Bloomberg News

Energy Trade Group Challenges EPA Biological Additive Rule

March 12, 2012

An oil and gas industry trade association asked a federal appeals court to review a U.S. Environmental Protection Agency regulation governing fuel additives including biological materials.

The group, the American Petroleum Institute, is seeking to overturn an EPA standard mandating the purchase of fuels formulated in part from biological materials including switchgrass, wood chips and agricultural waste.

The rule “forces refiners to purchase credits for cellulosic fuels that do not exist,” the association Director of Downstream and Industry Operations Bob Greco said today in a statement. The rule “is effectively a tax on manufacturers of gasoline that could ultimately burden consumers.”

First passed in 2007, the regulation required refiners to buy 250 million gallons of biofuel annually. Production failed to reach that level and the agency reduced the target to 6.6 million for 2011, and 8.65 million for this year.

The Biotechnology Industry Organization backed the measure in a letter to EPA Administrator Lisa Jackson last month, stating the renewable-fuel standard was first developed in 2005 during the administration of President George W. Bush to drive the continued development of the nation’s biofuels industry.

The standard “provides industry and investors with the confidence of knowing that if they can produce advanced and cellulosic biofuels, the RFS will ensure market access,” James Greenwood, president of the Washington-based group, told Jackson.

Wyn Hornbuckle, a spokesman for the U.S. Justice Department, declined to comment on the legal challenge. The petition was filed March 9 with the Washington-based U.S. Court of Appeals.

The case is American Petroleum Institute v. U.S. Environmental Protection Agency, 12-1139, U.S. Circuit Court for the District of Columbia Circuit (Washington).

To contact the reporters on this story: Andrew Harris in Chicago federal court at aharris16@bloomberg.net; Mark Drajem in Washington at mdrajem@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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