Biofuel targets sent to White House

WASHINGTON - The U.S. Environmental Protection Agency on Friday sent its final targets for 2014 biofuel use to the White House as the long-delayed rule enters its last round of review before public release.

The Obama administration will now face a last-ditch round of lobbying from biofuel producers seeking changes to the rule and opponents of the renewable fuels mandate who hope regulators will stand firm on proposed cuts to the targets.

EPA angered ethanol and biodiesel producers in November when it issued a draft 2014 rule slashing federal requirements for use of ethanol and biodiesel in U.S. fuel supplies. Citing concerns that energy markets could not absorb the levels of biofuels called for by the law, the EPA lowered the 18.15 billion gallons of biofuels mandated for use in 2014 to 15.21 billion gallons.

Renewable fuels producers warned that unless EPA reversed course, investment in their industry would dry up.

Biofuel industry sources expect the targets will be higher in the final rule, but likely still far less than Congress intended when it formulated the Renewable Fuel Standard in 2007.

It is unclear how long the rule will remain at the White House's Office of Management and Budget. Such reviews can drag on for months, but OMB can move more quickly at times. Last year, the agency took just over 30 days to send the final targets back to EPA.

'We would not be surprised if OMB were to replicate last year's rapid turnaround,” ClearView Energy Partners said in a research note.

With the rule nearly nine months behind schedule, biodiesel producers have struggled with low fuel prices and market uncertainty.

'We can begin to reverse that damage with a meaningful increase in the biodiesel volume that is finalized as quickly as possible,” said Anne Steckel, of the National Biodiesel Board.

The proposed cuts were a win for the oil industry, which has long sought to repeal the Renewable Fuel Standard.