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Oil and ethanol applaud EPA on point of obligation

Photo by Ben Nuelle

Ethanol groups and even an oil group are pleased the Environmental Protection Agency denied comments to move the point of obligation in the Renewable Fuels Standard.

The EPA officially denied petitions to move the point of obligation for the RFS Wednesday. If changes were to happen, the point of obligation of blending ethanol would move from refineries to becoming the responsibility of other businesses like shipping companies, railroads, and fuel marketers.

“We commend the EPA for maintaining the stability of the RFS by officially rejecting any change to the point of obligation. The RFS is working and obligated parties have had 10 years to acclimate their business models to the program,” Iowa Renewable Fuels Association Executive Director Monte Shaw says:

He adds changing the RFS point of obligation would have only served to reward those who haven’t lifted a finger to help the implementation of the RFS.

“Moving the RFS point of obligation to downstream marketers would place enormous burdens on station owners and consumers, so we are grateful EPA are rejecting pleas to change the rules for a handful of greedy refiners who want to escape their responsibilities under the law,” Chief Executive Officer (CEO) of the American Coalition for Ethanol (ACE) Brian Jennings says.

The American Petroleum Institute also welcomed the EPA’s decision to reject petitions to change the point of obligation.

“We applaud the administration for denying petitions to move the point of obligation for the RFS,” API Downstream Group Director Frank Macchiarola says. However, he would like to still see RFS reform.

“Now, we need to turn our attention to repealing and or significantly reforming the ethanol mandate which was instituted when America’s energy picture was very different,” Macchiarola says.

He argues consumers could be forced to pay more at the pump and at the repair shop because the majority of vehicles on the road today were not designed to use higher blends of ethanol in gasoline.

“We need to reform outdated energy policies to reflect the energy realities of today and tomorrow. We continue to urge Congress to pass legislation to fix the ethanol mandate so that the consumers are provided with real choice in the marketplace.”

API represents all facets of the oil and natural gas industry including more than 625 members include large integrated companies, as well as exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms.

The EPA is expected to release Renewable Volume Obligations in the RFS for ethanol and biodiesel by next Thursday.