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New Standards for Renewable Fuels Announced

posted on April 13, 2007


The government predicted this week, motorists will pay less for gasoline this summer compared to last, despite a dramatic spike in prices thus far in 2007.

According to an Energy Department report, retail gasoline prices have risen 64 cents per gallon since January.

The national average price of unleaded gasoline exceeded $2.80 per gallon this week, marking the 10th consecutive weekly increase. Nevertheless, the government expects prices to average $2.81 per gallon this summer -- about 3 cents lower than last year.

The report noted domestic ethanol production is expected to average 399,000 barrels per day this summer -- an increase of nearly 28 percent from last year that, no doubt, will help the industry meet newly established renewable fuels standards.

New Standards for Renewable Fuels Announced

Following a mandate by Congress in the Energy Policy Act of 2005, the Environmental Protection Agency this week announced new standards for renewable fuels for cars and trucks.

Under the plan for this year (2007), EPA will require just over 4 percent of gasoline – or 4.7 billion gallons -- sold or dispensed in the U.S. be renewable fuel such as ethanol or biodiesel. This is 1 percent more than required last year.

Steve Johnson, EPA Administrator: "Under the program, the annual amount of required renewable fuel use increases each year. The program we are finalizing today builds on our clean air progress by cutting petroleum use by nearly 4 billion gallons by the year 2012. What does this mean for our environment? It means the increased use of renewable fuels under RFS will prevent the release of greenhouse gas emissions equivalent of up to 13 million metric tons –that's equal to the carbon dioxide emissions of nearly 2.3 million automobiles."

The EPA does say however, that while ethanol may help reduce greenhouse gas emissions – reduction of carbon monoxide occurs in the winter and ethanol may increase smog levels in the summer. Ethanol releases more nitrogen oxides a key element of smog, and evaporates more easily than gasoline – adding other air pollutants.

The tone set at this week's news conference was not just about fuel independence through production of homegrown energy but the need for more fuel efficient vehicles. Appearing at the same news conference as the EPA, the National Highway Traffic Safety Administration announced it will ask Congress to give the Secretary of Transportation authority to increase standards for Corporate Average Fuel Economy -- or CAFÉ for the auto industry.

Nicole Nason, National Highway Traffic Safety Administrator: "If the Administration draft legislation is enacted soon, NHTSA will begin a rule-making so cars rolling off the assembly line 2010 will have to meet higher CAFÉ standard and make their contribution to our energy and national security by saving more fuel."

All the components of the Renewable Fuel Standard are intended to meet President Bush's goal to reduce gasoline consumption 20 percent in ten years.

 


Tags: biofuels news renewable fuels