Nearly two dozen representatives of the US biodiesel industry are slated to testify at an Environmental Protection Administration hearing December 5 about the threat to their businesses and surrounding communities under the EPA’s proposed Renewable Fuel Standard for biodiesel. They claim the EPA action would lead to significant plant shutdowns and employee layoffs.
Biodiesel--made from a diverse mix of resources such as recycled cooking oil, soybean oil and animal fats--is the first EPA-designated Advanced Biofuel to reach commercial-scale production nationwide. Yet in its recent RFS draft, the EPA proposed reducing biodiesel production to 1.28 billion gallons, down sharply from the industry’s production rate of about two billion gallons since July.
Tim Keaveney, vice-president for Erie PA-based biodiesel producer HERO BX, plans to tell the EPA that the company is producing a record amount of biodiesel this year, reducing the cost of production as a result and helping revitalize the local economy. But the proposed EPA rule threatens jobs at the plant and its surrounding area, and has already frozen a planned expansion that would add to the company’s current work force of 43 full-time employees.
“We have invested $120 million into our biodiesel refinery with a vision of supporting a green industry, fostering innovation, and creating meaningful jobs in Erie PA, one of America’s oldest manufacturing towns. The investment was made in part due to the government’s stance on establishing and supporting renewable fuels. To pull the rug out from under us now would foil current investment and likely stagnate future development in clean energy.”
Wayne Presby, head of White Mountain Biodiesel in North Haverhill NH, will tell the agency that the proposal threatens the survival of his company.
“We are one of the largest businesses in Northern New Hampshire and one of the few that has provided new employment over the past few years,” Presby says. “We currently employ 20 people and have grown at an annual rate of 300% per year for the last two years. We were intending to further increase our production this coming year and hire additional workers for a third shift, however, the current proposal by the EPA will halt our growth completely and may result in the closing of our business”
The National Biodiesel Board (NBB), the industry trade association, has warned that the EPA proposal will lead to layoffs and plant closures nationwide as biodiesel refiners sharply scale back production. The proposal also sends a devastating signal to investors that threatens future growth in the industry, while damaging prospects for other future alternatives to petroleum.
“This industry has been running at an annualized rate of about 2 billion gallons since July,” says Anne Steckel, NBB’s vice-president of federal affairs. “That’s displacing two billion gallons of petroleum diesel. You can’t cut it almost in half and expect jobs and businesses to survive.”
“What’s so frustrating about the proposal is that biodiesel is an EPA-designated Advanced Biofuel that has exceeded RFS targets. It’s an RFS success story that is creating the clean-energy jobs that the Obama Administration has pushed so hard for in recent years. There is not a commercial-scale fuel on the planet that beats the environmental benefits that biodiesel delivers. By the EPA’s own calculations, biodiesel reduces greenhouse gas emission by 57% to 86%. So we will be looking for answers from the EPA and the administration about why they are doing this. It is not consistent with the administration’s stated policy.”
The EPA’s draft proposal is particularly challenging for biodiesel because excess biodiesel production from this year’s record volume can be carried over and used for RFS compliance in 2014. As a result, the 1.28 billion gallon proposal could mean an effective market closer to one billion gallons. Additionally, it holds the biodiesel volume at 1.28 billion gallons for two years, in both 2014 and 2015, effectively freezing the industry.