Pruitt’s EPA Undermines Cellulosic Biofuels and Transparency in Government

by Jeremy Martin (Union of Concerned Scientists) As the New York Times recently reported, the EPA Administrator Pruitt has been conducting much of his work to undermine the EPA’s mission in secret. The recent proposed rule implementing the Renewable Fuels Standard (RFS) provides yet another example of the Pruitt EPA taking decisions that should be based on evidence, and substituting their political preferences instead. The RFS is a complex and controversial regulation that is currently in a rulemaking process that will put the Pruitt EPA’s first official stamp on biofuels policy. Pruitt has made no secret of his distaste for the regulation, and his inclination to reduce burdens of any type on the oil industry, and his first efforts at RFS implementation shows how he puts that distaste into effect.

One of the striking elements of this year’s proposal was that the administration proposed that the standards for cellulosic biofuels in 2018 would be lower than those for 2017. The cellulosic biofuel standards are a small part of the overall proposal, but the success of cellulosic biofuels is key to delivering better biofuels, as I described in a chapter of my recent report on Fueling a Clean Transportation Future.

Moreover, a declining standard is an odd reversal, given the clear intent of the RFS to promote the growth of cellulosic biofuels. I was puzzled at how this conclusion was justified, and together with my colleague Alyssa Tsuchiya, we looked through the drafts and other documents that EPA posted in the docket to figure it out.

What we found is that the EPA’s original proposal transmitted to OMB on May 10^th called for growth of the cellulosic standard, with a proposal for 384 million gallons based on the same methodology that had been in place the previous several years. This was still the target in the June 14^th draft, but a new version dated June 23^rd, less than two weeks before the final proposal was signed by Administrator Pruitt, suddenly reversed course, with a new methodology and a proposal that would set the cellulosic standard for 2018 at 228 million gallons, a reduction compared to 2017.

We found arguments in earlier drafts that show that EPA staff knew perfectly well that the new methodology would be inaccurate and underrepresent cellulosic production. But someone intervening in the OMB review process decided to lower the targets anyway. Key passages of the argument defending the existing methodology were deleted, without seeking public comment on the points they raised.

The other rapidly growing part of the non-food-based cellulosic biofuel category is biogas, methane captured from landfills and other sources and used to replace fossil natural gas as a transportation fuel in heavy duty vehicles. For more on biogas, also called biomethane or renewable natural gas, see our recent fact sheet on The Promises and Limits of Biomethane as a Transportation Fuel.

The June 14^th proposal projects that biogas will provide 341 million gallons in 2018, based on solid performance (93% or capacity) from consistent existing producers with capacity of 265 million gallons equivalent, and new producers operating at about 50% of production capacity of 189 million gallons equivalent. In place of this assessment, a new methodology is proposed that ignores detailed consideration of new production capacity, and instead uses growth between the first five month of 2016 and the first five months of 2017 to predict a rate of growth for the industry as a whole. This leads to a projection of 9.3% annual growth and a proposal or 221 million gallons equivalent, 35% lower than the proposal in the earlier draft based on the existing methodology.

Unrealistically pessimistic estimates of next year’s production ensure that credit buyers (oil companies) will have the upper hand in negotiations with credit sellers (cellulosic biofuel companies).

Artificially depressed prices for these credits will make further investment in this sector less appealing.

The proposal ignores the proven track record and investment in corn kernel fiber ethanol and biogas, and relies instead on slippery math to lower the targets for cellulosic biofuels. Energy Dominance, as the Trump Administration defines it, ignores the clear progress of renewable fuels and instead doubles down on the failed fossil fuels of the last century. READ MORE