Senate holds hearing on RFS oversight

By Erin Voegele | February 25, 2016

On Feb. 24, the Senate Committee on Environment and Public Works held a hearing on oversight of the renewable fuel standard (RFS). Janet McCabe, acting assistant administrator of the U.S. EPA’s Office of Air and Radiation, and Brook Coleman, executive director of the Advanced Biofuels Business Association, were among those offering testimony.

During the event, McCabe stressed that the 2017 RFS rulemaking process is progressing on time and the agency expects to issue final volume requirements by the November 2016 statutory deadline. When asked about delays associated with the 2014, 2015 and 2016 RFS rulemaking, McCabe stressed that the E10 blend wall was a contributing factor, as overcoming that obstacle provided significant challenges. “There are very divergent views among the people who are affected by the RFS about how EPA should exercise the responsibility that congress gave it,” she explained. “That led to the 2014 rule being delayed.” McCabe also noted the recently released rule to set 2014, 2015 and 2016 renewable volume obligations does push mandates beyond the blend wall.

McCabe also noted that in setting annual volume requirements, the EPA looks very carefully at what is going on in the industry and reaches out to individual companies. She also said the rulemaking reflects the fact that there have been real challenges in getting additional biofuels into the market, and stressed that the RVOs set by the agency represent significant, substantial growth over historical levels.

According to McCabe, in setting the recent RFS standards, the EPA reviewed information on what could be reasonably, but ambitiously, achieved. She also indicated that information reviewed by the agency led it to believe achieving statutory volumes simply was not achievable if the agency was doing its job in a responsible way. She said the EPA used the waiver authority provided by congress to waive those standards, but only to the degree the agency though was absolutely necessary in order to continue to provide a signal for growth in the biofuels industry.

In his testimony, Coleman noted oil dependence is still a problem and recent trends in oil prices are not changing the big picture. According to Coleman, low gasoline prices are currently occurring primarily because controlling interests in the Organization of the Petroleum Exporting Countries are using their market power to try to snuff out the U.S. oil boom. He also pointed out that even in the unlikely event a significant portion of new U.S. oil production survives OPEC’s strategy, the vulnerability of the U.S. economy to foreign oil dependence is all about price. While in making arguments against the RFS, the oil industry wants policy makers to believe the economic and national security threat from oil dependence has abated, Coleman stressed that is not the case.

Coleman also delivered testimony about the need for aggressive policies to help attract investments in advanced biofuels, and addressed myths associated with the inability to overcome the blend wall, such as claims that cars can’t use higher blends, that fueling infrastructure can’t handle higher blends and that higher blends are not priced low enough to drive demand.

Brian Jennings, the executive vice president of the American Coalition for Ethanol, weighed in on the hearing.  “While we appreciate that the administration improved the final renewable fuel standard blending targets for 2016 compared to the proposed rule, regrettably, the methodology used to waive volumes for 2016 protects the old way of doing business by obstructing consumer access to cleaner fuels, stifling competition in the marketplace, and undermining innovation,” he said. “ACE members have made significant biofuel production advancements because of the RFS and we know that further innovation is within reach if federal policy continues to reward a competitive marketplace. ACE is strongly committed to ensuring consumers have access to high octane, low carbon, affordable blends of ethanol and we will explore all options at our disposal to achieve that goal with this administration and the next.”

Tom Buis, co-chair of Growth Energy, also issued a statement commenting on the hearing. “Homegrown ethanol and the RFS are major wins for the American people. Biofuels, such as ethanol, are a 21st century fuel for 21st century vehicles. It is our only alternative to oil, and the RFS is the most effective policy in reducing cancer-causing chemicals and the toxic emissions that come from oil’s monopoly on our motor fuel supply. The RFS supports consumer choice, creates hundreds of thousands of jobs across America, strengthens our energy security and slashes climate change causing emissions,” he said. “Policies like the RFS improve America’s climate, national security, rural economy and consumer choice. Repealing or changing the RFS would turn back the clock and undermine the progress we’ve made toward increasing America’s energy independence and cleaning our air and environment.”