Governors' Biofuels Coalition

U.S. EPA would be compelled to base its annual cellulosic biofuel requirements on the previous year’s actual production under legislation introduced late yesterday by a bipartisan pair of House members.

The bill, introduced by Reps. Gregg Harper (R-Miss.) and Jim Matheson (D-Utah), addresses what the oil industry says has been a problem with cellulosic requirements over the last several years. The targets, which EPA sets each year under the renewable fuel standard, are consistently over-optimistic, the oil industry says, requiring companies to pay fines for fuel that does not yet exist.

Cellulosic biofuel refers to fuel made from plant-based materials such as agriculture residues, perennial grasses and municipal solid waste. Although there are several companies planning to start producing cellulosic fuel within the next few years, the industry has so far produced about 21,000 gallons, according to EPA data.

In a statement yesterday, the lawmakers — both members of the House Energy and Commerce Committee — said that the bill “simply requires the EPA to rely on actual industry production instead of bureaucratic predictions.”

“The agency’s current method for calculating these fuel standards,” Harper said, “leaves America’s energy suppliers with two options: pay government penalties or buy government credits. Either way, the cost is likely passed through to consumers who are already paying high gas prices.”

The bill comes less than a week after the agency released its targets for 2013 requiring cellulosic biofuel companies to produce an amount equivalent to 14 million gallons of corn-based ethanol. It also comes less than two weeks after a federal court vacated the agency’s 2011 requirement, finding it not accurate enough.

It is similar to legislation introduced last year by then-Rep. Jeff Flake (R-Ariz.), who has since moved on to the Senate (E&ENews PM, June 29, 2012).

The proposed legislation is the first in the 113th Congress to address an aspect of the renewable fuel standard; supporters and opponents of the RFS alike expect there to be several more bills throughout the year, as well as hearings on whether to repeal the standard.

The renewable fuels industry was quick to respond to yesterday’s bill, slamming it as “short-sighted” and playing into the hands of the oil industry.

“This bill guarantees that there would never be an incentive to produce any more cellulosic renewable fuel than was made last year, hardly a recipe for spurring innovation and investment,” said Fuels America, a coalition of biofuels, agricultural and national security interests.

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