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Ethanol vs oil companies: interesting news report on lawsuit

http://www.ethanolproducer.com/articles/11578/crew-sues-epa-for-release-of-rfs-related-documents

CREW sues EPA for release of RFS-related documents
By Erin Voegele | October 22, 2014

Citizens for Responsibility and Ethics in Washington, a nonprofit legal watchdog group, has announced it is suing the U.S. EPA for failing to release documents related to oil industry efforts to influence the renewable fuel standard (RFS). The move follows CREW’s May 2014 request that EPA Inspector General Arthur Elkins investigate whether the Carlyle Group and Delta Airlines improperly influenced the EPA’s 2014 RFS proposal, which cited the E10 blend wall a factor contributing to the decision to set proposed 2014 volume obligations at levels well below statutory requirements.

According to information released by CREW, its request for an investigation by the inspector general followed a Reuters article that was published in May. That article described how the Carlyle Group and Delta Airlines had lobbied members of Congress and the administration to reduce the 2014 RFS volume obligations. In addition to requesting the investigation, CREW also filed a request for records under the Freedom of Information Act. According to CREW, it took months for the EPA to release the documents it had provided to Reuters. CREW has also indicated the EPA has not yet handed over all relevant documents.

In addition, CREW said it has concerns that oil companies leveraged high-level political connections to convince the White House and the EPA to insert special waivers into the RFS that could potentially allow oil companies to refuse to sell biofuels.

“It certainly seems as if the administration has backtracked on its commitment to renewable fuels. The question is why. Was there a back room deal orchestrated by big oil and high ranking officials in the Obama administration?” asked CREW Executive Director Melanie Sloan. “Even though it is nearly 2015, the renewable fuel standards for 2014 still haven’t been released. Is this to avoid potential political fallout in the mid-terms for siding with the oil industry over the biofuel industry?”

Within its statement announcing the lawsuit, CREW references a letter Sens. Ed Markey, D-Mass., and Barbara Boxer, D-Calif., sent the White House earlier this month expressing concern over the EPA’s 2014 RFS proposal. That letter stresses that the EPA’s proposal relies on a “questionable reading of the statute that would allow the oil industry to escape its obligations under the RFS by simply blocking or limiting the distribution of renewable fuel blends to consumers.” Rather that fostering competition and innovation in the transportation fuel market, the letter said the 2014 RFS rule would give power to the oil industry to impede the development of its competition. “Should this proposal be adopted, our consumption of oil would rise, yielding an immediate increase in carbon pollution in 2014 and beyond,” wrote Markey and Boxer.

According to data cited in the letter, the proposed rule could increase net carbon pollution by 28.2 million metric tons this year alone, when compared to the savings that would be achieved if the EPA had used the same methodology it has used in previous years to set the volume obligations. If the new approach is carried forward, the letter states that by 2022 the U.S. could miss out on nearly 1 billion metric tons of cumulative carbon pollution reductions.

In addition to increasing carbon emissions, Markey and Boxer stressed that the proposed rule would derail “efforts to attract investment to critical U.S. innovation markets and drive the development of fuels that further reduce carbon pollution in the long-term.”

“We are aware of concerns about the potential market and policy implications of aggressive RFS targets, said the senators in the letter. “But the country cannot afford to address these challenges by imposing unreasonable cuts to the program and adopting a new administrative approach that would send investment overseas by providing loopholes for oil companies to escape obligations under the Clean Air Act.”

In its announcement, CREW noted that both Carlyle and Delta lobbied heavily for lower volume obligations and the use of the new methodology and would benefit financially from these changes. As revealed by Reuters, CREW said the two companies persuaded Reps. Robert Brady, D-Pa., and Patrick Meehan, R-Pa., to lobby administration officials, including Vice President Joe Biden, White House Chief of Staff Denis McDonough, National Economic Council Director Ronald Minsk, and former National Economic Council Director Gene Sperling to weaken the RFS.

“Is the EPA slow-walking its release of these documents because it does not want the public to learn how political the RFS has become? The RFS should be based on sound energy policy, not politics. CREW’s lawsuit will shed light on what really went on at the EPA,” Sloan said.

CREW filed its lawsuit on Oct. 22 with the U.S. District Court for the District of Columbia. According to a copy of the filing, on May 28 CREW sent a FOIA request to the EPA requesting all records from Jan. 1, 2013 through the present related to the EPA’s proposal to decrease the amount of renewable fuel required to blend into transportation fuel supplies in the 2014 RFS. The request included external and intra-agency communications, in addition to correspondence, memoranda, email and phone records with all federal agencies, White House individuals or officers, any congressional offices and any employees, representative and/or lobbyists of Carlyle and Delta. CREW also requested the EPA expedite its request. On June 13, the EPA denied CREW’s request for expedition. CREW later agreed to narrow the scope of its request to include all documents EPA provided to Reuters in response to its FOIA request, covering 2013, and communications between EPA and other government entities, and documents responsive to both the Reuters and CREW FOIA requests for 2014. According to CREW, EPA made a first release of documents on Sept. 26. That release covered only 2013 and included documents EPA produced in response to Reuters FOIA and congressional correspondence. In its filing, CREW said that the EPA noted it would “continue to work” on it, but indicated no date for completion. According to CREW, EPA has also failed to advise the group on what additional documents it plans to release and which it plans to withhold and why. The lawsuit filing explains that the FOIA requires agencies to make that determination within 20 days of receiving a non-expedited FOIA request.

The EPA published its proposed rule for the 2014 RFS in mid-November. The comment period on the rulemaking closed on Jan. 28. On Aug. 22 the EPA delivered the final rule to the White House of Office and Budget for review. That review process is currently ongoing. The EPA’s Regulatory Development and Retrospective Review Tracker currently indicates the final rule is expected to be published in the Federal Register in October. However, as cited by CREW in its lawsuit, many in the industry are speculating that the final rule won’t be released until after the Nov. 4 mid-term elections. The EPA’s review tracker also indicates the agency began work on the 2015 RFS proposal in June. According to EPA documentation, the notice of proposed rulemaking for the 2015 RFS rule is currently expected to be released in February