API threatens suit if U.S. biofuel mandate not done by November 30

Reuters

WASHINGTON (Reuters) - U.S. oil industry group the American Petroleum Institute told the federal environmental regulator on Thursday that it intends to file a lawsuit if the agency does not finalize 2014 biofuel requirements by the end of November. It was the oil industry's latest move to fight the so-called federal Renewable Fuel Standard (RFS), overseen by the Environmental Protection Agency. It requires fuel blenders to gradually mix more ethanol and biodiesel into the nation's gasoline and diesel supply. Refiners and fuel blenders complain that the requirements in the 2007 law assumed steady growth in gasoline demand and have not been adjusted to its stabilization in recent years. They have been forced to buy costly biofuel credits in order to meet the mandates. The EPA is required by federal law to finalize the 2014 mandate - specifying the amount of biofuels that must be blended into the fuel supply - by November 30. But the agency badly missed the 2013 deadline, which it did not finalize until August. "EPA's continual tardiness has real, adverse effects on industry," the API said in a letter to EPA Administrator Gina McCarthy. Reuters and other news outlets obtained a preliminary EPA proposal last week that indicated the agency would scale back corn-based ethanol blending requirements for 2014 to 13 billion gallons, about 6 percent less than this year and well short of the 14.4 billion gallons required under the original law. The EPA said no final decisions had been made on the 2014 mandate. The draft proposal was in documents dated August 26 and September 6. The White House Office of Management and Budget shows it received the 2014 volume standards on August 30. After OMB reviews the proposal it will be sent back to the EPA, which will release it for public comment and then finalize the rules. The process has been delayed by the more than two-week government shutdown. The EPA did not immediately comment on the letter the API sent on Thursday. The API and another oil industry group recently filed lawsuits in the U.S. District Court of Appeals for the District of Columbia challenging EPA's 2013 mandates. (Reporting by Timothy Gardner; Editing by Ros Krasny, Gary Hill and Leslie Gevirtz)