EPA's Biofuels Proposal May Contradict Congressional Intent

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EPA’s Biofuels Proposal May Contradict Congressional Intent
Scott Irwin, Agricultural Economist - University of Illinois

The biofuels proposal U.S. EPA put forth this week appears to give the agency authority Congress did not intend. Todd Gleason has more from the University of Illinois.

The proposed rulemaking asserts…
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The proposed rulemaking asserts EPA’s right to extend small refinery waivers without reallocating the congressionally mandated gallons. In this case that would be corn-based ethanol blended into the nation’s regular gasoline supply at the rate of no more than 15 billion gallons annually says University of Illinois Agricultural Economist Scott Irwin.

Irwin :28 …not sure that they will be able to make that hold.

Quote Summary - It seems like that could be challenged in court. It is easy to establish that this was the most important policy decision EPA had to make for this rulemaking and it said “no way, no how are we going to listen to anybody” and they are just going to charge ahead. I’m not sure that they will be able to make that hold.

EPA believes it has the right to grant small refinery waivers without reallocating those gallons. It has already granted some 1.5 billion gallons worth of ethanol waivers. In this way, it is capable of creating rules that meet the legal requirements of the RFS, but then allow it not to be met via a loophole. Whether the loophole remains open is a political and legal question with big ramifications.

Irwin :40 …the EPA to roll back the mandates.

Quote Summary - That is an interesting question. If the zero reallocation holds, then this will be a major defeat for the ag interest and (R) IA - Senator Charles Grassley. This is because we will have gone to a situation where the small refinery exemptions function effectively as a form of general waiver authority for the EPA to roll back the mandates.

Clearly, Irwin goes on to say, Congress did not explicitly give that authority to the EPA. His view is that it will be challenged in court if necessary and thrown out.