Taking a Fresh Look at Renewable Fuels It’s time to refocus on fuel supply vulnerabilities, environmental policies and contingencies. BY JOE O’BRIEN
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f ever there was a bigger picture that is difficult to bring into focus, that picture is the United States renewable fuel program. In its current form, the Renewable Fuel Standard significantly influences the composition of the U.S. motor fuel supply by mandating renewable fuel volume obligations. The program teeters on a combination of greenhouse gas emission reduction goals, consumer demand, automotive technology, agricultural market conditions, regional fueling capabilities and federal oversight, which oscillates with the political leanings of the administration in office at the time. That notwithstanding, because such a critical resource rests in the balance, care must be taken to advance a fuel/energy program that is as thoughtful in its implementation as it is ambitious in its efforts to reduce carbon emissions. With the Environmental Protection Agency set to review the RFS program for 2022 amid continued efforts to set biofuel volume requirements for 2023 and beyond, now is a judicious time to take a step back and reconsider the dynamics at work to bring the bigger picture back into focus. 14 | FMN Magazine WINTER 2022
VULNERABILITIES TO ADDRESS The eventual depletion of global oil reserves isn’t the only fuel supply vulnerability facing the United States. If you accept that climate change is plausible, then you must also consider how changes to the environment could affect fuel production. Conditions for growing feedstocks used in biofuels could diminish production capabilities. Extreme weather conditions may test the reliability of refining infrastructure. And it’s not just unstable weather conditions the fuel industry needs to be concerned about—digital threats also persist. The Colonial Pipeline cyberattack that shut down the largest fuel pipeline in the U.S. illustrated what’s at stake. And while the breach demonstrated susceptibility in the petroleum sector, it is by no means the only critical energy source that is susceptible to a hack. These types of vulnerabilities have the potential to compromise the supply of fuel for large regions of the country. This is an extremely important consideration because the United States may be moving toward a hub-andspoke model of fuel distribution. This distribution model will maximize economically viable energy sources that are available in geographical areas. For example, electric vehicle charging is likely to expand where wind farms and solar energy support the electrical grid. However, if there were a catastrophic failure of the electrical grid in those regions, supply challenges could cripple a region dependent on that form of transportation. ENVIRONMENTAL POLICY APPROACHES Some of the discussion about new policies to reduce greenhouse gases centers around low-carbon fuel standards, such as those adopted by California, Oregon and Washington. Minnesota FuelsMarketNews.com
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