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DC Circuit court vacates 2012 cellulosic RFS standard, affirms 2012 advanced biofuel standard

27 January 2013

The United States Court of Appeals for the District of Columbia ruled this week in a case (#12-1139) brought by the American Petroleum Institute (API) against the US Environmental Protection Agency (EPA) (earlier post), and vacated the 2012 cellulosic biofuel RFS standard while affirming the 2012 advanced biofuel standard.

API had filed the lawsuit with the DC Circuit Court challenging the Environmental Protection Agency (EPA) for what API called “unachievable” requirements for use of cellulosic biofuels in the 2012 Renewable Fuel Standard (RFS). EPA’s 2012 rule requires that refiners and importers of gasoline and diesel must use 8.65 million gallons of cellulosic biofuels despite a lack of commercial supply of the fuel—a requirement that the API at the time called “divorced from reality.”

In the opinion for the court, Senior Circuit Judge Stephen Williams wrote:

This case arises out of Congress’s command that the Environmental Protection Agency make predictions about a promising technology. While the program as a whole is plainly intended to promote that technology, we are not convinced that Congress meant for EPA to let that intent color its work as a predictor, to let the wish be father to the thought.

...EPA applies the pressure to one industry (the refiners)...yet it is another (the producers of cellulosic biofuel) that enjoys the requisite expertise, plant, capital and ultimate opportunity for profit. Apart from their role as captive consumers, the refiners are in no position to ensure, or even contribute to, growth in the cellulosic biofuel industry. “Do a good job, cellulosic fuel producers. If you fail, we’ll fine your customers.” Given this asymmetry in incentives, EPA’s projection is not “technology-forcing” in the same sense as other innovation-minded regulations that we have upheld.

Congress made commercial production of cellulosic biofuel central to the RFS program, established in 2005 and modified in 2007. The act requires that more than three quarters of advanced biofuel sold in the United States after 1 January 2022 be cellulosic biofuel.

When Congress introduced the cellulosic biofuel requirement in 2007, there was no commercial-scale production; nevertheless, Congress mandated cellulosic biofuel sales in the US. of 100 million gallons in 2010, 250 million in 2011, and half a billion in 2012 (all in ethanol-equivalent gallons).

Aware that actual production could fall short of the stated requirements, the law calls for the EPA to determine the projected volume of cellulosic biofuel production for each calendar year, based on an estimate of the Energy Information Administration (EIA). Should that projection be less than the mandated volume, the Administrator of the EPA is to reduce volume to the projected volume. Should that happen, the Administrator may also reduce the applicable volume of renewable fuel and advanced biofuels required for that year.

In 2012 RFS rule, EPA projected that 8.65 million gallons of cellulosic biofuel (10.45 million ethanol-equivalent gallons) would be produced in 2012, well short of the 500 million ethanol-equivalent gallons mandated by the Act for that year. In the same rule, EPA considered but rejected a reduction in the volume of total advanced biofuels required for 2012, stating that other kinds of advanced biofuels could make up for the shortfall.

Cellulosic biofuel production, 2010-2012
(millions of gallons)
  2010 2011 2012
EIA projected 5.9 3.9 6.9
EPA projected 5.0 6.6 8.7
Actual 0 0  

API objected both to EPA’s 2012 projection for cellulosic biofuel and to its refusal to reduce the applicable advanced biofuels volume for 2012.

We reject API’s argument that EPA failed to justify its determination not to reduce the applicable advanced biofuels volume for 2012. But we agree with API that because EPA’s methodology for making its cellulosic biofuel projection did not take neutral aim at accuracy, it was an unreasonable exercise of agency discretion.

—Opinion of the Court

Reacting to that decision, leading organizations representing biofuel producers noted that although the court vacated the cellulosic standard, it also rejected API’s argument that EPA was required to follow the US Energy Information Administration’s projections in setting its own. Similarly, the court rejected API’s argument that EPA was not entitled to consider information from cellulosic biofuel producers in setting its projection, finding that cellulosic producers were, of course, an “almost inevitable source of information” for EPA. According to the biofuel organizations, these were important decisions that give EPA flexibility in setting cellulosic biofuel volumes in the future.

The biofuels organizations strongly disagree with the court’s characterization of what EPA did in setting the volumes—EPA did not determine a reasonably achievable volume and then inflate it, the organization argue. Rather, it set the volume based on the best information available to it at the time.

Regardless, the organizations note, under the DC Circuit’s decision, EPA is free to reinstate the volumes that it had established, as long as the information available at the time would support the agency’s conclusion that those volumes were reasonably achievable.

In a joint statement, the biofuel organization stated that “although we disagree with the court’s decision vacating the 2012 cellulosic volumes, today’s decision once again rejects broad-brushed attempts to effectively roll back the federal Renewable Fuel Standard.

The biofuel organizations include the Advanced Biofuels Association (ABFA), Advanced Ethanol Council (AEC), American Coalition for Ethanol (ACE), Biotechnology Industry Organization (BIO), Growth Energy, and Renewable Fuels Association (RFA). They are reviewing the court’s decision and assessing next steps in the matter.

For its part, the API welcomed the decision.

This decision relieves refiners of complying with the unachievable 2012 mandate and forces EPA to adopt a more realistic approach for setting future cellulosic biofuel mandates.

—API Group Downstream Director Bob Greco

Greco said API continues to recommend that EPA base its prediction on the previous year of actual cellulosic biofuel production in the current year when establishing the mandated volumes for the following year. This approach would provide a more realistic assessment of potential future production, API says.

January 27, 2013 in Biomass, Cellulosic ethanol, Fuels, Policy | Permalink | Comments (18) | TrackBack (0)

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Comments

Big Oil is winning again. Wonder who they......

When will we have 'Class Actions' against Big Oil, NG/SG and Tar Sands Operators for all the direct and indirect damages they created in the last 150+ years? Beijing could be a good place to start?

Similar Class Actions could be taken against Coal fired power plants and manufacturers of polluting ICEs?

Most Provinces in Canada have started Class Actions against tobacco Cos for $$$$B to recover extra health care cost etc for the last 100+ years. With all the data accumulated, the Provinces will probably win.

The next round will probably be against sweet drinks and 1001 junk foods making so many people obese and sick and increasing health care cost by $$$$B/year?

It is time for people to wake up and take actions to preserve their health and the environment.

Class actions are gold mines for law firms. They should actively promote them.

Ethanol is not about health it is about producing an alternate to oil. We are demonstrating that with sugar cane and corn to mention a few. Cellulose ethanol is about the US Congress passing a law and expecting the engineering to solve the problem in five years.

"Class Actions against tobacco"

Showing that tobacco is harmful is pretty easy. While we may not like pollution, the problem is not the ICE or coal plants. The problem is all the people who use energy.

KitP ...we use more than twice as much e-energy per capita than the average American and we do not use any coal fired power plants or NG/SG power plants and we even stop our last nuclear plant one month ago.

We currently use about 94% Hydro and 6% wind power sources. Wind power is still a bit more costly but when properly combined with hydro it can be effectively used at 100%, i.e. by using hydro to fill in on an as required basis. With very high quality winds up north, many large wind turbines can reach over 50% average productivity, specially in winter time when more e-energy is required.

By 2015, wind may produce as much as 8% of the e-energy we use but the potential is closer to 50%.

From a strictly cost point of view, wind e-energy will soon compete favorably with much higher cost hydro plants. A 50-50 split is possible by 2040-2050 or so. Those power sources are ideal clean companions.

USA could develop another 60,000 mega-watt of hydro power around the country and couple it with another 60,000 mega-watt of wind e-energy with large turbines. That would be enough to decommission 200+ of the dirtiest coal fired power plants.

Broin is making cellulose ethanol, it is possible and cost effective, the private sector chose NOT to make enough.

“KitP ...we use ”

Harvey is never very specif about who 'we' is and where 'we' live.

One of the problems with renewable energy is that it is not where 'we' live. Only reason that renewable energy can meet demand is there is not much demand. Very few people want to live there.

@SJC
“Broin”

Really! SJC gets insulted when ever his facts are questioned. SJC should stick to commenting on surfing but please make your case about Broin.

That is OK, you are not worth making a "case" to...look it up.

KitP...if it matters to you, I was born in USA but lived most of my life in Canada (N-B, Que., Ontario and a few years in Alaska and Africa). My family has been in North America for 11 generations. Many elected to live in USA (with 30 different spellings for my last name) but the majority seems to have preferred Canada with almost as many last name variations.

B-C, Manitoba and Quebec provinces use mostly Hydro e-energy with wind being installed progressively. Labrador and Northern Quebec have very high quality wind energy potential. Over 95,000 mega-watt of wind energy could be installed adjacent to about the same size of Hydro plants, specially on the Labrador and Ungava peninsula coast.

Those two sources combined together is ideal to maximize wind turbines effective output. Hydro plants can easily be regulated to supply energy on an as required basis. Unused water is accumulated (at no cost) into the large water reservoirs for use during peak demands.

As more and more wind power becomes available, adjacent hydro plants can be over equipped with extra turbines/generators to handle larger peak demands.

New low pressure water turbines can be anchored (under water) in many rivers with good water flow and produce clean electricity without costly dams and/or water reservoirs. A few are in use between the Great Lakes. This technology could be further develop to produce clean electricity in many places.

@Harvey

Very interesting. We make our power mostly with 'clean' coal because that is what we have.

Big Oil's days are numbered (not a small number) and with growing acceptance of EVs these RFS disputes will matter less.

Today, Gov. Jerry Brown and Elon Musk unveiled the Tesla Model X with Falcon Wing doors. Looks like another home run for Tesla:

http://www.ecoinventions.ca/tesla-model-x-reveal/

Germans in the 1930s through a public health study came to the conclusion that smoking was the cause of cancer. This was known in the US although the tabaco companies managed to continue selling their products. When the tide turned in the 1980s States began to sue the industry. Unfortunately the victims saw very little if any of that money because State politicians used it to fund pet projects which had nothing to do with public health.

If the refiners had been willing to pay $20 per gallon the supply of cellulosic ethanol would have materialized, they refused so they should be fined..

KitP....be careful with using more so called 'CLEAN' burning coal. It reminds me of healthy cigarettes and tobacco chewing. Both were/are very false. Burning NG/SG is only about 25% cleaner than coal and may even be worse depending on SG leaks. Smoking tobacco should be further restricted or banned everywhere.

The same can be said about so called 'CLEAN' fossil liquid fuels for ships, locomotive, trucks, buses, cars, aircraft etc. They all have harmful emissions. Unfortunately, the world may have to live with increasing emissions for decades. The total impacts on humans health, animals, plants and climate may be more severe than we can manage.

'harmful emissions'

Once again who is being harmed? There all these people who live someplace who want to protect me from harm.

The best I can tell is that these people depend on people like me to keep them warm and stomachs full of food.

Kit, no one care what happens to you, they tend to be concerned with innocent victims. No one needs you to do anything, go away.

If anything your just another talking head from XYZ corporation. Battling in defense of the status quo is typically a sign of a weak person who cannot compete against the capable. Just like the slaves who did special favors for the masters to get "in the house" rather than have to toil in the fields. You probably have to do this because you can't depend on your actual capabilities to acheive anything and so you stand behind your masters as an excellent "yes man" and hope for special favor.

KitP...you may be one of the first few million with progressive DNA degeneration from various emissions and 1001 industrial products. If you have medical insurance, you could have it checked on a yearly basis to see if it is progressing?

If so, you may take part into future class actions for similar victims?

'progressive DNA degeneration'

OMG, I am a victim of getting old. Of course it is better than the alternative. I have tried so hard to get through life without being a victim of a criminal because it involves lawyers.

The chances of me knowingly being part of a class action suit are between slim and none.

KitP...it may be wise to read more about this coming International problem associated with emissions, junk food, industrial products, drugs etc.

Over 66% of Americans are already over-weight and some 33% are obese. That will cost you and us a lot in reduced productivity and extra health care in the near future.

DNA degeneration may may a lot more costly in the mid term?

The long term effects of progressive natural reproduction degeneration associated with our environment (emissions etc) is not well know yet but replacing ourselves may become a costly affair instead of a one night date.

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