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A Charged But Successful RFS Debate

By Michael McAdams | August 20, 2013

In Washington, the renewable fuel standard (RFS) remains a lively topic of debate. On July 23-24, the House Energy and Commerce Committee hosted two panels that included 15 stakeholder groups to explore the current impacts of the RFS. These panels brought together representatives serving the interests of biofuels, oil, automotive, agriculture and the environment. 


I represented the Advanced Biofuels Association on the first panel, alongside Bob Dinneen, president and CEO of Renewable Fuels Association; Jack Gerard, president and CEO of the American Petroleum Institute; Charles Drevna, president of American Fuel & Petrochemical Manufacturers; and Jeremy Martin, a senior scientist for the Union of Concerned Scientist. Our panel was peppered with questions for nearly three hours. In what could fairly be described as a charged environment, no less than six members of Congress addressed this first panel and explained that the Committee was neither likely to repeal the RFS nor leave the program untouched. 


Both Gerard and Drevna took the position that the RFS was broken and beyond fixing, and therefore should be repealed. However, Dineen and I were able to illustrate that the blend wall issues being discussed represented less than two-tenths of one percent of the entire fuels pool projected in 2013 for America. I also informed the Committee that the private sector has invested $14.7 billion over the last six years in an effort to stand up the advanced and cellulosic sector called for under the RFS, according to Bloomberg Energy. 


In more targeted questioning, members of the committee probed into the progress of the advanced and cellulosic sectors. Although the oil industry representatives continued to complain that there are no cellulosic gallons available and that they are being taxed, I was able to highlight the opening of a number of cellulosic facilities currently making gallons. Additionally, I reminded the committee of the recent district court case, which vacated the 2011 and 2012 cellulosic standards and returned their funds. Problems addressed and remedied.


Of particular interest were the bipartisan natures expressed and the interest from both sides of the aisle to continue support for the advanced and cellulosic industries. For example, at one point during the panel, Congressman Joe Barton, R-Texas, told Mr. Gerard that if he had spent $15 billion, he would not be asking the committee to ignore the progress and investment.


At the end of the ABFA statement, I suggested the committee draft a letter inquiring as to EPA’s authority to deal with any of the short-term blend wall issues. I also advised that the EPA not only has sufficient authority to address these issues in an expeditious fashion, but also that Congress should encourage EPA to release a framework for both 2014 and 2015 to send a clear signal as to how they plan to set the future Renewable Volume Obligations (RVO). 


I am delighted to write that on Aug. 6, EPA released its 2013 final RVO numbers, which once again lowered the cellulosic pool in line with the court directive to six million gallons for 2013. In a major victory for the ABFA and National Biodiesel Board, the EPA denied the request from Growth Energy and RFA to lower the advanced pool and maintained the number at 2.75 billion gallons. This is a great accomplishment for the advanced biofuels industry in just three short years. In addition, EPA stated their plan to release 2014 RVO numbers for comment in late September. In its statement, EPA suggested it has the necessary authority to address current concerns with the blend wall and will evaluate what the appropriate numbers will be for 2014. 


These latest actions have set about a dual track to address blend wall concerns between the regulatory process, led by EPA, and the legislative process, led at this time by the House Energy and Commerce Committee. As such, we can expect an extremely active and eventful fall for the RFS. So, stay tuned and stay engaged, as I expect everyone reading this column has an interest in the outcome of this debate.

Author: Michael McAdams
President, Advanced Biofuel Association
(202) 469-5140
Michael.McAdams@hklaw.com

 

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