Bipartisan House bill would slash RFS requirements

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, April 10, 2013

Lawmakers plan to unveil a bipartisan reform bill today that would shrink the renewable fuel standard and reverse U.S. EPA’s decision to allow more ethanol in gasoline.

The measure would revise the overall RFS target to 21 billion gallons of biofuels by 2022 and waive any advanced biofuel requirements before the beginning of next year, according to a draft obtained by E&E Daily. It would also cap ethanol allowed in gasoline at 10 percent.

Virginia Republican Bob Goodlatte plans to introduce the bill today at an afternoon news conference. Reps. Steve Womack (R-Ark.), Jim Costa (D-Calif.) and Peter Welch (D-Vt.) are original co-sponsors.

The 2007 RFS requires 36 billion gallons of biofuels to be blended into the nation’s motor fuel supply by 2022. EPA sets yearly RFS targets for both conventional ethanol and advanced biofuels; this year, refiners are required to blend 13.8 billion gallons of corn ethanol and a proposed 2.75 billion ethanol-equivalent gallons of advanced fuels.

EPA has proposed that 14 million ethanol-equivalent gallons must come from cellulosic sources, or plant-based materials such as agricultural residues, switchgrass and municipal solid waste.

RFS proponents say the standard is needed to reduce U.S. dependence on oil and build up the domestic advanced biofuels industry. The RFS has come under fire in recent months from a strange-bedfellow coalition of oil, auto, livestock and environmental interest groups that argue the standard isn’t relevant under today’s market conditions.

The Goodlatte legislation represents the most sweeping attempt at RFS reform this year. It incorporates several measures that other lawmakers have introduced already this Congress.

Along with dropping the standard’s overall requirements by 42 percent, the bill would also require EPA to base its annual cellulosic biofuel targets on the actual production in the previous calendar year. The measure addresses a complaint by oil industry groups that the agency has been penalizing refiners for not blending fuel that does not yet exist in commercial quantities in the United States.

Earlier this year, a federal appeals court agreed with oil groups, sending EPA back to the drawing board on its 2012 target. The agency has since decided to zero out its requirements for last year — 20,000 gallons were actually produced — and is considering doing the same retroactively for 2011.

The bill would also reverse EPA’s decision to allow E15 — gasoline containing 15 percent ethanol — into the market. Studies funded by oil and auto groups have linked the fuel with engine damage and fuel system failure, while two separate coalitions of interest groups have petitioned the Supreme Court to take up their challenge of the decision.

A handful of gas stations are selling the fuel, but concerns over liability have slowed its introduction.

Goodlatte, who last Congress introduced measures to both repeal the RFS and link its requirements to the availability of corn, has not released any further detail on the legislation. He’s made it clear, however, that his ultimate goal is RFS repeal.

“We’re looking to build consensus, and we’ll push for whatever is politically achievable,” Goodlatte said at a briefing late last year, “and if it turns out that reforming the law is more easy to accomplish, initially we’ll push for that, but our ultimate goal is to not have the government interfering in the marketplace.”