What Kevin Cramer Is Telling Trump about Making American Energy Great Again

Business News/Analysis, Environmental Protection Agency, Federal Agency/Executive Branch, Federal Legislation, Federal Regulation, Opinions, Policy

May 20, 2016

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by Mark Drajem (Bloomberg) Say what you will about the EPA, but it doesn’t take the easy way out. EPA issued its proposal for the 2017 Renewable Fuel Standard yesterday, surprisingly early given that it has been increasingly tardy in issuing the quotas. EPA proposed compelling refiners to blend 18.8 billion gallons of biofuel into the U.S. gasoline and diesel supply next year, with no more than 14.8 billion gallons of that coming from conventional corn-based ethanol. It represents an increase over the 18.1 billion gallons of total renewable fuels the agency requires for 2016.

What that means is that EPA stopped just a hair short from setting the quota for corn ethanol at the 15 billion level set out in the 2007 statute. That’s, uhhh, not a lot. As Doug Irwin, the University of Illinois agriculture economist, Tweeted: “A real head scratcher to me why they would get so close and not go all the way to 15bg.” If it had let rising fuel demand push its total up to 15 billion gallons, ethanol producers would have had no reason to sue. Instead, EPA’s proposal — like last year’s version — reflects that it is acceding to oil companies’ concerns that the RFS is pushing them beyond a “blend wall” of 10%. (It could always abandon this approach when it finalizes the rule at the end of the year.)

Rep. Kevin Cramer says he is telling Donald Trump the RFS should “expire” in 2022. Cramer told us it’s too risky leave setting the quotas for ethanol to EPA regulators when the quotas laid out in the 2007 energy law expire. “I think you get rid of the regulation in 2022,” he said. By then the ethanol market should be well established enough to survive on its own, he said. Incidentally, that was also the argument of Sen. Ted Cruz when he was campaigning in Iowa this year — and pilloried for it by ethanol producers. Trump said he would oppose congressional efforts to gut the mandate. One small quibble on this is that the mandate doesn’t actually expire in 2022, that’s just when the congressionally mandated quota levels end; Congress would need to pass a law to end it.

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In addition to Laura Curtis’ story about Cramer’s advice to Trump, today we have a sneak peak at SAFE’s recommendations to boost offshore drilling; a deep-dive into why refiners hate the RFS …

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Chart of the Day

Rep. Bill Flores, R-Texas, has propsed legislation, H.R. 5180, to cap the maximum volume of ethanol blended into the transportation fuel supply at 9.7% of projected gasoline demand. Oil producers and refiners say ethanol hits the blend wall at 10% of the fuel supply, and they need that cushion to make sure the prices for RINs don’t spike. But, as this chart provided by the Renewable Fuels Association shows, blending levels have topped 9.7% a number of times since the beginning of last year. READ MORE and MORE (AutoBlog) and MORE (New York Times) and MORE (AgWeek)

https://advancedbiofuelsusa.info/proposed-renewable-fuel-standards-for-2017-and-the-biomass-based-diesel-volume-for-2018/

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