FUELS
By Keith Reid
the Biodiesel Battle
A look at biodiesel on the legislative and regulatory fronts
A
s Fuel Oil News has regularly reported, renew-
able fuels have suffered some setbacks in 2014.
There are a number of reasons for this, many of
which focus more on ethanol as opposed to biod-
iesel/Bioheat
©
. That of course is no comfort for heating oil
dealers and marketers, as the impact is shared.
Biofuels and the Renewable Fuel Standards (RFS2, now)
generate strong politics on all sides. At the core are agribusi-
ness and the major oil companies, but with environmental-
ists and small government factions playing roles as well.
With Bioheat
©
you have the heating oil industry that consid-
ers this to be a critical product offering.
The two major setbacks for biodiesel/Bioheat® have
been the non-renewal of the biofuel tax credits—$1
per gal-
lon of biodiesel to the blender of credit—which expired on
December 31, and the likely downward adjustment of the
EPA's RFS Renewable Volume Obligations for 2014. The
impact of both the tax credit and RFS volume uncertainties
has been notable.
"Those two things together have really depressed the
market," said Ben Evans, National Biodiesel Board's direc-
tor of public affairs and federal communications. "We did
a survey recently and more than half of the U.S. biodiesel
producers, with 60 responses, have idled a plant this year.
78% say they had reduced production compared to last year.
A lot of producers are struggling to stay afloat and making
very tough decisions, such as do I operate a plant at loss in
the hopes that the tax incentive will return and RFS numbers
will improve? And idling a plant is no simple task. Once you
do that it is difficult to bring it back online."
While much attention has been focused on "big oil"
resisting biofuels (and there is no doubt that resistance
does exist), biofuels, and most specifically ethanol, have
also been experiencing push back from some highly influ-
ential but less traditional sources.
On the environmental front, corn ethanol production has
been criticized by such entities as the California Air Resources
Board as not being truly "low carbon." Additionally, and
perhaps more impactful, in recent years the "food to fuel"
debate has arisen with biofuels being blamed for higher food
16 JuLY 2014 | FuEL OIL NEWS | www.fueloilnews.com
The Imperium Grays Harbor biodiesel
refinery in Hoquiam, Wash. (Courtesy
of Imperium Renewables and NBB.)
