Archive for July, 2008
EPA Will Take More Time To Respond to RFS Waiver Request
EPA Will Take More Time To Respond to RFS Waiver Request
Author: Clayton McMartin
EPA Administrator Stephen Johnson issued a press release today addressing the long awaited decision to Governor Rick Perry’s RFS waiver request filed 88 days ago. And the answer is, we need more time.
“Additional time is needed to allow staff to adequately respond to the public comments and develop a decision document that explains the technical, economic and legal rationale of our decision,” the EPA said in a news release on Tuesday July 22, 2008.
According to testimony given by Principal Deputy Assistant Robert Meyers during the July 10, 2008 Senate Environment and Public Works hearing on implementation of the Renewable Fuel Standard, over 15,000 comments had been received by EPA on the waiver request.
The administrator’s comments would indicate that EPA has yet to make a final decision on the matter, assuring the public through the press release that, “The process remains fair and open, and no agreements have been made with any party in regard to the substance and timing of the decision on the waiver request.”
According to Administrator Johnson, a final decision on the Texas Governor’s petition is expected in August. No additional details were available.
Whatever the final decision, the impact to the renewable fuel supply chain will be significant. Texas Governor Rick Perry will open the RINWorld Summit in Dallas Texas on October 16, where industry leaders and government official will convene to discuss and learn more about the cost effective implementation of the RFS.
Tags: Biodiesel, Biomass, Clayton, Compliance Report, Diesel, EPA, Ethanol, Fuel, Gasoline, Government, Governor, McMartin, Policy Act, Refueling America, Regulations, Renewable Fuel Credits, Renewable Fuel Registry, Renewable Fuel Standard, Renewable Identification Number, Response, RFS, Rick Perry, RIN, RINSTAR, waiver
Already on the Books
EPA’s Answer to Governor Perry’s RFS Waiver Request Already on the Books
Author: Clayton McMartin
[audio:http://cleanfuelsclearinghouse.com/wp-content/uploads/version-2-waiver-answer-on-the-books.mp3]
As surely everyone in the renewable fuels area has heard, Texas Governor Rick Perry petitioned EPA for a partial waiver of the RFS on April 25, 2008.
http://www.epa.gov/otaq/renewablefuels/rfs-texas-letter.pdf
What virtually no one seems to realize is that the answer to the Governor’s request has already been addressed in the existing regulations.
The answer, in the form of legal jargon and published in the federal register on May 1, 2007, can be found in the provision for “deficit carryovers” of renewable fuel credits known as RINs. The exact language can be found in the federal register, 40 CFR Section 80.1127(b), deficit carryovers. For those so inclined, the final rule is available at http://www.epa.gov/otaq/renewablefuels/rfs-finalrule.pdf
More in layman’s terms, the Act anticipated the situation and EPA actually addressed the matter in the preamble to the regulations (Federal Register page 23934) with the following:
“The Act clearly set up a credit program with a credit life, meaning Congress intended parties to use credits in some cases instead of blending renewable fuel. The Act is best read to harmonize all of its provisions. In addition, we note that other provisions of the Act may lead to less renewable fuel use in a given year than the statutorily-prescribed volumes, but Congress adopted them and intended that they could be used. For instance, the deficit carryover provision allows any obligated party to fail to meet its RVO in one year if it meets the deficit and its RVO in the next year. If several obligated parties took advantage of this provision, it could result in the nationwide total volume obligation for a particular calendar year not being met.”
There are essentially no limits to the deficit carryover provision, other than it can not have been invoked during the prior year and if invoked in 2008 can not be used again by the obligated party in 2009. If anyone used the provision in 2007 it would be a very rare, therefore it is essentially available to all obligated parties now.
This foresight, on the part of the original lawmakers, addresses both the Texas Governor’s petition as well as the uncertainty brought about by the flooding in the corn-belt areas of Iowa.
For those who are looking for EPA’s most likely response to any waiver request, consider Clayton McMartin officially on the record now. The answer will be “this issue was anticipated in the original Act and is to be addressed with the use of RINs.” Of course nothing is black and white when it comes to politics, so we will all have to wait to hear EPA’s official response later this month.
Now for some related news. Governor Perry is scheduled to open the inaugural RINWorld Summitwww.RINsummit.com in Dallas Texas on October 16, 2008. Industry leaders will convene to learn more about the emerging markets for renewable fuels, cost effective implementation of the RFS, and the future of renewable fuels in America.
Tags: Biofuel, Biomass, Cellulosic, Clayton, Clayton McMartin, Clean Fuels Clearinghouse, Compliance, Environmental, EPA, Ethanol, Fuel, Gasoline, Governor Perry, McMartin, Perry Waiver, Regulations, Renewable Fuel Standard, Renewable Identification Number, RFS, Rick Perry, RIN, Waiver Request
Renewable Fuel Standard to be Delayed According to EPA
Renewable Fuel Standard to be Delayed According to EPA
[audio:http://cleanfuelsclearinghouse.com/wp-content/uploads/epw-testimony.mp3|titles=EPW Testimony|artists=Clayton McMartin]
Testimony from EPA Principal Deputy Assistant Administrator Robert Meyers is the first official indication that the Renewable Fuel Standard will be delayed.This development was revealed during a Senate Committee on Energy and Public Works hearing, held on July 10, 2008.
According to Mr. Meyers, “it would be difficult to meet the statutory deadline by the end of the year”. When pressed for a completion date by Majority Leader Senator Barbara Boxer, Mr. Meyers responded “according to our projections we believe we can go final next year, somewhere in the middle of the year” Presumably, we can expect to see the final rule in the June timeframe of 2009. Mr. Meyers did indicate that the notice of proposed rule making (NPRM) will be out this fall.
Delaying the final rule will have an affect on participants throughout the renewable fuel supply chain, especially in the area of advanced biofuels, such as the emerging area of cellulosic fuels, and on obligated parties such as refiners. With new mandates set to come online Jan 1, 2009, EPA will need to provide interim direction on how the RFS is to be administered in this time of transition. Look to the Clean Fuels Clearinghouse as new developments form in this area.
Tags: Biofuel, Biomass, Cellulosic, Clayton, Clayton McMartin, Clean Fuels Clearinghouse, Compliance, Environmental, EPA, Ethanol, Fuel, Gasoline, McMartin, Regulations, Renewable Fuel Standard, Renewable Identification Number, RFS, RIN
EPA Warns Companies to Trade RINs Properly
EPA Warns Companies to Trade RINs Properly
By: Kris Bevill
From the July 2008 Ethanol Producer Magazine
Established by the U.S. EPA as a way to track the amount of renewable fuel produced in the United States, renewable identification numbers (RINs) have only been around since September 2007 and regulations for them are often overlooked or disregarded.
As a result, the EPA recently reissued a document warning companies about improper and illegal RIN trading practices. No changes have been made to the regulations. The document merely serves as a stern reminder from the EPA for companies to comply – or face fines. Violators of RIN regulations can be punished with fines established under the Clean Air Act that can be up to $32,500 per day.
The EPA document covers three commonly occurring RIN transactions that defy regulations. The first is a situation in which an error during the sale was made, either a billing or volume error, and the seller “re-bills” RINs that have already been transferred. For producers, this is illegal because renewable fuel must be transferred with the correct number of RINs attached. Also, the ownership of RINs is transferred along with the fuel, so those RINs automatically become owned by the receiving company and cannot be simply transferred back to the seller. Read the rest of this entry »
Tags: bevill, Biofuel, Biomass, Cellulosic, Clayton, Clayton McMartin, Clean Fuels Clearinghouse, Compliance, Environmental, EPA, Ethanol, Ethanol-Producer Magazine, Fuel, Gasoline, kris, Kris Bevill, McMartin, press, Regulations, Renewable Fuel Standard, Renewable Identification Number, RFS, RIN
Survey Reveals Challenges with RFS Compliance
Survey Indicates that 81% of Renewable Fuel Suppliers are Out of Compliance
Author: Clayton McMartin
EPA issued a guidance document pertaining to Improper and Illegal RIN Trading Practices on June 26, 2008. In this document they addressed 3 different situations pertaining to improper and illegal RIN trading practices. I would like to take a few minutes and provide you with some specific insight into Situation No. 3. In particular let’s spend a few minutes investigating the issue of transmitting ownership of assigned RINs on the same day as the transfer of title to the renewable fuel product.
To give you an idea of how widespread this problem is, consider the following graph:
The guidance document states that:
The regulations also require that assigned RINs must be recorded on the PTD used to transfer ownership of the fuel or on a separate document that is transferred to the same party on the same day as the PTD used to transfer ownership of the fuel. The regulations are clear with regard to this issue. See §80.1128(a)(7); Q&As 9.7 and 9.12.
The data comprising the pie graph was collected during one of our RINSTAR sponsored Web Seminars on January 17, 2008. 134 individual companies were in attendance and participated in the anonymous polling to this question - “What Percentage of RIN Transfers do you Receive on the Same Day as Your PTD?”. Only 19% indicated that they received data in a timely manner.
What is even more enlightening is the fact that the very same question was asked of essentially the same group of participants during our October 2007 Webinar, with those results showing that 39% of participants were receiving their data in a timely manner. That is a relative drop of 50%, which is exactly contrary to what one would hope for. It would seem that with benefit of experience this practice would have improved with time, instead it appears to have worsened.
Apparently EPA sees this as a big enough issue now to step in and render an official opinion through the guidance documents. This is certainly a step in the right direction when it comes to improving efficiencies throughout the supply chain. Now the big question - Are fines in the near future?
What are your thoughts? Do you think EPA will start issuing fines? How will this impact your business?
Tags: Biodiesel, Biomass, Clayton, Compliance Report, Diesel, EPA, Ethanol, Fuel, Gasoline, McMartin, Policy Act, Refueling America, Regulations, Renewable Fuel Credits, Renewable Fuel Registry, Renewable Fuel Standard, Renewable Identification Number, RFS, RIN, RINSTAR