API files lawsuit against EPA for mandating the use of nonexistent biofuels

WASHINGTON, July 25, 2012 – The American Petroleum Institute (API) filed a lawsuit with the D.C. Circuit Court late yesterday challenging the Environmental Protection Agency’s (EPA’s) mandated use of nonexistent cellulosic biofuels in the 2011 Renewable Fuel Standard (RFS).

“EPA’s unattainable and absurd mandate forces refiners to pay a penalty for failing to use biofuels that don’t even exist,” said API Director of Downstream and Industry Operations Bob Greco. “The mandate is effectively an added tax on gasoline manufacturers that could ultimately burden consumers.”

The Clean Air Act requires EPA to determine the mandated volume of cellulosic biofuels each year at “the projected volume available.” There was no commercial supply of the fuel in 2011, according to EPA’s own records. However, EPA required refiners and importers of gasoline and diesel to use or pay for credits to cover 6.6 million gallons of the nonexistent biofuels.

“EPA is directed to set the fuel requirement at a realistic volume but the agency continues to mandate the use of biofuels that do not exist,” Greco said.

EPA denied API’s 2011 petition for reconsideration of the mandate in May and continues to mandate the nonexistent biofuels this year at even higher levels. API filed a similar court challenge against EPA’s unattainable 2012 cellulosic biofuels requirements in March.

API supports a realistic and workable RFS and continues to recommend that EPA base its prediction on at least two months of actual cellulosic biofuel production in the current year when establishing the mandated volumes for the following year. This approach would provide a more realistic assessment of potential future production rather than simply relying on the assertions of companies whose ability to produce the cellulosic biofuel volumes EPA hopes for is questionable.

API represents more than 500 companies involved in all aspects of the oil and natural gas industry, leaders of a technology-driven industry that supplies most of America’s energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers more than $86 million a day in revenue to our government, and, since 2000, has invested more than $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.