Environmental groups take issue with RFS2

By Holly Jessen | July 15, 2010
Clean Air Task Force and Friends of the Earth, two non-profit environmental groups, are suing the U.S. EPA over the renewable fuels standard (RFS2). Individuals close to the ethanol industry have said that not only do the arguments not make sense, but the lawsuits will likely have a hard time finding a sympathetic ear in the courts.

Together, the Clean Air Task Force and Friends of the Earth filed a lawsuit against the EPA's RFS2 in the U.S. Court of Appeals and petitioned the EPA to reconsider its findings on land conversion. The groups claim the EPA used outdated data and failed to account for a 2009 USDA study that concluded that total agricultural area will increase as a result of the RFS2.

Separately, Clean Air Task Force also filed a legal challenge to the EPA's rule and petitioned it to reconsider two elements. First, that the EPA reconsider and account for the "global rebound effect," which the group described as displacing gasoline with biofuels, which lowers petroleum demand, followed by lowered prices, which then leads to both increased consumption of oil and higher greenhouse gas (GHG) emissions. Secondly, the group petitioned that the EPA reconsider its findings that RFS2 will not cause any natural ecosystems to be converted into farmland.

Overall, both groups take issue with the fact that the EPA determined that all types of biofuels—even corn ethanol—achieve emissions reduction requirements set by Congress.

Groups such as the Clean Air Task Force and the Friends of the Earth are likely going to have a tough time convincing the courts to side against the EPA, according to Graham Noyes, an attorney for Stoel Rives LLP, who focuses on representing biofuels companies. The allegations drive at the agency's methodology for assessing GHG—and it's really the first time a U.S. agency has tried to do that in this kind of comprehensive manner. "This was obviously a very controversial issue during the rulemaking, it's technically very complicated," he told EPM. "I think, so long as the EPA is making good faith efforts to uphold the statutes, it's going to be upheld."

It's up to the petitioner, Noyes said, to prove their claims. That's going to be difficult, considering all the work the EPA put into the RFS2. In addition, the agency is venturing into new territory where there isn't any firm answer on what is correct. To some degree, Noyes pointed out, the lawsuits seem to blame the EPA for a policy decision made in the 2007 Energy Independence and Security Act. One remarkable part about Clean Air Task Force's petition is the so-called global rebound effect. "Essentially, that argument assigns a penalty for reducing the use of fossil fuel," he said. "It's somewhat difficult to see how the U.S. can do anything to reduce GHG emissions, if it penalizes itself when it is successful."

Also baffled by this argument is the Renewable Fuels Association. "To blame American biofuels for increasing global oil use defies simple common sense," said RFA President and CEO Bob Dinneen. "By this tortured logic, any effort that environmental activists support to reduce America's reliance on oil would be responsible for lowering U.S. oil demand, reducing global oil prices, and inciting increased consumption somewhere else in the world. Increasing mileage standards, deploying electric vehicles, and any other measure designed to reduce U.S. oil demand would be penalized with carbon emissions from increased global oil consumption under this rubric. It simply doesn't pass the sniff test."

Tom Buis, CEO of Growth Energy, agreed. "In their argument, they say that anything that decreases the use of oil in the United States is bad because it'll make oil cheaper and lead to increased oil use in developing countries," he said. "By their logic, that means one of the largest contributors to carbon emissions is our own national CAFE (corporate average fuel economy) standards—because by making vehicles more fuel efficient, we're reducing demand for oil in the U.S., lowering prices and driving up the use of oil in other places around the globe."

As for the claims that RFS2 doesn't protect additional land from being converted into agricultural production, Dinneen said that's also false. The EPA has capped the amount of land that can be used for crop production at the acreage levels from 2007. If that amount is exceeded, new rules go into effect and biofuels producers must prove the feedstock used doesn't come from newly converted land or the fuel produced doesn't qualify under RFS2.

"We agree that there are fundamental flaws with EPA's RFS2 rulemaking, but it certainly isn't that it didn't go far enough," Dinneen said. "Still, EPA's insistence on penalizing ethanol and other biofuels for prescriptive and theoretical land-use decisions made around the world was not enough to erase the significant carbon benefits gained by using domestically produced renewable fuels."