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EPA’s Choice: American Jobs and Innovation, Or Oil Industry Profits?
Posted 27 May 2015 in
This post was authored by Brent Erickson, an Executive Vice President at the Biotechnology Industry Organization, a member of Fuels America. It is cross-posted from Medium.
The Environmental Protection Agency (EPA) and White House Office of Management and Budget (OMB) hold the future of the nation’s renewable fuels policy in their hands. The future of America’s energy security and economy will turn on the EPA’s decision in the coming weeks whether to maintain the foundation of the Renewable Fuel Standard (RFS) or give in to the oil industry’s construction of a “blend wall” when the agency proposes new rules for the 2014, 2015 and 2016 RFS obligations. The agency has a stark choice to make and two disparate options: either cave to the oil lobby and allow oil companies to maintain monopoly control of the motor fuel market or choose our rural economies and advance American innovation.
The RFS was enacted to stimulate investment in research, development and infrastructure for renewable fuel, particularly to produce advanced biofuels. The law gives the EPA responsibility for developing and implementing rules to ensure that there will be a market for all domestic renewable fuel produced up to the volumes prescribed in the statute. Back when Congress was considering the RFS, oil companies fought tooth and nail against a part of the bill that I call the “Consumer Choice Provision” (CCP). This provision directs the EPA to set annual Renewable Volume Obligation (RVO) levels based on the renewable fuel industry’s ability to produce and supply biofuels. The oil lobby instead wanted a law that would have allowed the EPA to set RVO levels below those in the statute if the oil industry simply refused to invest in renewable fuel infrastructure. Essentially, this would have allowed the oil industry to control the way EPA calculates renewable fuel volumes under the RFS — and block competition in our motor fuel marketplace. Had Congress granted the oil lobby what it asked for, oil companies would have had a regulatory mechanism guaranteeing their monopoly at the pump forever, leaving America with more foreign oil imports, more pollution and spills, and more jobs and investment shipped overseas.
Instead, Congress designed the RFS to increase America’s energy security, lessen our dependence on foreign oil (which often comes from hostile regions), extend its commitment to America’s rural communities and green energy investors and innovators, and encourage infrastructure development. The RFS now supports more than 852,000 jobs across America. And thanks to the promise of the RFS, green energy investors have brought three commercial scale cellulosic ethanol facilities online, producing the world’s cleanest motor fuels from agricultural residue.
In the face of this challenge to their market monopoly, the oil industry has grown increasingly reluctant to comply with the RFS. More and more, oil companies have refused to invest in infrastructure for renewable fuel, despite their obligation to do so under the law. Instead, the oil industry has invested in a lobbying effort with hundreds of millions of dollars behind it, pressuring the EPA to thwart the spirit and intent of the RFS. Even oil interests from Saudi Arabia have entered the fight.
In 2013, the EPA caved to oil lobbyists and issued a proposed rule that tossed aside the Consumer Choice Provision, changing the rules on renewable fuel investors midstream and threatening hundreds of thousands of jobs. Just as the advanced biofuels industry was reaching a commercial stage where new biorefineries could be built at lower capital costs, the EPA’s proposed rule chilled investment in the industry. The Administration later took the disastrous proposal off the table, but much of the damage has already been done; since 2013, an estimated $13.7 billion of investment in advanced biofuels has been frozen. $13.7 billion.
When the EPA releases the proposed rules for 2014, 2015 and 2016 in the next week, it must choose between rural economies and American innovation on the one hand and oil company profits on the other. Oil companies are pouring millions into a lobbying effort to convince EPA to do what Congress refused to do nearly a decade ago: propose a rule that would set lower RVO levels based on the oil industry’s refusal to comply with the law.
It isn’t just the biofuels industry that should be worried. If the EPA allows the world’s cleanest motor fuels — a product of American labor, innovation, and investment — to be threatened, simply because the oil industry refuses to live up to its commitments under the law, what can we expect will happen to other clean energy and climate policies? The choice is clear: America’s rural economies or more imported oil from hostile foreign regions; 852,000 American jobs supported by the RFS, or more pollution and spills. Let’s hope that instead of protecting the oil industry’s monopoly and stranglehold on our gas prices, the EPA decides to choose rural economies and American green energy innovation.
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EPA’s Choice: American Jobs and Innovation, Or Oil Industry Profits?
