EPA Proposes Renewable Fuel Standard Rules; 3.71% for 2007
07 September 2006
EPA Administrator Stephen L. Johnson today proposed a Renewable Fuel Standard (RFS) Program designed to double the US use of renewable fuels such as ethanol and biodiesel. The program, authorized by the Energy Policy Act of 2005, will promote use of fuels largely produced by American crops.
The new regulation proposes that 3.71% of all the gasoline sold or dispensed to US motorists in 2007 be renewable fuel. Last December, EPA issued a rule implementing the Energy Policy Act’s default standard of 2.78% for 2006, which will continue to apply through this calendar year.
| RFS Requirements | |
|---|---|
| Year | Billion Gallons |
| 2006 | 4.0 |
| 2007 | 4.7 |
| 2008 | 5.4 |
| 2009 | 6.1 |
| 2010 | 6.8 |
| 2011 | 7.4 |
| 2012 | 7.5 |
The EPA must set the standard for each succeeding year representing the amount of renewable fuel that a refiner, blender, or importer must use, expressed as a percentage of gasoline sold or introduced into commerce.
This yearly percentage standard is to be set at a level that will ensure that the total renewable fuel volumes will be used based on gasoline volume projections provided by the Energy Information Administration (EIA). The standard for each year must be published in the Federal Register by November 30 of the previous year.
Various renewable fuels can be used to meet the requirements of RFS program, including ethanol and biodiesel. While the RFS program provides the certainty that a minimum amount of renewable fuel will be used in the United States; more can be used if fuel producers and blenders choose to do so.
In 2006, there will be about 4.5 billion gallons of renewable fuel consumed as motor vehicle fuel in the United States. The RFS program requires that this volume increase to at least 7.5 billion gallons by 2012. The RFS program is designed to cut petroleum use by approximately 3.9 billion gallons a year in 2012—roughly 1.0 to 1.6% of the petroleum that would otherwise be used by the transportation sector—and reduce greenhouse gas emissions by up to 14 million tons annually.
This proposal also provides a preliminary analysis of the expected emissions, air quality and economic impacts of the expanded use of renewable fuels:
A reduction of 1.3% to 1.6% in carbon monoxide emissions from gasoline-powered vehicles and equipment;
A reduction of 1.7% to 6.2% in benzene emissions;
A reduction of 0.4% to 0.6% of the anticipated greenhouse gas emissions form the transportation sector in the US (9 to 14 million tons); and
An increase of between 28,000 and 97,000 tons of volatile organic compounds plus oxides of nitrogen (VOC + NOx). The effects will vary significantly by region. EPA estimates that areas such as New York City, Chicago, and Los Angeles will experience no increase, while other areas may see an increase VOC emissions from 3% to 5% and an increase in NOx emissions from 4% to 6% from gasoline-powered vehicles and equipment.
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I wonder if this really means anything. Large amounts of ethanol are now being used instead of MTBE as an oxygenation additive, and I wonder if this simply matches the increased use of ethanol for this purpose. Of course most of that ethanol is made here and coming from corn.
I also think this is a bit misguided as different biofuels have vastly different benefits environmentally. Corn ethanol is a very inefficient source of energy, with only modestly more energy out than the fossil fuel that goes into various stages of its production. In contrast soy biodiesel is significantly more beneficial in net energy production, and cellulosic ethanol has the potential to be good also. I suspect all these will be credited the same, and we won't get much benefit either environmentally or in energy independence if everyone simply uses corn-based ethanol to meet this requirement.
Posted by: zach | 07 September 2006 at 09:40 AM
Zach: Good point about mixing all these fuels into one regulatory category, but I think this situation will sort itself out in just a few years. Cellulosic is right on the verge of going mainstream, and once it does, its superior economics (compared to starch ethanol) will provide plenty of incentive for producers to switch to that technology.
I think this is one time when the current administration got something right--legislate a strategy ("use more renewables") and let the marketplace work out the tactics (the exact mix of fuels and their sources).
Posted by: Lou Grinzo | 07 September 2006 at 11:27 AM
We also have fuel algae waiting in the wings, almost ready for primetime. You can get both sugars and oils from it, which means ethanol/butanol and biodiesel in huge amounts.
Posted by: Cervus | 07 September 2006 at 11:39 AM
Let's not forget about sweet sogrum, which yields about 70% more ethanol than corn (on a per acre basis). Texas has tons of land that is perfect for it.
Oh, yeah, Jatropha. Excellent biodiesel source.
Posted by: John | 07 September 2006 at 12:00 PM
Why 3.7 percent we are using 10% in many states just to replace MTBE. the oil company showing record profits
should be forcd to shoulder the expense and the percentage should be higher.
Posted by: kevin | 07 September 2006 at 01:37 PM
The EPA should adopt a rule requiring 100% by 2010. That way the problem would be solved.
Posted by: Robert Schwartz | 07 September 2006 at 04:04 PM
"The EPA should adopt a rule requiring 100% by 2010. That way the problem would be solved."
Hah! OK... So all we need to do is write a law and make it so. Problems solved... I guess I don't need to worry about peak oil or global warming anymore...
Posted by: JesseJenkins | 07 September 2006 at 04:21 PM
It's worth noting, that (as the article mentions) 4.5 billion gallons of biofuels are expected to be consumed in 2006, meaning that the 4.7 billion gallons target for 2007 isn't much of a stretch. This standard doesn't appear to be driving renewables quite as much as the ban on MTBE as an oxygenate (and its subsequent replacement with ethanol), at least so far. In later years, the standard may outpace other market drivers.
It's also worth noting that while the billions of gallons of gasoline mentioned above sound like big numbers, this standard amounts to a whole lot of nothing when you consider the scale: the renewable fuels standard will reduce total petroleum consumption in the transportation sector by just 1-1.6% by 2012. To be fair, a 1% reduction isn't nothing, but it does dwarf in comparison to the kinds of petroleum reductions that we must - and certianly can - achieve in order to reduce our reliance on mostly imported and increasingly expensive oil and to mitigate and stabalize our impact on global climate change.
From next-generation biofuels (BTL synthetics, cellulosic ethanol, biobutenal, etc.) to plug-in and grid-indepent hybrids and from vehicle downsizing to increased fuel efficiency, we could easily slash both petroleum imports and greenhouse gas emissions if the will was there. Perhaps President Bush ought to be looking West towards the Governator for ideas about what a concerted effort to reign in petroleum use and greenhouse gas emissions really looks like. Maybe this is why the Oregonian editorial board recently dubbed Gov. Schwarzenegger the real 'leader of the free world' on these kinds of issues...
Posted by: JesseJenkins | 07 September 2006 at 04:39 PM
That is right. King Canute couldn't do it. But the Federal Government is all powerful.
Posted by: Robert Schwartz | 07 September 2006 at 05:03 PM
Jesse,
I bet Robert was joking.
As for California leading, well, rhetorically at least. On the greenhouse front, as far as I see, they've decided to think about it for three years before implementing anything of substance and then it should be "cost effective", whatever that exactly means, but it could be awfully close to Bush's position in practise.
I also all too well remember the zero emission mandate, which in the end got junked. This all seems very aspirational to me.
Not that I mind, rather the opposite, to me it shows how sensible policy makers can be in spite of radical rhetoric ;-)
Either we'll see cost effective plug-ins/cellulosic ethanol, in which case, the rest of the nation will quickly follow California, or even adopt at a similar pace,
or we don't, in which case I am sure they'll let the 50% requirement quietly die.
Posted by: Heiko Gerhauser | 08 September 2006 at 01:36 AM
While we are passing laws, let's get congress to pass a law that every personal transport vehicle that weighs more than 2000 pounds will be assigned a dollar a pound tax, each year. The monies collected to be used exclusively for alternative fuels development.
Posted by: Lucas | 08 September 2006 at 09:29 AM
This seems like part of keeping the percentage rising year after year. If you believe in market systems as the solution to most problems, then you would believe that cellulosic ethanol will cost less to make than corn ethanol and that cellulosic would win out and provide the future percentage increases over time.
Since maybe 4 out of the 140 million cars can now take E85, even if we had the ethanol to go to E85, which we don't, there are not enough cars to use it. We have to wait until the fleet is replaced. Converting a car is not cost effective. I would make it law that all new cars sold be FFV.
Posted by: SJC | 09 September 2006 at 09:05 AM
All cars can run with 10% Ethonal why make more laws this country uses 140 billon gallons of gas a year
10% would be 14 billon gallons about three times more ethnol than we make now.As far as E85 read consumer report milage down 25 percent a Tahoe gets 12 miles to the gallon on E85
Posted by: kevin | 15 September 2006 at 04:23 PM
What happened to the EPA repeal of the oxygenate additive. Refiners can produce gasoline which has the correct amount of oxygen and octane without adding ethanol. Seems that that makes far more sense than building a whole boondoggle infrastructure which compromises the food supply.
tetsuo
Posted by: tetsuo | 20 March 2007 at 03:31 PM