Biofuel Mandate Opponents Build Overhaul Momentum

Source: By Brian Dabbs, Bloomberg • Posted: Monday, November 21, 2016

A Trump administration and new leadership of the Senate’s environment committee may breathe new life into efforts to roll back the Environmental Protection Agency’s renewable fuel standard, lawmakers and advocates say.

House members are continuing to build momentum around bipartisan legislation(H.R. 5180) to limit EPA ethanol requirements in total transportation fuel at 9.7 percent.

Opponents of the mandate also are happy about the likely selection of Sen. John Barrasso (R-Wyo.), a staunch repeal supporter, as chairman of the Environment and Public Works Committee, arguing he may help to convince the Trump administration to approve the changes they want.

Current statute requires the use of 36 billion gallons of biofuel throughout the transportation fuel supply chain by 2022, while establishing different volume mandates for conventional, advanced and cellulosic biofuels.

House Champions Eye Window

The House legislation now has 117 lawmakers on board, including 11 Democrats, and original co-sponsors are aiming to add to that list in order to grease a path in the 115th Congress, Rep. Bill Flores (R-Texas), a leader on the bill, told Bloomberg BNA.

“We’ve got a great coalition of people that support this, and it’s a good, bipartisan, market-based, sort of center of the fairway type of solution,” Flores said. “I feel pretty good about it for the next Congress.”

Barrasso likely will be an ally, Flores said. Sen. Jim Inhofe (R-Okla.), the outgoing EPW chairman, also has supported an overhaul of the program.

Barrasso, who currently chairs the Indian Affairs Committee, has pushed for outright repeal over the past several years. His office didn’t respond to a Bloomberg BNA request for comment.

Next Congress

“Immediately in the new Congress we can continue to build on the momentum we’ve made in the House and in the first half of the year really hit the ground running,” Frank Macchiarola, an American Petroleum Institute director, said on a Nov. 16 conference call.

Democratic supporters are led by Rep. Peter Welch (D-Vt.), Rep. Peter DeFazio (D-Ore.), a co-sponsor, told Bloomberg BNA.

“Ethanol is a total loser, but I don’t think we’re ever going to get rid of it because of the Senate,” DeFazio said. “We should do away with the current standard, and if we move on to other standards of things that are produced more sustainably and have a net benefit, I’d look at it.”

The renewable fuel standard is largely fulfilled by blending ethanol made from corn kernels, but the law is intended to encourage advanced biofuels such as cellulosic ethanol, which is produced from other sources such as corn stover and landfill gas. Advanced biofuels have lower greenhouse gas emissions.

The API said the EPA’s standard is a roadblock to a competitive fuel market, and some environmental groups question its impact on decreasing carbon emissions. Meanwhile, the EPA praises the RFS program for reducing greenhouse gases and reliance on imported oil.

Trump Sent Mixed Signals

President-elect Donald Trump told the Iowa Renewable Fuels Association at the outset of 2016 that the U.S. should increase ethanol mandates, but in September his campaign published a fact sheet calling for removal of the biofuel blending credit system.

Supporters of the mandate are urging Trump to maintain the ethanol status quo and improve the market for ethanol.

“We are confident Mr. Trump will continue to support the expanded production and use of fuel ethanol. Moreover, the president-elect is committed to removing regulatory barriers that impede growth,” Renewable Fuels Association President Bob Dinneen said following the election.

Lawmaker Issues Similar Statements

Sen. Chuck Grassley (R-Iowa) told Bloomberg BNA he would continue to support the renewable fuel standard.

“I would expect President-elect Trump to adhere to his clearly stated position that he supports the RFS and the ethanol industry and that it’s important to the goal of energy independence and as he said, his goal of making America great again,” Grassley said.