Finally. The Environmental Protection Agency (EPA) finalized - belatedly, it must be noted - the final volume requirements of biofuels in the US gasoline supply in the Renewable Fuel Standard (RFS) today. Because of the way the RFS limits are being handled, today's announcement set the limits for three years: 2014, 2015 and 2016. Today was the deadline for this announcement. So, yeah, finally.

According to the EPA, these are the new numbers:

Final Renewable Fuel Volumes
2014 2015 2016 2017
Cellulosic biofuel (million gallons) 33 123 230 n/a
Biomass-based diesel (billion gallons) 1.63 1.73 1.90 2.00
Advanced biofuel (billion gallons) 2.67 2.88 3.61 n/a
Renewable fuel (billion gallons) 16.28 16.93 18.11 n/a
(Units for all volumes are ethanol-equivalent, except for biomass-based diesel volumes which are expressed as physical gallons.)

As you can see, the numbers go up each year. The Obama administration is boosting the amount of corn-based ethanol and other renewable fuels in the US gasoline supply despite sustained opposition by an unusual alliance of oil companies, environmentalists and some GOP presidential candidates.

The EPA's announcement of the final rule is designed to increase production of ethanol to be blended with gasoline through 2016, a decision that could reverberate in Iowa's crucial presidential caucuses.

The agency said it will require more than 18 billion gallons of renewable fuels in 2016, most of it ethanol. The amount is less than was set in a 2007 renewable fuels law, but is more than was proposed by the EPA in May. The agency said that the demand for gasoline has risen since May, increasing the amount of renewable fuels that can be blended in.

The decision doesn't necessarily mean a higher percentage of ethanol in an individual driver's tank, and isn't likely to have much effect on gas prices. But it does mean there will a higher supply of the home-grown fuel overall.

Janet McCabe, the acting assistant administrator for EPA's Office of Air and Radiation, said the renewable fuels industry is "an incredible American success story" and the 2016 targets are a signal that it is growing.

"It's all about more choice and making those fuels more available" to consumers, she said.

More renewable fuels are good news for farm country. But ethanol critics say the levels are too high.

Oil companies have spent many years fighting the 2007 law, saying the market, not the government, should determine how much ethanol is blended into their gas. Environmental groups say that farmers growing large amounts of corn for ethanol are tearing up the land. And conservatives like Texas Sen. Ted Cruz, who is running for the Republican presidential nomination, call the government's longtime support for ethanol "corporate welfare."

The renewable fuels law sought to address global warming, reduce dependence on foreign oil and bolster the rural economy by requiring a steady increase in the overall amount of ethanol and other renewable fuels blended into gasoline over time. The RFS sets out specific yearly targets.

Since then, the EPA has said the standards set by the law cannot be fully reached due partly to limits on the amount of renewable fuels other than ethanol that can be produced. Next-generation biofuels, made from agricultural waste such as wood chips and corncobs, have not taken off as quickly as Congress required and the administration expected.

Still, the new rule setting targets for 2015, 2016 and retroactively for 2014 would represent an overall increase in the use of renewable fuels.

The new standards come as President Barack Obama and other world leaders are meeting in Paris to finalize an agreement to cut carbon emissions worldwide, and the administration says this will help achieve that goal.

The new targets are a victory for the ethanol industry, which aggressively pushed back on a 2013 proposal that would have decreased the amount of ethanol mixed into fuel. At the time, the EPA said the amount of biofuel required would generate more ethanol than many engines can safely handle.

Farm-state lawmakers – and some presidential candidates wanting to win over voters in farm states like Iowa – have strongly urged the EPA to meet the targets set out in the law. They have also successfully pushed back on calls from opponents to repeal the entire RFS. So far, the critics have had little luck getting past those supporters to change the policy in Congress.

In the presidential race, Democratic front-runner Hillary Clinton has said she will seek to strengthen the standards, and her fellow Democratic candidates have also supported it.

The issue has divided Republicans seeking the presidency.

While some candidates like former Arkansas Gov. Mike Huckabee have spoken about maintaining higher levels of renewable fuels, others like Cruz have denounced the policy. Florida Sen. Marco Rubio has positioned himself somewhere in the middle, saying the standard should not be repealed because many have made investments in it but it should be eventually phased out.

Iowa, host of the leadoff presidential caucuses next year, produces more ethanol than any other state, and the renewable fuel standard is a powerful economic and political issue. But as national security and the economy have eclipsed farming issues in many rural areas, some candidates like Cruz have felt comfortable criticizing it and have still fared well in the polls.

In March, Cruz told an audience at an Iowa agricultural forum that he has "every bit of faith that businesses can continue to compete, continue to do well without going on bended knee to the government."

Show full PR text
Statement from Secretary Tom Vilsack on Finalization of the Renewable Fuel Standard

WASHINGTON, Nov. 30, 2015—Today, Agriculture Secretary Tom Vilsack made the following statement regarding the Environmental Protection Agency's finalization of the Renewable Fuel Standard volume requirements:

"The rule released today is a positive step forward providing for continued growth in all parts of the Renewable Fuel Standard—advanced, biodiesel, cellulosic, and conventional—building on the Obama Administration's and USDA's commitment to biofuels and American-grown renewable energy. While the Renewable Fuel Standard is one piece of the equation of this commitment, it is not the only piece. Significant strategic investments by this Administration across the board in feedstock production, research, refining capacity, distribution and new market development have resulted in an a sophisticated and growing American biofuels industry.

"America's renewable energy industry has quickly expanded and evolved since 2009 when the Obama Administration embraced an all-of-the-above energy strategy. Since then, we have more than doubled renewable energy production, and today we import less than half our oil. We are saving Americans money at the pump with improved and expanded ethanol and biodiesel production. Our national security has been bolstered because we are more energy secure and also because our nation's military is a major commercial customer for U.S. biofuels. We're also combatting climate change with investments in technologies that reduce greenhouse gas emissions and provide for cleaner air. And we're building our economy by exporting U.S. biofuels to other nations, stabilizing farm prices with expanded production, and creating good jobs in small towns and rural communities.

"This unprecedented commitment is part of the reason why, even in recent years when there has been some uncertainty with RFS, we have seen continued growth in biofuels production and consumption. USDA and this Administration remain committed to using the full set of tools at our disposal to expand the use of biofuels, which support efforts to reduce greenhouse gas emissions, bring choice and savings to consumers when they fill up at the pump, support American producers, expand new markets for rural-grown and -made products, and drive economic investment in rural America."

The AP contributed to this report.


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