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EPA Charts Middle Course With New Renewable Fuel Mandate

REFILE – UPDATING SLUGEnvironmental Protection Agency (EPA) Administrator Scott Pruitt takes questions about the Trump administration’s withdrawal of the U.S. from the Paris climate accords during the daily briefing at the White House in Washington, U.S. June 2, 2017. REUTERS/Jonathan Ernst

The EPA released new regulations Wednesday that will maintain the current federally mandated level of ethanol in the nation’s fuel supply.

Traditionally, renewable fuel standards regulations are increased incrementally each year, but the Trump administration has opted to moderate that approach in a move that charts a political middle course between entrenched oil and corn interests.

The new regulations, issued under the renewable fuel standards program, require that 15 billion gallons of conventional ethanol be mixed into the fuel supply during the 2018 annual calendar year.

“Increased fuel security is an important component of the path toward American energy dominance,” said EPA Administrator Scott Pruitt. “We are proposing new volumes consistent with market realities focused on actual production and consumer demand while being cognizant of the challenges that exist in bringing advanced biofuels into the marketplace.”

The decision to maintain current ethanol levels represents a compromise between oil interests that view the regulation as a burden and would like to see it reduced, and agricultural interests that would like to see mandated ethanol levels continue to increase.

President Donald Trump vowed to help Iowa’s ethanol industry, which he described as “under siege,” during a June speech in Grand Rapids. The Iowa Renewable Fuels Association said that the new regulations keep Trump’s promise to support corn interests but failed the broader biofuel industry.

“Unfortunately, a change in administrations did not change the EPA’s underappreciation for the potential of U.S. biodiesel production,” the trade group told the Washington Examiner.

While the new regulations maintain 2017 ethanol levels, they reduce advanced next generation biofuel levels from 4.28 billion gallons in 2017 to 4.24 billion gallons in 2018. The Trump administration’s decision to slow the nation’s progression toward renewable fuel use drew criticism from industry stakeholders.

“This proposal continues to underestimate the ability of the biomass-based diesel industry to meet the volumes of the RFS program. This is a missed opportunity for biodiesel, which reduces costs, provides economic benefits and results in lower prices at the pump,” Anne Steckel, vice president of federal affairs at the National Biodiesel Board, said in a statement. “Targets like this ignore reality and the law, inhibiting growth in the industry.”

The new regulations will likely also draw criticism from oil industry stakeholders, who have argued that the 15 billion gallon ethanol mandate represents a significant manufacturing challenge. Oil industry critics of the ethanol regulation have argued the mandate forces manufacturers to exceed the 10 percent “blend wall,” after which it becomes significantly more difficult to produce fuel.

The American Petroleum Institute has lobbied for a 9.7 percent market cap on ethanol fuel in order to address the blend wall issue.

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