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Once Again, the EPA Is Late On Fuel Standards

2:15 PM, Aug 22, 2014 • By DAVE JUDAY
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The dictionary defines a deadline as “the latest time or date by which something should be completed.” The U.S. Environmental Protection Agency obviously defines it another way, at least when it comes to renewable fuels.

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On August 22, 2014, the EPA sent its proposed rule setting the 2014 volumes for the amount of renewable fuels (i.e. ethanol and biodiesel) to be blended into the nation’s fuel supply to the Office of Management and Budget’s Office of Intergovernmental and Regulatory Affairs for a final interagency review. OIRA has between 30 and 90 days to review that rule before it is published in the Federal Register and made final and binding.

The deadline for this rule, however, as set in statute, was November 30, 2013—nearly nine full months ago. If OIRA takes the full 90 days allotted it under the Administrative Procedures Act, which governs the federal regulatory process, this regulation will be almost a year past its deadline. For reference, OIRA took 73 days to sign off on the original draft of the rule last fall.

At this point it is guaranteed that the 2014 standard will be later than the 2013 renewable fuels standard which was finalized on August 6, 2013—eight months past the deadline. According to the Government Accountability Office, EPA hasn’t set the renewable fuels mandate on time since 2009, but the problem is seemingly getting worse. 

Indeed, the Government Accountability Office issued a report finding that these missed deadlines impact the energy industry because they “contribute to industry uncertainty, which can increase costs because industry cannot plan and budget effectively. The same goes for the livestock and food manufacturing industries that compete with renewable fuel producers in the market for corn and soybean products, not to mention average consumers who spend a significant portion of their household income on food and energy. 

So far this year, the EPA has extended the compliance period for petroleum companies to meet the 2013 volumes three times. The latest extension sets the dates to submit annual compliance reports and attested reports for 2013 at 30 days and 90 days, respectively, following publication of the 2014 final volumes in the Federal Register. If OMB takes its full time of 90 days to review the current regulations, the agency will be wrapping up the 2013 compliance year in 180 days, or February of 2015. And the EPA hasn’t even started the process of setting the 2015 levels.

Surely Congress, who set these deadlines, can see that this process is broken and that the EPA needs to be held accountable.

Dave Juday is an agricultural commodity market analyst.

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