The Obama administration this morning issued a notice to pull back from its controversial 2014 renewable fuel standard proposal. On today's The Cutting Edge, Greenwire reporter Amanda Peterka discusses the details of the announcement and reaction from the oil and biofuels industries. She also explains how the move by EPA will affect future renewable fuel targets.
Monica Trauzzi: Welcome to The Cutting Edge. The Obama administration makes its 2014 renewable fuel standard announcement. Greenwire's Amanda Peterka joins me with the breaking details. Amanda, the agency was under a lot of pressure on this one. What did EPA decide?
Amanda Peterka: So this morning EPA issued a notice announcing that it would not be finalizing the 2014 renewable fuel standard volume obligations, so the amount that refiners have to blend into petroleum-based gasoline and diesel -- they would not be finalizing that rule this year. We don't quite know exactly where they're going after this, but they indicated that they would take action on the 2014 rule next year. And they expressed a desire to sort of get back on the statutory deadlines that Congress set for them; by law they were supposed to finalize this by November 30th of last year. So it looks like they might take action on 2014, 2015 and 2016 at the same time next year.
Monica Trauzzi: This caught a lot of people off-guard. I mean, we all started buzzing yesterday in the afternoon. Why the sudden action by the agency, and why weren't they able to meet the deadline?
Amanda Peterka: Mm-hmm. So this week marks the 90-day period since EPA sent over its proposal to the Office of Management and Budget, so I will say something on the RFS -- it wasn't wholly unexpected that EPA would do something. There were some rumors a couple weeks ago that this might be the week where EPA decides something. But to come out with an announcement and say they weren't going to take any action this year, that was the surprise. And so the reason why it was such a challenge was that they received a huge number of comments, a huge number of pushback on this proposal. I mean, they received over 100,000 comments that they had to look through, many of them substantial -- 300 pages long from individual groups. They received pushback from both the biofuels industry, who argue that the administration was undermining their industry by setting such low targets, and pushback from the oil industry, which argued that the administration wasn't cutting deep enough.
Monica Trauzzi: And in fact now the American Fuel and Petrochemical Manufacturers have already announced that they've filed a notice of intent to sue EPA on the 2014 RFS. What additional fallout are you expecting?
Amanda Peterka: Well, I'm expecting a lot more noise about this whole process is broken, both from opponents in the oil industry and from EPA's congressional opponents on the Hill. There's long been complaints about how long this has taken for EPA to complete, and sort of, you know, why all the delays in this process, and this I suspect will only further fuel those types of complaints. There will likely also be some fallout from the renewable fuels industry. Broadly they seem to be pleased that the administration at least is not finalizing this rule that they really didn't like, but especially for the biodiesel industry -- has had a really tough year this year without a renewable fuels target and without their tax credit. So they're sort of still kind of stuck in limbo here on what their market really is going to be.
Monica Trauzzi: So in a way this kind of fuels the uncertainty surrounding the RFS.
Amanda Peterka: Yes. Yes.
Monica Trauzzi: How does this impact what we might see in future targets, in future years?
Amanda Peterka: Mm-hmm. Well, EPA -- so before today's announcement there was some talk and some worries among the biofuels industry that whatever EPA decides in terms -- in regards to its methodology, the agency would then carry out into future years. As EPA has not made a decision on the rule it's kind of difficult to see what -- or hard to figure out where they're really going in the following years, if they're really going to stick with this methodology that they've proposed for 2014 or start from scratch.
Monica Trauzzi: All right, very interesting, good reporting. Thank you for coming on the show.
Amanda Peterka: Thanks for having me.
Monica Trauzzi: The Cutting Edge will be off next week for Thanksgiving. More Cutting Edge coming on December 5th. We'll see you then.
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