The Domestic Energy Producers Alliance (DEPA) sent the Environmental Protection Agency (EPA) leadership a letter today calling on the Agency to scale back and reconsider entirely the de facto Renewable Natural Gas (RNG) mandate under the federal Renewable Fuel Standard (RFS). The RFS RNG mandate interferes with the free market and unnaturally incentivizes the replacement of geologic natural gas with renewable gas in natural gas vehicles. Created from methane captured at landfills, RNG qualifies as a cellulosic biofuel under the Renewable Fuel Standard (RFS). This means, while it is much cheaper to produce than natural gas, RNG used in natural gas vehicles receives a massive subsidy – which can be as high as $1.80 an ethanol equivalent gallon in 2020 – to directly replace geologic natural gas in the transportation sector.
DEPA appreciates the Administration’s efforts to make America energy self-sufficient and the world’s number one producer of crude oil and natural gas. We believe the RNG mandate should be reduced in the 2021 RFS and seek advanced rulemaking to rescind RNG’s approval for the cellulosic biofuel category of the RFS.
In 2014 EPA allowed landfill gas to qualify as a cellulosic biofuel under RFS. RNG is now used to meet nearly the entirety of the cellulosic biofuel mandate and EPA has increased this RNG mandate by an average of almost 40% annually for each of the last five years. Cellulosic RFS credits were as high as $1.67 per gallon earlier this year. DEPA believes this subsidy is unnecessary and unfair in the natural gas marketplace.
These measures are necessary to ensure a competitive American natural gas vehicle market that maximizes consumer choice, while minimizing fuel costs.