By MARK DRAJEM
US renewable fuel quotas may end up higher than a proposal
issued last year because gasoline use is climbing, the Environment
Agencys chief said.
Administrator Gina McCarthy told an investors
conference in New York that the quotas, which are months
overdue, will be released soon. She declined to discuss any
specific figures, while laying out the rationale for a modest
Tim Cheung, a research analyst at ClearView Energy Partners
in Washington, predicted the EPA will require 13.6 billion
gallons of ethanol
be blended into gasoline
for vehicles -- about 600 million gallons more than the
We think the upward revisions are probably going to be
limited, Cheung said in an interview.
Investors, representatives of refiners Valero Energy and
Tesoro, and ethanol
producers such as Poet LLC
are awaiting the EPAs final quotas to figure out this
years requirements and anticipate the future course of
the program. The cost of a renewable fuel credit, or RIN,
used by refiners to meet the mandate, increased to about 50
cents in recent months, after collapsing to 18 cents Nov. 15.
It was that day that the EPA issued draft 2014 standards to
require the use of 15.21 billion gallons (57.58 billion
liters) of renewable fuels, including about 13 billion
gallons of corn ethanol and 1.28 billion gallons of
biodiesel. Thats a 16% cut from the 18.15 billion
gallon total in the 2007 law.
The EPA agreed with refiners who said they are limited in how
much ethanol can be blended into the overall fuel supply. Ethanol
and other renewable-fuel
producers argue that only if EPA forces refiners to use a
higher share of renewable fuels will they come up with ways
to cross the so-called blend wall.
McCarthys comments today dont indicate that the
agency is rethinking its analysis of the blend-wall
constraints, Cheung said.