Sept. 11 (Bloomberg) — An oil industry group complained
today that the Obama administration is considering a boost in
the U.S. mandate for using renewable fuels to help a Democrat
locked in a tight race for a U.S. Senate seat from Iowa.
Representative Bruce Braley, a Democrat in a near dead-heat
with Republican state Senator Joni Ernst, has prodded President
Barack Obama to reject a proposed cut in the requirement to use
ethanol and other non-petroleum fuels. As the administration
delays issuing a decision and the November election approaches,
the American Petroleum Institute today said it is concerned that
Obama may acquiesce.
“It’s purely politics at this point,” Bob Greco, director
of downstream operations at the Washington-based oil-industry
group, told reporters today. “We are very concerned that the
signals we are seeing from the administration is that the
political calculations are outweighing sound fuels policy.”
The U.S. Environmental Protection Agency is months overdue
in issuing a final requirement for ethanol use this year, a
delay that has confounded producers who support the program and
refiners who oppose it. Lobbying by the energy industry and
others has picked up.
The EPA in recent weeks has said it will adjust the mandate
to account for higher-than-forecast fuel demand this year, and
Greco said that the EPA is also predicting greater use of 85
percent ethanol fuel, or E85. Greco said both steps would allow
an increase in the amount of ethanol refiners must blend into
“Biofuels are an important part of the Obama
Administration’s all-of-the-above energy strategy, helping to
curb our dependence on foreign oil, cut carbon pollution, and
drive innovation,” Liz Purchia, a spokeswoman for the EPA, said
in an e-mail. “The 2014 RFS final standards were submitted last
month for interagency review after an extensive public outreach
Frank Benenati, a spokesman for the White House, didn’t
immediately respond to telephone and e-mail messages.
Last November, the EPA issued draft 2014 standards to
require the use of 15.21 billion gallons (57.58 billion liters)
of renewable fuels, including about 13 billion gallons of corn
ethanol and 1.28 billion gallons of biodiesel. That’s a 16
percent cut from 18.15 billion gallon total required for the
year under the 2007 law known as the Renewable Fuels Standard.
Makers of renewable fuels say last year’s EPA proposal
halted new investments in the next generation fuels, such as
ethanol made from crop waste, that have long been the dream of a
low-carbon fuel future. They are pressing the agency to reverse
the cuts proposed last year, to convince companies and investors
that renewable fuels are a good, long-term investment.
“As soon as the EPA proposal came out, it caused a degree
of uncertainty in the eyes of investors,” Jan Koninckx,
director of biofuels at Dupont Co., said in an interview.
Renewable fuels “can’t take over quickly if the policy is in
With makers of renewable fuels set back, lawmakers from
Minnesota, Illinois and Iowa have pressed the administration to
reverse course. In Iowa, Braley, who is seeking to replace
Democrat Tom Harkin, is in the closest Senate race nationwide,
according to the website fivethirtyeight.com. If Braley loses,
Democrats are less likely to keep control of the Senate, the
political website predicts.
A USA Today poll last month showed Braley and Ernst each
with 40 percent support.
The debate focuses on whether there is a “blend wall” on
the use of ethanol at 10 percent of the fuel supply. In its
proposal last year, the EPA agreed with refiners who said they
are limited in how much ethanol can be blended into the overall
fuel supply. Ethanol and other renewable-fuel producers argue
that only if EPA forces refiners to use a higher share of
renewable fuels will they come up with ways to cross that
threshold, in part by allowing the sale of more E85 or pursuing
other non-ethanol options.
“What the president proposed is a reflection of what the
oil industry wants,” said Brooke Coleman, executive director of
the Advanced Ethanol Council. “The RFS is meant to prevent oil
companies from blocking the availability of renewable fuels.”
Investors, representatives of refiners Valero Energy Corp.
and Tesoro Corp. and ethanol producers such as Poet LLC are
awaiting the EPA’s final quotas to figure out this year’s
requirements and anticipate the future course of the program.
The cost of a renewable fuel credit, or RIN, used by refiners to
meet the mandate, increased to about 50 cents in recent months,
after collapsing to 18 cents Nov. 15.
To contact the reporter on this story:
Mark Drajem in Washington at
To contact the editors responsible for this story:
Jon Morgan at