D.C. Circuit Court strikes down EPA biofuel mandate

As biofuels continue to encounter setbacks, oil and gas producers will remain under pressure to meet growing energy demand.

On January 25, a federal court ordered the U.S. Environmental Protection Agency (EPA) to redesign a regulation governing the amount of cellulosic biofuel that must be blended into traditional transportation fuels in coming years.

The challenge to the EPA’s rule was brought by an energy industry group called the American Petroleum Institute. API raised similar claims regarding another EPA rule in 2012, although its arguments were dismissed by a three-judge appellate panel.

What may have swayed the D.C. Circuit Court to rule against the EPA in this case is the staggering inaccuracy of the projections the agency used to design biofuel blending requirements.

The rule in question was adopted as part of the Renewable Fuel Standard, or RFS, program. It required refiners to blend 10.45 million gallons of ethanol equivalent into traditional fuels in 2012. However, domestic producers were able to put less than 22,000 gallons on the market.

Writing for the court, Judge Stephen Williams explained that Congress had ordered the EPA to make predictions about biofuels and promote their use. However, the agency conflated the two aspects of its role when estimating the rate of biofuel production. API argued the requirements would be “impossible” to meet.

“We agree with API that because EPA’s methodology for making cellulosic biofuel projection did not take neutral aim at accuracy, it was an unreasonable exercise of agency discretion,” wrote Williams.

Stagnation in biofuel development means that global demand for energy will continue to focus on fossil fuels for the foreseeable future. As producers seek to meet demand, ensuring they have high-quality oilfield equipment in place can help them certify that all of their oil and gas wells are achieving maximum output.

Installing an oil jet pump or other artificial lift equipment can be particularly useful for helping maintain high production levels at established wells.