EPA rolls out program for renewable fuels

The U.S. Environmental Protection Agency on April 10 publicized details of the nation’s first comprehensive Renewable Fuel Standard (RFS) program.

At a press conference, EPA Administrator Stephen L. Johnson, joined by Energy Secretary Samuel Bodman and National Highway Traffic Safety Administrator Nicole Nason, discussed the RFS program, increasing the use of alternative fuels and modernizing CAFÉ standards for cars.

“The Renewable Fuel Standard offers the American people a hat trick – it protects the environment, strengthens our energy security, and supports America’s farmers,” said Johnson. “Today, we’re taking an important first step toward meeting President Bush’s “20 in 10” goal of jumping off the treadmill of foreign oil dependency.”

“While we must look at increasing the availability of renewable and alternative fuels, we must also continue to improve the fuel efficiency of our passenger cars and light trucks,” said Nicole R. Nason, Administrator of the National Highway Traffic Safety Administration. “As a part of the President’s “20 in 10” energy security plan, we need Congress to give the Secretary of Transportation the authority to reform the current passenger car fuel economy standard.”

Authorized by the Energy Policy Act of 2005, the RFS program requires that the equivalent of at least 7.5 billion gallons of renewable fuel be blended into motor vehicle fuel sold in the U.S. by 2012. The program is estimated to cut petroleum use by up to 3.9 billion gallons and cut annual greenhouse gas emissions by up to 13.1 million metric tons by 2012 -- the equivalent of preventing the emissions of 2.3 million cars. The RFS is an important first step toward meeting President Bush’s call to reduce gasoline use by 20-percent within 10 years by growing renewable and alternative fuel use to 35 billion gallons by the year 2017.

"Increasing the use of renewable and alternative fuels to power our nation's vehicles will help meet the President's Twenty in Ten goal of reducing gasoline usage by 20 percent in ten years," Secretary Bodman said. "The Administration's sustained commitment to technology investment will bring a variety of alternative fuel sources to market and further reduce our nation's dependence on foreign sources of energy."

The RFS program will promote the use of fuels such as ethanol and biodiesel, which are largely produced from American crops. The program will create new markets for farm products, increase energy security, and promote the development of advanced technologies that will help make renewable fuel cost-competitive with conventional gasoline. In particular, the RFS program establishes special incentives for producing and using fuels produced from cellulosic biomass, such as switchgrass and woodchips.

The RFS program requires major American refiners, blenders, and importers to use a minimum volume of renewable fuel each year between 2007 and 2012. The minimum level or “standard” which is determined as a percentage of the total volume of fuel a company produces or imports, will increase every year. For 2007, 4.02 percent of all the fuel sold or dispensed to U.S. motorists will have to come from renewable sources, roughly 4.7 billion gallons.

The RFS program is based on a trading system that provides a flexible means for industry to comply with the annual standard by allowing renewable fuels to be used where they are most economical. Various renewable fuels can be used to meet the requirements of the program. While the RFS program establishes that a minimum amount of renewable fuel be used in the United States, more fuel can be used if producers and blenders choose to do so.

The RFS brings the nation closer to President Bush’s Twenty in Ten goal to reduce gasoline consumption 20 percent in ten years. To achieve this goal, the Bush Administration’s Alternative Fuel Standard (AFS) proposal builds on the RFS and requires use of 35 billion gallons of renewable and alternative fuels in 2017 - nearly five times the RFS target of 2012. The AFS proposal will displace 15 percent of projected annual gasoline use in 2017 through the use of fuels, including corn ethanol, cellulosic ethanol, biodiesel, methanol, butanol, hydrogen, and other alternative fuels. The Twenty in Ten plan also calls for reforming and modernizing CAFÉ standards to increase the fuel economy of cars. This will reduce projected annual gasoline use by up to 8.5 billion gallons, a further 5 percent reduction that will bring the total reduction in projected annual gasoline use to 20 percent. President Bush has called on Congress to act on these proposals by the start of the summer driving season this year.

Charles T. Drevna, Executive Vice President, National Petrochemical & Refiners Association, said: “NPRA believes that the RFS credit trading program – the core of the program – must be understandable, allow unambiguous enforcement, and promote adequate flexibility for refiners and gasoline importers.”

Drevna said the agency has issued a reasonable framework to implement the RFS provisions in the Energy Policy Act of 2005.

Increasing demand for transportation fuels will continue to be met by a combination of increased U.S. refining capacity, additional imports of finished petroleum products, biofuels, and continued technological advances in refinery processes, Drevna said.

A free market-based fuel transportation system is the best mechanism to insure development of the requisite infrastructure to support increased use of biofuels, according to the NPRA. There is universal agreement, and the marketplace has indeed proved, that biofuels will continue to be a strong and growing component of the nation’s transportation fuel mix.

NPRA has advocated that new state renewable mandates should be preempted. New state biofuel mandates should be subject to the requirement that they be examined by EPA for their impact on either the fuel production or distribution system, according to NPRA.

NPRA members include virtually all US refiners and petrochemical manufacturers.

An environmental group, the Union of Concerned Scientists, reacted to the RFS program with a mix of praise and concern.

“Making more efficient cars and trucks and filling them up with renewable fuels can reduce global warming pollution and help break our national oil addiction, but to maximize the benefits and minimize unintended consequences, we must ensure fuels become cleaner over time,” the Union said in a statement posted on its Web site.

Noting that federal legislators are considering new RFS legislation. UCS said the lawmakers must ensure that any new policies consider the amount of global warming pollution each biofuel generates and protect land, water, and air.

"Not all biofuels are created equal," said Steven Bantz, a senior engineer at UCS. "We need to make sure we invest in the cleaner, low-carbon biofuels to substantially cut global warming pollution. If we don't, we could wind up with more problems than we have now."

Producing and using biofuels often requires energy from fossil fuels, and the total global warming pollution generated can vary depending on the biomass and land used, and the production, delivery method, and ultimate use, Bantz said. Therefore, the federal government must evaluate biofuels on the basis of global warming emissions per unit of energy they emit over their full life cycle, from the field to the tailpipe.

"Likewise, expanding biomass production to meet U.S. energy needs could have unintended consequences for the air we breath, the water we drink, and the land we value," Bantz added. New policies should establish standards for producing and using bioenergy in ways that protect air, water and soil quality; value and conserve biodiversity; and limit the risks of invasive and genetically modified plants.

Don MacKenzie, a UCS vehicles engineer, said that increasing the fuel economy of new cars and trucks is the fastest, most effective way to cut U.S. oil dependence and vehicle global warming emissions.

"Conventional, off-the-shelf technologies can increase the average fuel economy of new cars and trucks to 40 miles per gallon within 10 years, which is a 60 percent increase from today's average," he said. "The Bush administration should support fuel economy proposals in the House and Senate that require mandatory increases in fuel economy of 4 percent per year, a target the president embraced in his State of the Union speech earlier this year."

A UCS analysis shows that increasing average fuel economy standards to 35 mpg by 2018 would save consumers $13 billion in that year alone, while cutting annual global warming pollution by nearly 200 million metric tons of carbon dioxide equivalent.