Jobe sends warning letter to Obama as EPA preps RFS rule for OMB

U.S. EPA may be sending the 2014 renewable fuel standard (RFS) final rule to the Office of Management and Budget later this week, according to the National Biodiesel Board, and indications suggest that the EPA and the Obama administration are considering leaving the biomass-based diesel program at 1.28 billion gallons while possibly adding a small increase for the overall advanced biofuels standard, compared to its proposed rule released last fall.

In a May 21 letter to Obama, Joe Jobe, the CEO of the NBB, wrote, “You need to know that this decision would have lasting, damaging consequences for the jobs and economic activity supported by the U.S. biodiesel industry, while undermining your efforts to boost U.S. energy security through clean, domestic energy production.”

A modest increase in the advanced standard while keeping the biomass-based diesel subset at 1.28 billion gallons would likely mean more imported sugarcane ethanol from Brazil versus domestic biodiesel blending.

“To be clear, such a decision would serve only to encourage large volumes of imported biofuels from overseas, while crippling the U.S. biodiesel market,” Jobe wrote to the president. “Aside from sending American jobs overseas, this would undermine the fundamental goals of the RFS of boosting U.S. energy security while creating new domestic energy production. It was never the intent of Congress, nor, I’m confident, of your administration, that the RFS would serve to stimulate additional imports of foreign fuels. In fact, one of the primary goals of the RFS was to lessen our dependence on imported fuels and diversify the domestic energy supply, including in the diesel fuel pool.”

Jobe goes on to say, “I remember vividly your leadership as a Senator in introducing the American Fuels Act of 2006, which was the initial policy proposal that ultimately became the RFS2. It proposed adding a renewable requirement to the diesel fuel pool, which the original RFS did not have. It proposed requiring 2 billion gallons of biomass-based diesel by 2015. The biodiesel industry nearly achieved that level of production in 2013, making the advanced biofuel category of the RFS a huge success story. However, the EPA’s proposal would undercut that success. … We are extremely perplexed as to why the administration would seek to undermine the only EPA-approved advanced biofuel that has reached commercial production nationwide. Should EPA fail to raise the biodiesel volume and increase the advanced biofuels program in 2014, we would see a significant retreat in biodiesel production from 2013. In addition, given current markets, it would lead to Brazilian imports of sugar cane ethanol. The consequences of this policy would be the closing of at least 50 biodiesel plants. A recent survey of U.S. biodiesel producers found that more than half (57 percent) of US biodiesel producers have stopped producing altogether since the proposed rule came out and 78 percent have reduced production.”

The letter concludes by Jobe writing, “This is bad policy. It is bad for the administration, it’s bad for producers, it’s bad for investors, it’s bad for the environment, and it’s particularly bad for those of us who took cues from Congress and your administration and made the commitments to build a U.S. renewable fuels future. We urge you to stand behind your consistent support for renewable fuels by approving a modest increase in both the biodiesel and overall advanced biofuel categories that have thus far proven successful under your stewardship of the RFS.”