The EPA's decision to address concerns with the Renewable Fuels Standard (RFS) may provide a temporary solution to prevent increased use of potentially damaging E15 gasoline or a possible surge in gas prices, but a sustained plan for future action is still needed. AAA is urging Congress to provide the Environmental Protection Agency with the authority and direction to reduce RFS requirements for conventional biofuels.
The EPA's Final 2013 Renewable Fuels Standard maintains target volumes for ethanol and extends blender compliance for 2013 by four months. "AAA praises the decision by the EPA and it's acknowledgement that there are constraints to the market's ability to consume renewable fuels as directed by the RFS," said Bob Darbelnet, president and CEO of AAA. "However, it is clear that Congressional action is still needed to provide the EPA with the authority and direction needed to adjust unachievable fuel targets in the future."
"Congress and the EPA must work together to protect consumers from unachievable fuel mandates and potentially volatile gas prices," continued Darbelnet. "While ethanol can support jobs and promote energy independence, the RFS requirements must be implemented in a responsible manner without harming consumers."
Darbelnet provided letters to the EPA administrator and key members of Congress expressing his concerns.
The RFS requires renewable fuels such as ethanol to be blended into gasoline in increasing amounts each year. When Congress implemented the requirements, policymakers predicted that U.S. gasoline consumption would continue to rise, which would support correspondingly higher ethanol use. In recent years though, gasoline consumptions has remained relatively flat due to more fuel efficient vehicles, a weaker economy and changes in driving habits.
Prior to recent EPA action, the volume of ethanol required to be blended in 2013 was likely to have exceeded the amount possible through the use of E10 gasoline. E10 contains up to 10 percent ethanol and represents more than 95 percent of the nation's fuel supply. Without a reduction in the RFS requirements, fuel blenders may have hit a "blend wall" and been unable to achieve federal requirements without increasing the usage of potentially-damaging E15 gasoline, which contains up to 15 percent ethanol.
"E15 gasoline is simply not compatible with existing infrastructure or for use in the vast majority of vehicles on the roads today," continued Darbelnet. "E15 can put motorists at risk of vehicle damage and voided warranties, which means it is not a viable option for meeting current RFS requirements."
Blenders unable to meet RFS requirements would be subject to significant fines. This could affect gas prices by burdening blenders with unsustainable costs and by incentivizing expanded gasoline exports given that RFS requirements only apply to domestic fuel sales. These consequences could restrict gasoline supplies and result in significant increases in gas prices paid by motorists if the EPA does not have a sustainable plan in place to adjust the RFS as required.
"It is time for Washington to send a clear signal that action will be taken to prevent serious problems for motorists," continued Darbelnet. "While the many benefits of the RFS should not be dismissed, policymakers must ensure adequate and safe fuel supplies for American consumers."
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