As Deadline Nears, Shell Urges White House to Delay Biofuels Mandate One Year

As Deadline Nears, Shell Urges White House to Delay Biofuels Mandate One Year

By Scott Doggett November 23, 2009

Shell Oil company representatives are pressing the White House for a one-year delay in implementing a controversial regulation that would expand America's biofuels mandate beginning in January.

Two Shell employees met with administration officials earlier this month to express concerns with U.S. EPA's proposed renewable-fuels standard, according to White House meeting records. Five White House Office of Management and Budget officials and one EPA official attended.

In documents submitted at the meeting, Shell executives said the rule's implementation should be pushed back at least until January 2011 to give renewable-fuels companies and petroleum refiners, blenders and importers time to comply, since the rule has not yet been finished.

The EPA regulation dramatically enlarges the existing renewable-fuels program to 36 billion gallons by 2022 compared with 9 billion gallons in 2008. The 2007 energy law authorizing the regulation also created explicit mandates for emerging cellulosic ethanol and advanced biofuel technologies and specified greenhouse gas reduction criteria for fuels to qualify.

The continuing controversy over EPA's calculation of the greenhouse-gas emissions reductions may have slowed progress in completing the rule. Environmental groups and the biofuels industry are in a tug of war - with EPA in the middle - on the inclusion of indirect international emissions caused when U.S. farmers produce fuel instead of food.

What Is Ethanol's Carbon Footprint?

The industry argues it is being unfairly penalized and the science is not yet there, while environmentalists say it is irresponsible to ignore a portion of the total carbon footprint of biofuels.

EPA completed a scientific peer review of the calculations this past summer. Later, EPA Administrator Lisa Jackson pledged that the final rule would reflect the scientific uncertainty.

The agency has set itself a Nov. 30, 2009, deadline to finalize compliance procedures for next year, according to the draft rule. In 2010, regulated companies would have to each account for specific percentages of the total 13 billion gallons of renewable fuels mandated next year.

Margo Oge, head of EPA's Office of Transportation and Air Quality, said at a public hearing that EPA wanted to complete the rule in the fall, in time for the 2010 requirements. But the agency will consider delaying the start date until mid-2010 or 2011, she said.

In its proposal, EPA also declined to waive next year's 100-million-gallon requirement for cellulosic ethanol, though the agency said it was also still considering the issue.

Industry Says Cellulosic Mandate Is Impossible

With no commercial-scale cellulosic plants up and running today and planned plants struggling to obtain financing, the industry says the 100-million-gallon requirement will be impossible to meet. At best, maybe a tenth of that might be produced next year, and subsequent years may also have shortfalls, the industry predicts.

Shell, in the meeting documents, also argued that petroleum refiners and importers should not be obligated to comply. Instead, EPA should shift all of the obligations to the blenders that actually control the fuel supply mix, the company said.

Shell also is advocating that EPA simplify overly burdensome requirements that renewable fuels be sourced from "renewable biomass." EPA should recognize third-party certification standards, such as those of the Round Table on Responsible Soy, Shell wrote in its comments.

Scott Doggett:  is an AutoObserver.com Associate Editor.