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Biofuels Mandate Stirs Up Lawsuit

Brian Hicks

Written By Brian Hicks

Posted July 27, 2012

The American Petroleum Institute has sued the U.S. government – the second such lawsuit in less than half a year.

According to the suit, the API claims that no cellulosic biofuels were available for commercial purchase.

This is a problem because under the Renewable Fuel Standard, the EPA mandated refineries to use at least 6.6 million gallons of the biofuel. The oil and gas industry has to pay fines if it does not meet that quota, so non-availability of the fuel for purchase leaves the API between a rock and a hard place.

This isn’t the first entanglement between the API and the EPA; in May, an appeal made by the API requesting revision of the mandate was denied by the EPA.

The EPA stated that it is reviewing the case and referred to the fact that by Congressional license, the EPA can and does take market factors into account in its enforcement of the mandate.

The fuel mandate in question was first signed into law by former President George W. Bush back in 2006.

At that time, the idea was that a steady shift toward clean biofuels would relieve the nation’s oil import pressures. Corn-based ethanol as a first step would ultimately transition to cellulosic biofuel. But of course, things didn’t quite work out that way.

Federal subsidies expired, the world’s economy tanked, and costs rose everywhere. As a net result, the EPA has had to radically revise its cellulose requirements downward, from the 500 million gallons proposed for 2012 to a mere 8.7 million gallons.

To add to the EPA’s woes, its stance on biofuels is under assault from agricultural and livestock lobbies and related groups.

Their complaint is that the nation’s dependence on corn-based ethanol is consuming far too much of the national crop farming effort.

Currently, more than 40 percent of the nation’s corn crop is directed toward the production of corn-based ethanol. In view of the severe ongoing drought, they claim such requirements are making a bad situation worse.

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