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12/11/2013
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Fact Checking the Petroleum Refiners

The U.S. Senate is holding an oversight hearing today examining the Renewable Fuel Standard. The head of the American Fuel and Petrochemical Manufacturers (AFPM) is scheduled to testify before the Environment and Public Works Committee, and according to prepared remarks, will make an exaggerated claim that deserves further scrutiny.

Among a litany of grievances and complaints, AFPM president Charles Drevna includes the following statement: “The prevalence of imports and failure of the RFS to develop domestic second and third generation biofuels ensures that RFS will continue to rely on imported ethanol to satisfy its advanced biofuel volumes. This situation belies the argument that the law is enhancing energy independence.” (Emphasis added)

Well, as the old saying goes, everyone is entitled to their own opinion, but only one set of facts. A little fact checking finds Mr. Drevna’s assertion deficient on three counts.

1 – First, a little context. The U.S. Environmental Protection Agency has designated Brazilian sugarcane ethanol as an advanced renewable fuel after determining it reduces greenhouse gas emissions by over 60% compared to gasoline. And advanced biofuels are a category of fuel that Congress hopes to grow significantly during the next decade.

However, the fact is imports are not prevalent. Instead, sugarcane ethanol plays a modest but important role supplying the United States with advanced renewable fuel. Last year, Brazilian sugarcane ethanol comprised only 3% of all renewable fuel consumed by Americans, but provided nearly one-quarter of the U.S. supply of advanced biofuels. The final numbers for 2013 are still coming in, but the proportions should go down a little this year with sugarcane ethanol providing less than 3% of all U.S. renewable fuel and less than 20% of advanced biofuels consumed by Americans.

2 – Far from a failure, the RFS is helping the domestic market for American biofuels to grow rapidly. For evidence, let’s look at EPA’s forecast for 2013. The agency originally projected that the U.S. would need to import around 660 million gallons of Brazilian sugarcane ethanol to meet the 2013 advanced biofuel standard. However, total sugarcane ethanol imports will end this year at only 450-500 million gallons – not because Brazil has exhausted its capacity for exports – but because American production of advanced biofuels is expanding quicker than EPA predicted.

3 – Finally, EPA’s proposed formula for setting the 2014 advanced biofuel standard ignores – rather than relies on – Brazilian sugarcane ethanol. It’s a change we oppose, and one we hope EPA will correct following the public comment period. But for now, EPA has proposed a methodology that excludes any available volumes of advanced ethanol from the formula that sets the 2014 RFS targets for advanced biofuels.

The current debate over the renewable fuels standard is an important one with far-reaching implications for America’s energy security and environmental goals. Many different opinions are involved, but Brazilian sugarcane producers hope we can all agree to stick to the facts.

Leticia Phillips