Last Thursday, the Environmental Protection Agency released its proposed rule for the 2013 Renewable Fuel Standard (“RFS2”) volume obligations. Every year the EPA is required to determine and publish the annual volume requirements for each class of renewable fuel that obligated parties will have to comply with for the upcoming year under the RFS2 program. The volumes required under the proposed rule for 2013 are as follows (generally in ethanol equivalent volume): 14 million gallons of cellulosic biofuel, 1.28 billion gallons of biomass-based diesel (actual volume), 2.75 billion gallons of advanced biofuel, and 16.55 billion gallons of renewable fuel. As always the categories are nested and the advanced biofuel volume includes the volumes set for the cellulosic and biomass-based diesel categories. The renewable fuel category accounts for all renewable fuel including traditional corn starch ethanol.
Three of the four categories are consistent with the volumes set forth by statute. The volume for cellulosic biofuel, however, is set by this rule because it must be the lesser of the statutory volume and EPA’s projection of industry production for any given year. As with each ruling prior to this one under the program, EPA set a dramatically lower cellulosic biofuel volume than the statutory volume based on its assessment of the industry’s status. Rather than 1 billion gallons as would otherwise be required by statute, EPA is requiring obligated parties to account for 14 million gallons of cellulosic fuel. Despite the dramatic reduction from the statutory requirement, this is significant because it is an increase over the 2012 standard of 10.45 million gallons that has been the subject of considerable recent controversy.
Just a few days earlier, the D.C. Circuit Court ruled that EPA impermissibly set the 2012 standard with an eye toward promoting industry growth when, by statute, the agency should have simply made an accurate projection of what the industry could produce in the given year. While petitioners in that case asserted that the EPA volume for cellulosic ethanol should be equivalent to that which the Energy Information Administration (“EIA”) projects, the court instead determined that EPA’s projected volume should be simply based on the EIA projections.
In developing the 2013 requirement for cellulosic ethanol, the EPA relied on EIA estimates but also its analysis of more than 100 biofuel production facilities. The proposed rule includes a detailed analysis of all of the plants currently registered with EPA and able to produce cellulosic RINs. Of those 6 plants, it assumes two (INEOS Bio and KiOR) will be generating cellulosic biofuel RINs in 2013 in an amount equal to 14 million gallons of ethanol. The EIA estimate for 2013 is 13.1 million gallons of ethanol – which is also nearly exclusively based on production from those two plants.
Although the EPA also has authority to reduce the advanced biofuel category based on its decision to reduce the cellulosic biofuel category, the agency decided to keep the broader category at the statutory volume based on its projections of other domestic advanced renewable fuels as well as the ability to import sugarcane ethanol from Brazil. Comments on the proposed rule must be received no later than 45 days after the rule is published in the Federal Register.
I’m excited to report that my colleague and fellow Renewable + Law blogger Graham Noyes was recently named among the “Top 100 People in Bioenergy” by readers of Biofuels Digest and the publication’s editorial board. Graham was one of only three attorneys to make the list, which was headed by U.S. Agricultural Secretary Tom Vilsack for the third consecutive year. CEO Jonathan Wolfson and President Harrison Dillon of client Solazyme placed fourth in the list.
More than 300 individuals received votes in the annual poll, including company executives, scientists, researchers and policy leaders. Overall, leaders from organizations in 13 different countries were recognized in the poll. You can read the full list here.
The California Bioenergy Interagency Working Group has released its 2012 Bioenergy Action Plan, with the goal of facilitating the development of bioenergy in California on a variety of levels, including research and development support, streamlining and consolidating permitting, facilitating access to transmission, pipelines, and other distribution networks, and policies and laws to monetize the benefits of bioenergy. The Working Group is a broad coalition of state energy, environment, and resources agencies, including the California Public Utilities Commission, Energy Commission, Air Resources Board, Natural Resources Agency, Cal Fire, Cal Recycle, and the Department of Food and Agriculture, as well as the California Biomass Collaborative and the Central Valley Regional Water Quality Control Board. The 2012 Plan builds on the Working Group’s 2006 and 2011 Bioenergy Action Plans, providing a more detailed set of actions for the constituent agencies to undertake and incorporating more of Governor Brown’s policies for energy, waste reduction, and job creation. Bioenergy has met some obstacles in California in recent times, including challenges by major and local environmental groups to biomass-fueled electrical generation contesting claims of greenhouse gas neutrality and the Energy Commission’s suspension, in most cases, of pipeline biomethane as an eligible renewable fuel for gas-fired facilities to help meet the state’s 33% renewable portfolio standard. A concerted focus by the state agencies on specific Action Plan items will undoubtedly help move bioenergy forward in California. Bioenergy advocates should also keep an eye on several bioenergy and biomethane bills still active during this last week of the California 2011-2012 Legislative Session, including A.B. 1900, A.B. 2196, and S.B. 1122.
Stoel Rives is honored to have been named the top partner in the Professional Counselors and Services category by the readers of Biofuels Digest, the most widely read daily news digest in the biofuels industry. Biofuels Digest Publisher Jim Lane and his team produce a great on-line magazine and some of the best conferences in the industry, and we are proud that the readership values the work of the firm.
Stoel Rives attorneys provide counsel on all aspects of biofuel and biochemical projects and are committed to providing valuable assistance to this exciting and dynamic industry. The firm continues to focus on bioenergy project development including real estate, permitting, financing, commercial agreements, RFS and regulatory work. Firm attorneys have extensive experience with both first and second generation projects and regularly provide useful resources for the sector which are available for download here.
Biofuels Digest’s Hot 40 Partners recognizes the industry’s top forty partners, as voted by the readers of Biofuels Digest and a panel of international selectors. According to Jim Lane, readers voted for companies that add credibility to their efforts, and accelerate their path to commercialization. The Biofuels Digest is an indispensible news source for the biofuels industry, covering producer news, research, policy, conferences, and financial news. The Digest reaches over 28,000 subscribers each weekday, and also publishes in-depth market research and data, including the Quarterly Biofuels Business Outlook, and the Advanced Biofuels Project Database.
Through industry presentations and publications as well as through our blog, our energy attorneys are dedicated to helping you stay informed and knowledgeable about legal developments that affect your business.
Visit our website for the latest calendar of events. Upcoming highlights include:
Utah Solar Tour 2011
September 24 – Salt Lake City, UT
Join Stoel Rives attorney Julia Pettit for the Utah Solar Energy Association’s annual Solar Tour. This year’s tour features sites with geothermal heat pumps, small wind, passive solar design, solar shingles, and many energy efficiency design techniques. Stoel Rives is proud to be a Gold sponsor at this event.
In-Depth Tax Planning for Renewable Energy Projects
September 26 – Chicago, IL
Stoel Rives attorneys Greg Jenner, Adam Kobos, Carl Lewis and Kevin Pearson will serve as faculty for this course which will outline tax issues involved in developing renewable energy projects and negotiating tax equity incentives.
September 26-27 – San Francisco, CA
Join Duff Bryant, Julia Pettit, John McKinsey and over 400 senior executives and investors as they discuss opportunities for private equity and venture capital in clean tech energy companies. Review in detail the latest technologies moving the industry forward, and examine prospects for rapid renewable growth across the West Coast. Be sure to visit Stoel Rives in the exhibit hall!
National Hydropower Association Pumped Storage Workshop
October 3 – Bellevue, WA
Join Stoel Rives attorneys Bill Holmes, David Benson, Cherise Oram, and Michael O’Connell for this workshop intended for industry professionals with an interest in the development of new pumped storage projects. Bill Holmes will join the discussion panel What Would Energy Storage Asset/Revenue Modeling Look Like? from 4:00-5:00 p.m.
Independent Energy Producers Association Annual Meeting
October 3-5 – South Lake Tahoe, CA
John McKinsey and Seth Hilton will be in attendance at The IEP 30th Annual Meeting, featuring speakers from CPUC, CARB, CEC, and FERC. Stoel Rives is a proud sponsor at this event.
Developing Grid Storage Projects
October 5-6 – Dallas, TX
John Thompson, David Hattery and Bill Holmes are headed to Dallas to explore market opportunities, models, technologies and barriers to energy storage. Bill Holmes will Chair the conference, and instruct the pre-conference workshop, Developing the Business Case for Grid Storage on October 5. Other Stoel Rives presentations on October 5 include John Thompson, presenting Intellectual Property Protection for Grid Storage, and David Hattery, presenting Negotiating the Terms and Navigating the Risk of a Procurement Contract and Other Financial Documents.
Biogas USA West 2011
October 11-12 – San Francisco, CA
Visit with David Benson and Lee Smith, who will join the discussion panel Project Development Optimization on October 11. Be sure to attend the post-conference event reception, proudly hosted by Stoel Rives.
Solar Power International
October 17-20 – Dallas, TX
Stoel Rives attorneys David Benson, Kristen Castaños, Bill Clydesdale, David Hattery, Bill Holmes, Greg Jenner, Morten Lund, Jennifer Martin, Julia Pettit, David Quinby and Howard Susman are headed to Dallas! Julia Pettit will join the Financing Strategies for Utility-Scale Projects discussion panel, and Bill Holmes will moderate the discussion panel, Energy Storage Market and Policy Developments. Visit Stoel Rives at booth #3043 in the exhibit hall!
GEA Geothermal Energy Expo & GRC Annual Meeting
October 23-26 – San Diego, CA
Stoel Rives attorneys John McKinsey and Erin Anderson will be in attendance at the Geothermal Energy Association Energy Expo, co-located with the Geothermal Resources Council Annual Meeting. Erin Anderson will present during the pre-meeting workshop, held on Friday, October 21 from 8 a.m. – 5 p.m. While you’re there be sure to visit Stoel Rives in the exhibit hall!
CALIFORNIA RPS: Meeting the Mandate
October 24-25 – Los Angeles, CA
On Monday, October 24, Seth Hilton will present, In-State vs. Out-of-State Renewable Resources to Satisfy RPS Requirements from 10:30-11:15 a.m.
Green Energy M&A Outlook for 2012
November 15-16, 2011 – Santa Clara, CA
Stoel Rives’ Duff Bryant and Ed Einowski, will serve as Summit Co-Chairs, and on Tuesday, November 15, Julia Pettit will moderate the discussion panel, The Green Corporate M&A Landscape, from 8:45 - 9:45 a.m. Stoel Rives is proud to be a Platinum Sponsor of this event.
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We are pleased to announce that the first edition of THE LAW OF BIOMASS is available now. THE LAW OF BIOMASS is a guide which contains insights and lessons that our team has developed through our position as a market leader in renewable energy legal issues. THE LAW OF BIOMASS focuses on electricity generated from biomass sources. As changes in the energy markets and views on natural resources create a compelling case for renewable and sustainable energy, biomass is emerging as a positive solution.
We hope that you find THE LAW OF BIOMASS useful. To request a copy of THE LAW OF BIOMASS, please visit our website: http://www.stoel.com/lawofseries.aspx.