EPA denies Renewable Fuels Standards 'point of obligation' petition

By Tyson Fisher, Land Line staff writer | Wednesday, November 29, 2017

The Environmental Protection Agency recently denied requests from petitioners to change the regulations identifying refiners and importers of gasoline and diesel fuel as the entities responsible for complying with the Renewable Fuel Standard program. This marks a win for coalition members, including the Owner-Operator Independent Drivers Association, who urged the EPA to keep the rules as they are.

The Renewable Fuel Standard requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels.

Also known as the “point of obligation,” a 2010 rulemaking put the burden of renewable fuel obligations on refineries, blenders and importers. In 2014, obligated parties and other stakeholders, including refinery and energy companies, questioned whether or not the definition identifying “obligated parties” should be amended and began submitting formal petitions.

Although all petitioners agreed that the point of obligation should shift from refiners and importers, solutions to where that burden should go differ. Some suggested shifting the obligation to blenders, whereas others felt distributors or fuel marketers should hold the burden. Petitioners argued that shifting the point of obligation, production, distribution and use of renewable fuels will increase while decreasing the cost of transportation fuel.

However, a coalition including OOIDA, truck stop trade group Natso, the American Highway Users Alliance, and the American Petroleum Institute urged EPA Administrator Scott Pruitt to deny the petition. The coalition argued that a change in the point of obligation would drive up retail fuel prices.

According to a Natso news release, the point of obligation as it stands allows the EPA to achieve its goal of displacing petroleum-based fuel with renewable substitutes. This displacement supports supply options for consumers and stabilizes prices. Changing the point of the obligation definition will discourage “fuel marketers from integrating renewable fuels into the fuel supply while simultaneously raising prices at the pump,” Natso argues.

“By reaffirming the current compliance structure under the RFS, EPA has taken a critical step in ensuring that fuel marketers continue to have a strong incentive to blend renewable fuels into the fuel supply and that consumers will pay the lowest possible price at the pump,” Natso Vice President of Government Affairs David Fialkov said in a statement.

In November 2016, EPA published a Proposed Denial of Petition. The action allowed stakeholders to comment on the possible denial of the petition. More than 18,000 comments were submitted to the docket.

On Nov. 22, the denial of the petition was made official.

“In our judgment, it does not appear that the record before the Agency indicates that a change in the point of obligation would result in net overall benefits to the program,” the EPA concluded. “In addition, however, we believe that changing the point of obligation at this time would be very disruptive to the program, and likely the fuels marketplace as well, undermining long settled expectations and the program stability and certainty that are critical to both short- and long-term success of the program.”

The EPA also believes that any change to the point of obligation will not result in an increase in use of renewable fuels.

 

 

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