The Biotechnology Industry Organization (BIO) just released a new analysis (a pdf file) that squarely sets the delays in advanced and cellulosic biofuels development on the U.S. Environmental Protection Agency (EPA). The EPA’s delays of the annual rulemaking for the Renewable Fuel Standard (RFS) during the past two years has stalled the necessary investment in advanced and cellulosic biofuels just as they reached commercial potential and scale.

The 4 1/2 page report summary concisely lays out and identifies the situation and estimates the industry, employment and consumers losses.

The EPA issued the rules on time in both 2011 and 2012. The agency was nine months late issuing the 2013 rules and is more than 17 months late in issuing the 2014 rule with this year, 2015 perhaps getting done in 2016. What a way to administrate an energy policy.

BIO offers that the shortfall in cumulative industry investment for 2011 and 2012 of $6.9 billion should be attributed solely to the recession and to challenges in commercializing new technology. The estimate for investment losses over 2013 and 2014 grew dramatically to an estimated $13.7 billion shortfall in investment.

The average time that companies filing new biofuel production pathway petitions under CFR §80.1416 have waited for approval from EPA has grown from months to years.

Currently, 29 companies have unresolved petitions filed with the EPA and they have been waiting on average more than 32 months for resolution. At least two companies abandoned plans for cellulosic biorefineries while waiting for EPA approval of pathways.

BIO estimates that the EPA’s delays in rulemaking has undercut the industry’s ability to create jobs by more than 80,000 direct jobs in operations and construction, and an additional 228,000 indirect jobs within the rural economy.

“It is well worth noting that more than $600 million dollars has been invested overseas in biorefineries that commercialized new technologies researched and developed here in the United States. Additional commercial biorefineries originally planned for the United States are now looking for locations overseas or have simply been put on hold indefinitely. With commercialization of cellulosic and advanced technologies, companies will continue to seek economic opportunities to deploy them. With policy instability in the United States, those companies are likely to continue deployment in other countries.”

Of course BIO has a bias. The estimates may well be less than accurate but estimates aren’t accurate anyway. But the EPA is clearly standing in the way for reasons that have little if anything to do with the industry, consumers, the economy or the competition.

Meanwhile. Crude oil prices have collapsed, taking gasoline down too. Farm prices have collapsed, too, helping both food and fuel prices. Both the oil and gas industry and farmers have produced themselves into low prices. Both are hearing talk of business closures, mergers, and bankruptcies.

Consumers are enjoying a period at the bottom of the price cycle. It won’t last anymore than the high prices did a few years ago. The cycle isn’t over either. The next phase is an increase in prices with peak prices sure to go over those set during the last peak.

The EPA could have done the work mandated by law. Somehow, the government’s bureaucracy again is breaking the law and getting away with it, not even really being called on it. Just remember when that price peak comes about 30 alternative renewable fuel plants aren’t going to be in production – and then consumers are going to pay extra for the bureaucratic laziness.


1 Comment so far

  1. MattMusson on May 6, 2015 7:41 AM

    We are from the government and we are here to help you.


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