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45 Envtl. L. Rep. News & Analysis 10674 (2015)
The Renewable Fuel Program at an Inflection Point: Policy Implications of EPA's Proposed 2014-2016 Renewable Fuel Standard

handle is hein.journals/elrna45 and id is 704 raw text is: ARTICLES The Renewable Fuel Program at an Inflection Point: Policy Implications of EPA's Proposed 2014-2016 Renewable Fuel Standard by Michael N. Romita Michael N. Romita is a Partner at Mercury Strategies, LLC. Summary In May 2015, EPA released its delayed revisions to the Renewable Fuel Standard (RFS) for 2014 and beyond. This standard establishes volumetric requirements for total renewable fuels and several subcategories of advanced biofuels. With the current rulemaking, EPA is attempting to revise its standard-setting pro- cess as the practical realities of the transportation fuel market have caught up with many of the program's more ambitious policy aspirations. Regardless of how the rulemaking plays out, policymakers will need to decide whether EPA is best positioned to take the lead in reinterpreting those aspirations, or whether Con- gress should step back in. I. Introduction Ten years ago, the U.S. Congress launched an ambitious effort to transform the way we think about transporta- tion fuel. The 2005 Amendments to the Clean Air Act (CAA), passed as part of the Energy Policy Act (EPAct) of 2005,1 created the Renewable Fuel Program and rein- vented the domestic market for transportation fuel: how it is composed, supplied, traded, and consumed. The goals were transcendent. By requiring the United States to dis- place traditional fossil fuels with continuously expanding amounts of renewable fuels to power cars, trucks, and other vehicles, the Renewable Fuel Program would create a market for the domestic production of these fuels, bolster rural economies, fight climate change, and put the country on a sustainable path toward energy independence. Congress tasked the U.S. Environmental Protection Agency (EPA) with setting up the rules and administering the program, and EPA has made substantial progress on many of these original policy goals. Over the past 10 years, renewable fuel production under the program has tripled and now represents close to 10% of the national transpor- tation fuel market.2 These fuels are now an integral part of the domestic energy slate. Notwithstanding this progress, the past decade has wit- nessed a dramatic shift in the domestic energy economy. Many of the economic assumptions and energy forecasts that underpin the program's policy goals have turned out to be inaccurate. As a result, EPA now finds itself strug- gling to keep pace with its statutory responsibility to ensure that the country continues to consume increasing amounts of renewable transportation fuel every year, irrespective of market forces. The Renewable Fuel Program has reached a turning point. EPA is currently in the midst of a rulemaking to pro- mulgate a fresh set of renewable fuel standards under the program for the years 2014 and beyond. EPA therein attempts to revise its standard-setting process and place it on a path more adaptable to shifting market conditions. The rulemaking serves to answer those who advocate reforming or repealing the entire program. However, it is unclear whether the Agency's recalibrated approach will Author's Note: The author was formerly Executive Vice President of Castle Oil Corporation and earlier served as a Trial Attorney in the Environmental Enforcement Section of the U.S. Department ofJustice. 1. Energy Policy Act of 2005 (EPAct), Pub. L. No. 109-58, §1501, 119 Stat. 594 (2005). The Renewable Fuel Program is codified at 42 U.S.C. §7545(o), as amended. The Clean Air Act (CAA) is codified at 42 U.S.C. §§7401-7671q, ELR STAT. CAA §§101-618. 2. EPA reports an increase in production of renewable fuels for program com- pliance from 5.2 billion gallons in 2006 to almost 16 billion gallons in 2014. Compare RFS1 Final Rule, infra note 3, at 23951, with Updated Pro- posed RFS 2014 Standard, infra note 59, at 15. ENVIRONMENTAL LAW REPORTER 45 ELR 10674 7-2015

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