, just the retroactivity.”

The API also accuses the EPA of being a year and a half late issuing its rule. A lot of what the EPA was doing during this time was figuring out what the greenhouse gas (GHG) reduction was going to be for particular processes, Mannato said. Along the way, between its proposed rule and the final rule, changes were made. For example, in the proposed rule ethanol made from sugar cane was calculated as a 27 percent GHG reduction, but was changed in the final rule to be a 61 percent reduction. The GHG reduction for biodiesel was similarly adjusted during this interim period.
Mannato cited the changes as examples of why “an obligated party” can’t act on a proposed rule:

“A regulated party can’t rely on a proposed regulation,” he said. “An obligated party always waits on the published rule and even on the effective date.”

The EPA didn’t have anyone available to speak to Farm World last week about the lawsuit or Mannato’s comments.

People in the renewable fuels industry are happy about the rule. Last February, when the EPA first began publicizing its final rule, the Renewable Fuels Assoc. (RFA) expressed its satisfaction with it.
“EPA was right to recognize that ethanol from all sources provides significant carbon benefits compared to gasoline,” said RFA President Bob Dinneen in a statement issued Feb. 3, 2010. “As structured, the RFS (Renewable Fuels Standard) is a workable program that will achieve the stated policy goals of reduced oil dependence, economic opportunity and environmental stewardship.”

After the lawsuit was filed Matt Hartwig, a spokesman for the RFA, said the association stands by its position. Also after the suit was filed, the National Biodiesel Board (NBB), the association representing the biodiesel industry, issued its own statement:
“The final ... rule issued by the (EPA) seeks to ensure the volume requirements envisioned, and mandated each year, by Congress are implemented consistent with an energy policy that values the displacement of petroleum diesel fuel with low-carbon, renewable fuels such as biodiesel,” said Manning Feraci, a vice president of the NBB.