EPA Must Make Good Lost Biofuels Gallons

ifr170804–194
EPA Must Make Good Lost Biofuels Gallons
Scott Irwin, Agricultural Economist - University of Illinois

The courts have ruled in favor of biofuels made from corn and soybeans. Todd Gleason has more on what the ruling could mean for ethanol and biodiesel.

The U.S. Circuit Court of Appeals for Washington… 2:32 radio
2:40 radio self-contained

The U.S. Circuit Court of Appeals for Washington, D.C. under took a case to define the meaning of three words in the Renewable Fuel Standard written by the United States Congress. The three words, a phrase, are “inadequate domestic supply”. Congress through them says University of Illinois Agricultural Economist Scott Irwin granted the Environmental Protection Agency, the EPA, the right to grant a waiver allowing energy producers not to follow the law.

Irwin :12 …you cannot require someone to consume it.

Which commonsense would say, yes, you need that kind of escape clause in the statute that would say if a biofuel is not being produced you cannot require someone to consume it.

The Obama Administration’s EPA interpreted the clause to also mean inadequate domestic demand, and consequently limited the mandated use of biofuels in the United States. The court ruled on how the EPA limited biofuels in 2016, however, it may be, thinks Irwin, that EPA will need to make good actions it took in 2014, 2015 and 2016. This may mean the gallons of biofuels not mandated for use in those three years will have to be produced and used.

Irwin :27 …cuts that have not been basically declared illegal.

Quote Summary - That’s right, and they even conveniently provided a table in the ruling with their calculations of how much mandate was waived that should not have been. In the three years this added up to 2.24 billion gallons of ethanol equivalents was at play in the cuts that have not been basically declared illegal.

It would take about 800 million bushels of corn to make that much ethanol. However, because there are two parts to the RFS relating to ethanol, it’s not likely corn based ethanol will be the big winner when it comes to making up the lost gallons.

Irwin :23 …would change dramatically with this rule making.

Quote Summary - Because of the E–10 blend wall I think, ultimately, the beneficiary of this will be biodiesel or more broadly speaking biomass based diesel. It has been filling the gaps in the E–10 blend wall in the ethanol mandate for a number of years and I don’t see why that would change dramatically with this rule making.

The back fill will require about one-point-five billion gallons of biodiesel. It would use about 11 billion pounds of feed stock. The number one feed stock is soybean oil.