Congress and President Bush determined that the United States should be producing specified amounts of cellulosic biofuel as part of the Energy Independence and Security Act of 2007. The trouble with the approach in 2007, which is still a problem today, is that a technology to produce cellulosic biofuel economically does not exist to the extent that the legislation requires. So, the Environmental Protection Agency (EPA) has lowered the requirement for cellulosic biofuel every year. However, its lower requirement is not low enough because despite mandates, industry still cannot produce the lowered amount. So, now EPA has decided to change the definition of what constitutes cellulosic biofuels so that it can still require larger numbers than are feasible. The new definition allows an energy product that is 75 percent cellulosic to count as if it is 100 percent cellulosic.[i]
The Expanded Definition
The EPA has expanded the definition, called a pathway, of cellulosic and advanced biofuels to include liquefied and compressed natural gas produced from biogas and landfills.[ii] EPA is essentially inflating cellulosic fuel production so the numbers are more in line with their prediction of high cellulosic production. In reality, EPA is re-categorizing an existing type of fuel to be cellulosic biofuel. To a lot of observers, it appears that what the EPA is really doing is lowering its standards to meet its outrageous mandates and to comply with a law that no longer makes sense.
In 2012, a federal court ruled that the EPA could not require refiners to blend non-commercially available biofuels into gasoline.[iii] Mandating more cellulosic biofuels than are commercially available forces refiners to buy millions of dollars of compliance credits (called Renewable Identification Numbers or RINs) to pay for not using the cellulosic biofuels that they cannot buy. Thus, EPA is punishing refiners for the failure of producers to make enough cellulosic biofuel to meet EPA’s mandate. Despite the court’s ruling, for 2014, EPA is requiring refiners to blend 17 million gallons of cellulosic biofuel into the fuel supply, considerably higher than last year’s requirement of 810,000 gallons.[iv] In order to meet the substantially higher requirement, EPA needed to make the definition change.
Cellulosic biofuel production in July, before the EPA’s rule change, was just 4,156 gallons for a seven-month total of 62,187 or just 0.4 percent of the proposed 2014 requirement. After the EPA announced its rule change, production in August totaled 3,492,106 gallons, with all of that production coming from newly qualified natural gas biofuels.[v] Thus, due to the definition change, for the first 8 months of 2014, refiners have blended 3,554,293 “cellulosic” gallons into the fuel supply– about 21 percent of EPA’s proposed requirement for 2014.[vi]
To fully meet the proposed 2014 requirement, EPA must be banking on the continued monthly production of liquefied and compressed natural gas from biogas and landfills at around the August level.
But, EPA did not stop there with definition changes. In the final rule, EPA is also allowing renewable electricity made from certain biomass sources to qualify under the renewable fuel standard if that electricity is used to power electric vehicles. EPA’s rationale is as follows.
The statutory definition of cellulosic biofuel includes “renewable fuel derived from any cellulose, hemicellulose, or lignin that is derived from renewable biomass and that has lifecycle greenhouse gas emissions, as determined by the Administrator, that are at least 60 percent less than the baseline lifecycle greenhouse gas emissions”. Although the renewable fuel standard enacted in 2007 has so far been used to boost the ethanol and advanced biofuels sectors, because the standard applies broadly to biomass-derived transportation fuel, EPA has determined that renewable electricity made out of biogas from landfills, municipal wastewater treatment and solid waste digesters, and agricultural digesters meets the 60 percent greenhouse gas reduction threshold needed to qualify as a cellulosic biofuel.
How EPA intends to ensure that the qualified biofuels producing electricity are powering electric vehicles, and not the coal, natural gas, or nuclear energy that are also generating electricity, is clearly a question in determining what qualifies under this new pathway.
The Environmental Protection Agency recently expanded the definition of what constitutes as cellulosic biofuel, which many believe is a political move that unlawfully tries to revise a statutory definition for cellulosic biofuels to artificially boost production numbers of a generally non-existent fuel and help fuel producers meet the overly ambitious 2014 targets. EPA is essentially inflating cellulosic fuel production so the numbers are more in line with its prediction of high cellulosic output for this year. But, in reality, EPA is just re-categorizing an existing type of fuel as “cellulosic” in order to meet its proposed 2014 requirement. EPA should be basing the mandate on accurate numbers that are truly 100 percent cellulosic and not on exaggerated, bogus numbers that do not measure what actually is cellulosic.
The federal biofuels program has become an absolute disaster because it is based upon a law that doesn’t reflect reality. Lowering standards and changing definitions will not alter the fact that the law on the books is nonsensical; it just leads to nonsensical behavior on behalf of those trying to implement the broken law.
Source: Institute for Energy Research
Date: Oct 16, 2014