WASHINGTON — The U.S. Environmental Protection Agency proposed a reduction in the 2014 Renewable Fuel Standard statutory levels for ethanol and advanced biofuels.

The proposal presented for public comment is to cut ethanol to 13 billion gallons from the 14.4 billion goal for 2014 set in the RFS. It also freezes the biodiesel level at 1.28 billion gallons and reduces cellulosic biofuels to 17 million from 1.75 billion gallons.

Biodiesel production is on track to set a production record, exceeding 1.7 billion gallons this year.

The proposal seeks to put the RFS program on a steady path forward — ensuring the continued long-term growth of the renewable fuel industry — while seeking input on different approaches to address the “E10 blend wall,” according to an EPA statement.

Nearly all gasoline sold in the U.S. now is E10, which is fuel with up to 10 percent ethanol. While E85 is an option for some vehicles, growth in that area has been slow and primarily limited to the country’s midsection.

“Production of renewable fuels has been growing rapidly in recent years. At the same time, advances in vehicle fuel economy and other economic factors have pushed gasoline consumption far lower than what was expected when Congress passed the Renewable Fuel Standard in 2007,” the EPA said.

“As a result, we are now at the E10 blend wall, the point at which the E10 fuel pool is saturated with ethanol. If gasoline demand continues to decline, as currently forecast, continuing growth in the use of ethanol will require greater use of higher ethanol blends such as E15 and E85.”

The EPA also is seeking comment on petitions for a waiver of the renewable fuel standards that would apply in 2014. EPA expects that a determination on the substance of the petitions will be issued at the same time that the agency issues a final rule establishing the 2014 RFS.

Once the proposal is published in the Federal Register, it will be open to a 60-day public comment period.

The 2014 proposal seeks input on what additional actions could be taken by government and industry to help overcome current market challenges and to minimize the need for adjustments in the statutory renewable fuel volume requirements in the future.

“Looking forward, the proposal clearly indicates that growth in capacity for ethanol consumption would continuously be reflected in the standards set beyond 2014,” the EPA said. “EPA looks forward to further engagement and additional information from stakeholders as the agency works in consultation with the departments of Agriculture and Energy toward the development of a final rule.”

“For the first time, EPA has acknowledged that the blend wall is a dangerous reality and that breaching it would serious impacts on America’s fuel supply and would be harmful for American consumers,” American Petroleum Institute President Jack Gerard said in a conference call.

The National Biodiesel Board warned the proposal would cause plant closures and layoffs in the U.S. biodiesel industry and called on the Obama administration to recommit to developing American-made advanced biofuels.

“This proposal, if it becomes final, would create a shrinking market, eliminate thousands of jobs and likely cause biodiesel plants to close across the country,” said Anne Steckel, NBB vice president of federal affairs.

“It also sends a terrible signal to investors and entrepreneurs that jeopardizes the future development of biodiesel and other Advanced Biofuels in the United States.”

Twenty-one animal agriculture groups, including the National Cattlemen Beef Association, National Pork Producers Council, National Chicken Council, Milk Producers Council and National Turkey Federation, signed a letter in support of the EPA’s proposal.

“We appreciate this action as it acknowledges a problem exists with the current policy. The inflexible RFS mandate continues to have a detrimental impact on the economy and makes feeding animals risky because our industries are not competing on a level playing field,” the letter from animal agriculture said.

“Today is a step in the right direction. However, it is the responsibility of the Congress to find a lasting solution to this rigid, inflexible program and put livestock and poultry producers back on equal standing in the marketplace.”

“While only a proposed rule at this point, this is the first time that the Obama administration has shown any sign of wavering when it comes to implementing the RFS,” said Brooke Coleman, executive director of the Advanced Ethanol Council.

“EPA is in the right ballpark for cellulosic biofuels, and we are confident that the final number will be the right one for the industry in 2014. But bigger picture issues must be resolved in the final rule because advanced biofuel investors also pay attention to the big picture.

“What we’re seeing is the oil industry taking one last run at trying to convince administrators of the RFS to relieve the legal obligation on them to blend more biofuel based on clever arguments meant to disguise the fact that oil companies just don’t want to blend more biofuel. The RFS is designed to bust the oil monopoly. It’s not going to be easy.”

“This recommendation is ill-advised and should be condemned by all consumers because it is damaging to our tenuous economy and shortsighted regarding the nation’s energy future,” said National Corn Growers Association President Martin Barbre.

“Agriculture has been a bright spot in a failing U.S. economy, but current corn prices are below the cost of production. EPA’s ruling would be devastating for family farmers and the entire rural economy.”

“This announcement is a significant hit for family farmers,” said Paul Taylor of Esmond, president of the Illinois Corn Growers Association.

“Corn prices are already below the cost of production, and this announcement will cause corn prices to drop even further. Family farmers will have to borrow money to cover their family’s living expenses as a result of this announcement, while big oil realizes massive profits yet again.”

Rep. Bob Goodlatte, R-Va., who along with Reps. Peter Welch, D-Vt.; Jim Costa, D-Calif.; and Steve Womack, R-Ark., authored the Renewable Fuel Standard Reform Act, also commented about the EPA decision.

These same members led an October letter signed by 169 House colleagues urging the EPA to adjust ethanol levels.

“While the EPA’s slight reduction of the RFS for 2014 acknowledges that the mandate is unworkable, it is not enough to provide the much-needed relief businesses, farmers, and consumers need,” Goodlatte said.

“The announcement makes it even clearer that it will now be up to Congress to fix this broken mandate. There is a growing appetite in Congress to reform the ethanol mandate, and I urge Chairman Upton and the House Energy and Commerce Committee to consider the RFS Reform Act as a legislative fix to the growing problems with the RFS.”