A leaked draft document indicates the Environmental Protection Agency is looking to cut the renewable fuels standards mandate for 2014 and 2015 by 6% from current levels, which would indicate a significant cutback in ethanol's corn demand.
As hinted in their rulemaking earlier this fall EPA said it would be using its authority to make adjustments to the mandate. The 2007 law mandated 18.15 billion gallons of total renewable fuel use, but the leaked document indicated the agency would be dialing that back to just 15.21 billion gallons.
This would reduce the volume of corn-based ethanol to about 800 million gallons less than this year's 13.8 billion gallons. The "blend wall" is considered to be roughly 13.3 billion gallons. The law had required 14.4 billion gallons in 2014.
Friday afternoon a statement from EPA administrator Gina McCarthy said the Obama Administration remains firmly committed to furthering the development of all biofuels.
"At this point, EPA is only developing a draft proposal. The agency has made no final decision on the proposed renewable fuel standards for 2014," McCarthy said.
The statement went on to state that "no decisions will be made on the final standards without a full opportunity for all stakeholders to comment on the EPA’s proposed 2014 renewable fuel standards and be heard on how to best foster a growing biofuels industry that takes into account infrastructure- and market-related factors."
The draft documents indicate that in order to make the changes, EPA would intend to use the inadequate supply justification for the waiver. Bob Dinneen, president of the Renewable Fuels Assn., offered a lengthy explanation of the terms to which EPA can use this authority, and questioned whether EPA does.
The proposal is supposedly under review by the White House's Office of Management and Budget. However, with the government shutdown nothing official will be released until work resumes.
In past years though the initial proposed levels have not been changed once released.