Shell and BP have diverged from the oil and gas industry’s main trade groups, which are calling for Congress to remove the Renewable Fuel Standard (RFS), a federal mandate that compels gasoline makers to blend in ethanol and other renewable fuels.Taking a more moderate approach, the companies are instead looking for the eight-year RFS to be modified.
Shell, BP Break With Trade Group Calling for Repeal of Renewable Fuel Standard
Shell and BP have diverged from the oil and gas industry’s main trade groups, which are calling for Congress to remove the Renewable Fuel Standard (RFS), a federal mandate that compels gasoline makers to blend in ethanol and other renewable fuels.
Taking a more moderate approach, the companies are instead looking for the eight-year RFS to be modified.
Shell’s downstream policy and advocacy manager, John Reese, has said that Shell generally supports the RFS, but believes it needs to be revised. In light of Shell’s partnership with Virent Inc. to produce advanced fuel alternatives made with plant materials, Reese says his company has slightly different interests than others in the oil industry, as a repeal of RFS would undermine its biofuels investments.
BP says it also has a vested interest in ensuring RFS remains in place — the company accounts for half of Butamax Advanced Biofuels, a joint venture with DuPont that aims to convert corn, wheat and other biomass into alcohol that has a higher energy density than traditional ethanol and can be blended into gasoline at refineries.
BP has outlined that it generally supports the goals of the RFS program to stimulate the development and deployment of biofuels technologies. However, the company recognizes that there are challenges with the standard that must be addressed, which is why BP is continuing to work with regulatory authorities to address these issues.
The RFS forces refiners to gradually increase amounts of ethanol and other fuel alternatives into the country’s transportation fuel supply to reach some 36 billion gallons by 2020.
Several oil industry leaders claim they are hitting a ‘blend wall’ where they can no longer mix in enough ethanol to meet RFS volumetric targets without exceeding a 10 percent threshold acceptable for use in all cars and trucks. The American Fuel & Petrochemical Manufacturers (AFPM) and American Petroleum Institute (API) have argued a full repeal of the RFS is necessary.
In June, Wendy’s and White Castle both unsuccessfully lobbied Congress to repeal the RFS, which claimed that under the Standard, fuel produced from soy, corn and other agricultural crops drives up food and grain prices.
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Mike Hower
Founder & Principal Consultant, Hower Impact
Mike Hower is the founder of Hower Impact — a boutique consultancy delivering best-in-class strategic communication advisory and support for corporate sustainability, ESG and climate tech.
Published Jul 31, 2013 2am EDT / 11pm PDT / 7am BST / 8am CEST