Energy, Environment, Carbon, Climate, Renewables, EVs….EPA has a Rubiks Cube on their Hands They Don’t Know How to Master.

By Doug Durante, Executive Director, Clean Fuels Development Coalition
Special to The Digest

The final “set” rule for the volume obligations under the Renewable Fuel Standard released recently has sent the biofuel world into a tizzy and once again reveals the Administration’s misguided obsession with EVs and the seeming disdain for biofuels.

Let’s get the Rubik’s Cube guy to help us figure out the puzzle that is the EPA and the Biden Administration’s strategy for energy and the environment. You know, the young guy who was all over the news last month for setting a new world record by solving the Rubik’s Cube in 3 seconds. Clearly, he can see how things go together, unlike the mishmash of rules, regulations, policy initiatives, and legislation we are witnessing.

First of all, will someone tell the Administration “all right, already, we get it, they like EVs” — despite mounting political backlash and despite their blinders to the fact that gasoline isn’t going anywhere soon.  Stop forcing square pegs into round holes thinking tax incentives and mandates will overcome market realities. (see CFDC Issue Brief—Reality EV: No Silver Bullet)

Let’s start with the multipollutant rule. The projected benefits from this rule as they pertain to automobiles are based on a level of EV market penetration that gets further from reality every day. Whether it is 150 house members joining on a letter telling the Administration to slow down, or states playing tit-for-tat and banning EVs, someone at EPA needs to admit they may be overstating the case. Agency testimony at several hearings recently confirmed their projected benefits assume that in 2032 68% of the new vehicles will be battery powered EVs.  That is preposterous.  Even with tax incentives –which the auto industry says have already peaked—and other goodies, that is a number we will not see in less than a decade. The auto industry, through its global trade group that represents 98% of all cars manufactured today, took it one step further last week and said the emission rules proposed by EPA were “neither reasonable or achievable”.  But the Biden Administration seems oblivious to these signals, just last week they announced they intend to provide $2 billion in grants to keep the EV movement afloat.

But before environmentalists start putting my picture up on a dart board, even if I am wrong and we can reach those goals, what exactly do they think is going to power our transportation and defense system during the next decade? Of course, its going to be petroleum, the majority of which is gasoline.

Well, turn the Rubik’s Cube and take a look at the RFS. How does that fit? According to the set rule released last week, it doesn’t seem to fit much. EPA has a history of holding their nose when dealing with biofuels, especially ethanol. They have always done the minimum and only when political pressure forced them to. The set rule was a landmine in the RFS that few in the industry focused on until it became clear EPA had the pen in their hand to set volume obligations.  At least for ethanol it came out OK, EPA was able to add 250 million gallons from a previous shortfall but had no authority to go beyond the cap on corn/starch ethanol.  While I am sure they would have liked to do so, politically it would be impossible to set a volume for conventional ethanol less than what we produce and less than what the enabling legislation called for.  At 15 billion gallons I am sure in their mind that’s the end of that and we don’t need to hear from those perpetually annoying folks for three years.

Plus, they know they have a couple grenades they can roll into the room, which I’ll get to in a minute. But back to the multipollutant rule:    By ignoring the increased particulates that will come from gasoline direct injection engines, the 95% reduction in pm from gasoline the rule credits itself with will not be there, so what has EPA done in this proposal to reduce carbon and toxic emissions to protect public health? General Motors is on record as saying 98% of the fine pm from gasoline emissions come from aromatics. High octane low carbon ethanol could replace those toxic aromatics and the fine particulates that will increase with the GDI engines.

So lets twist the Rubiks cube back to the RFS—EPA and the Administration have from the beginning of their term seemed to find anywhere but gasoline to focus their efforts. Aviation, marine, and even rail use of ethanol and biofuels have been hailed as new frontiers when the 140 billion gallons of gasoline wait on the bench hoping to be called into the game.  So what about that box of grenades?

The renewable and biodiesel folks would seem to have a legitimate gripe—the capacity is clearly there and with market assurances—which is what the RFS is all about—they could produce more.  Without a larger volume obligation, why would they?  Well, EPA pulled out one of those grenades, handed it to the RD/BD crowd and said you can always go after ethanol RINS.  Use your 1.5-1.7 multiplied value and we’ll both be happy—you get a bigger market than what we call for and we get a smaller ethanol market than what we call for.

Am I making this up? Hardly—EPA’s exact words when explaining why they didn’t call for more under the diesel category were “Moreover, BBD can also be driven by the implied conventional renewable fuel volume requirement as an alternative to using increasing volumes of corn ethanol in higher level ethanol blends such as E15 and E85.”

Why would our EPA look for ways to discourage using increasing volumes of corn ethanol…..gee, maybe because they don’t like it?  Ya think?

And don’t forget the effort to have Electric Vehicles shoehorned into the RFS.  How does an electric vehicle clean up the gasoline in the car next to it?

There is a role for EVs.  There is a role for cleaner diesel fuels. There is a role for ethanol in gasoline.  But pitting one fuel against the other is no answer, and in terms of protecting public health, reducing carbon, and lessening our dependence on imported oil, shameful.  Five billion gallons of RD, which the American Fuel and Petrochemical Manufacturers said last week is still on track, generates 3.5 billion extra RINS—RINS that an obligated party can buy their way out of using corn ethanol.  With estimates as high as 8 billion gallons for RD, the ethanol industry could be hurtling backwards. And if you think the Administration will not make another run at getting EVs into the RFS you are mistaken.   Domestic ethanol is a billion-dollar industry—why would we not want more of it, not less?

So let’s get the Rubik’s Cube guy, sit him down with the Biden Administration and EPA and have him help them to make things line up. Climate, carbon, health, cars, energy security, rural development, MSATs, EVs, ethanol producers, refiners–it’s all there for the fixing.  Let’s keep the RFS categories separate, as each has their own value, and the sum of the parts will be to the benefit of our country. The comment period for the multi pollutant rule has closed but there are plenty of ways to push EPA to rethink all this and do more to clean up the gasoline they themselves admit we will still be using.

Allow corn ethanol, as it approaches net zero carbon to qualify as an advanced biofuel. Pass the Next Generation Fuels Act that systematically, at no cost, eliminates regulatory barriers that stymie a free market. Fix EPA models. Set emission standards and not only allow but encourage the broadest mix of vehicles possible to meet those standards.

Maybe then the colors of the Rubik’s Cube can start to line up.