Once Again 2012 Finds Biodiesel in a Jam

Nearly all readers of this newsletter know that the Energy Independence and Security Act of 2007 (EISA) authorizes EPA to implement annual volume requirements of the blending of ethanol and biodiesel under the Renewable Fuel Standard (RFS). In addition, EISA gives EPA the discretion to increase the annual 1 billion gallon biodiesel blending floor upwards through the rulemaking process if EPA believes an increase in biodiesel blending is warranted.

In June of last year, EPA proposed raising the RFS volume requirement for biodiesel from the 1 billion gallon floor in 2012 to 1.28 billion gallons in 2013. The EPA made this proposal after rigorous economic and environmental reviews showing that the 1.28 billion gallon requirement is readily achievable in a sustainable manner, yielding tremendous benefits to the nation in terms of economic growth, national security and the environment.

Because the increase must be finalized through the rulemaking process, the White House’s Office of Budget and Management (OMB) must sign off on the rulemaking. Unfortunately, on December 27, 2011 the Administration announced that it was delaying the final 2013 volume requirement, saying the proposal needed further review.

So to the reader, what’s this really mean?

If the Administration does not allow the biodiesel industry to grow in 2013, it is a huge obstacle to the continued growth of the biodiesel industry (and potentially ethanol industry) because in effect the White House is saying that allowing 280 million gallons of growth in biodiesel isn’t a viable alternative to replacing 280 million gallons of petroleum diesel. (As a comparison, BP leaked 210 million gallons in the Gulf of Mexico in three months.) And stagnating growth in effect allows opponents to renewable fuels to begin making a case that the EISA legislation needs to be rescinded – a fatal blow to all renewable fuels. In addition, this rulemaking could set a precedent for future biodiesel growth under the RFS, potentially determining whether the EPA will ever move beyond the 1 billion gallon minimum established under the law.

So what needs to be done?

Renewable fuels are more than a dollars and cents cost analysis versus petroleum fuels. Renewable fuels are about US jobs, not sending US dollars to buy crude oil to people who just might not like us (national security), plus reducing tailpipe emissions.

Investors in MnSP need to contact their elected officials and ask them to apply pressure on the White House to allow future growth in the biodiesel industry. EPA has indicated that they want to finalize the 2013 biodiesel volume within the next 45 days or so, so time is of the essence.

Please keep here and you will be taken to the NBB for a sample letter to reference and the addresses that you should send copies of your letter to.  All information is referenced to the right of the page you are directed to.