August 31, 2017
82 Federal Register 34206 (July 21, 2017)
Docket No: EPA-HQ-OAR-2017-0091
Dear Administrator Pruitt:
Taxpayers for Common Sense (TCS) provides the following comments to the Environmental Protection Agency (EPA) on its proposed rule entitled “Renewable Fuel Standard Program: Standards for 2018 and Biomass-Based Diesel Volume for 2019,” which was published at 82 Federal Register 34206 on July 21, 2017. Thank you for the opportunity to offer comments on this proposed rule, which will dictate the level of biofuels consumed in our nation’s fuel supply in 2018 (and 2019 for biomass-based diesel). TCS has long been a critic of the Renewable Fuel Standard (RFS) program, primarily for the federal mandate’s increased costs on taxpayers and consumers. We appreciate EPA’s recognition of many of these costs in its 2018 proposed renewable volume obligations (RVOs). However, as the Agency noted, aside from increased fuel costs, EPA did not assess other costs that consumers and taxpayers bear with greater biofuels mandates, including but not limited to the following:
- Higher food and feed costs,
- Damages and failures of small engines and older vehicles that cannot run on higher blends of ethanol,
- Greater expenditures on blender pumps and other special infrastructure,
- Greater – instead of lower – greenhouse gas emissions from corn ethanol, the biofuel used to fill the majority of the RFS mandate, and
- Increased public health, environment, and social costs as sensitive land such as grasslands are converted into corn and soybean fields to grow more feedstocks for biofuels.
Overall, EPA proposes to slightly reduce overall renewable fuel, advanced, and cellulosic biofuel requirements in 2018 as compared to the final 2017 standards. EPA estimates that reducing the advanced biofuel requirements by 40 million gallons in 2018 (as compared to 2017) will result in a cost savings of $33-$45 million if less soybean biodiesel is used to fill the mandate, for instance.[[b][/b]i] As EPA estimated, savings from slightly reducing advanced biofuel volumes as compared to the current calendar year could be lower or greater depending on which types of biofuel (such as sugar ethanol) the market uses less of in order to fill the slightly lower mandate. In addition, EPA estimates that by reducing 2018 RFS mandates for cellulosic biofuels from the seven billion gallons required by law to just 238 million gallons (a proposed reduction of 97 percent), consumers would save anywhere from $6-$12 billion in added fuel costs[ii] (especially factoring in how cellulosic biofuel production has not taken off as Congress intended and these volumes are not commercially available). These estimates are rightfully presented on an energy-equivalent basis with gasoline since ethanol contains less energy content than gasoline. While EPA proposes slight reductions to certain biofuel categories in 2018 (as compared to 2017), in past years, EPA finalized rules that greatly increased biofuel volumes. In those years, EPA acknowledged that mandating more biofuels would result in billions of dollars in higher fuel costs for consumers.[iii]
We applaud EPA for placing a greater emphasis on costs in the 2018 proposed RVOs to help justify lower biofuel volumes. However, as EPA acknowledges, “the annual standard-setting process encourages consideration of the RFS program on a piecemeal (i.e., year-to-year) basis, which may not reflect the full, long-term costs and benefits of the program.”[iv] Therefore, EPA did not consider indirect costs or benefits such as “infrastructure costs, investment, GHG emissions and air quality impacts, or energy security benefits, which all are to some degree affected by the annual standards.”[v] While a comprehensive analysis of costs for all biofuel categories may be outside the scope of the rulemaking, the Clean Air Act directs EPA to consider the following factors (at CAA(o)(2)(B)(ii)) when setting both the biomass-based diesel RVO for 2019, in addition to considering a reset of overall RFS volumes in future years: (1) impact on the environment, (2) energy security, (3) commercial production of advanced biofuels, (4) infrastructure, (5) costs to consumers, and (6) other factors, including “job creation, the price and supply of agricultural commodities, rural economic development, and food prices.”[vi] Moreover, EPA may consider waivers of RFS volumes based on severe economic or environmental harm. TCS urges EPA to finalize biofuel volumes for 2018 (and 2019 for biomass-based diesel) that do not impose more costs or burdens on taxpayers or consumers.
We thank you for considering our comments on the 2018 proposed RVOs. TCS looks forward to the Agency’s upcoming reviews of the environmental impacts of the RFS (later this year), in addition to a reset of overall volumes to reduce RFS volumes to a level where they do not continue to impose unnecessary costs on taxpayers and consumers.
[i] Environmental Protection Agency, “Memorandum on Cost Impacts of the Proposed 2018 Annual Renewable Fuel Standards,” July 21, 2017. Docket No. EPA-HQ-OAR-2017-0091. https://www.regulations.gov/document?D=EPA-HQ-OAR-2017-0091-0070.
[ii] Environmental Protection Agency, “Memorandum on Cost Impacts of the Proposed 2018 Annual Renewable Fuel Standards,” July 21, 2017. Docket No. EPA-HQ-OAR-2017-0091. https://www.regulations.gov/document?D=EPA-HQ-OAR-2017-0091-0070.
[iii] Environmental Protection Agency, “Renewable Fuel Standard Program: [Proposed] Standards for 2017 and Biomass-Based Diesel Volume for 2018,” May 31, 2016. Docket No. EPA–HQ–OAR–2016–0004. https://www.gpo.gov/fdsys/pkg/FR-2016-05-31/pdf/2016-12369.pdf.
[iv] Environmental Protection Agency, “Renewable Fuel Standard Program: [Proposed] Standards for 2018 and Biomass- Based Diesel Volume for 2019,” July 21, 2017, at 34237. Docket No. EPA–HQ–OAR–2017–0091.
[v] Environmental Protection Agency, “Renewable Fuel Standard Program: [Proposed] Standards for 2018 and Biomass- Based Diesel Volume for 2019,” July 21, 2017, at 34237. Docket No. EPA–HQ–OAR–2017–0091.
[vi] Clean Air Act 211(o)(2)(B)(ii).