Bipartisan senators introduce bill to repeal RFS

Source: Amanda Peterka, E&E reporter • Posted: Friday, June 21, 2013

As the battle of biofuels continues in Washington, D.C., a bipartisan group of senators yesterday introduced legislation to repeal the renewable fuel standard.

The standard requires that U.S. EPA each year set levels of conventional ethanol and advanced biofuels that must be blended into the nation’s petroleum-based fuel supply. Opponents say it has become unworkable given the level of ethanol that can technically be used in the market today and the amount of the nation’s corn supply being gobbled up by ethanol producers.

“The renewable fuel standard is fundamentally broken and beyond repair,” bill sponsor Sen. John Barrasso (R-Wyo.) said. “Instead of delivering meaningful environmental benefits, it’s driven up food and fuel costs for American families.”

The bill — the first-ever RFS repeal bill introduced in the Senate — is co-sponsored by Sens. Mark Pryor (D-Ark.), Pat Toomey (R-Pa.), Saxby Chambliss (R-Ga.), Ted Cruz (R-Texas), Mike Enzi (R-Wyo.), John Boozman (R-Ark.) and Tim Scott (R-S.C.).

Rep. Bob Goodlatte (R-Va.) filed similar repeal legislation in the House earlier this year (E&E Daily, April 11).

The lawmakers said the RFS has contributed to higher food and fuel prices and requires refiners to blend more advanced biofuel into their products than is currently available in the market. They also criticized EPA’s handling of the standard, including the agency’s decision to deny requests by several livestock-state governors last year to waive the corn ethanol portion of the standard as corn prices spiked during the drought.

As the American Petroleum Institute, the main trade group for the oil and gas industry, announced its support for the measure yesterday, a coalition of biofuel, agricultural and national security interests slammed the legislation as being protectionist for the oil industry.

Biofuel supporters say the RFS is working as intended and has created a market for domestic fuel that can help reduce the country’s dependence on foreign oil and mitigate environmental impacts of oil and gas.

“It’s unacceptable that Sen. Barrasso would introduce legislation that protects the oil industry’s monopoly over our nation’s fuel supply,” the Fuels America coalition said. “Repealing the RFS creates a destabilized policy environment, breaks the bipartisan commitment from Congress to the private sector to drive use of renewable fuel and sustains the vulnerability of American consumers to the global price of oil.”

RFS opposition extends beyond the oil industry. As the senators filed the bill yesterday, the trade group for chain restaurants announced it was launching a campaign to do away with the standard.

National Council of Chain Restaurants Executive Director Rob Green said the campaign will involve visits to congressional offices in Washington, D.C., and speaking with lawmakers in their home districts. The group launched the campaign in a Hill briefing that featured remarks from Goodlatte and fast-food franchise owners, among others.

The RFS has been a “long-standing interest” of chain restaurants, Green said, because of the increase in the cost of commodities that go into producing food. He pointed to an analysis done by PricewaterhouseCoopers last year for the organization that found the RFS was having an annual impact of $3.2 billion on the industry and costing individual restaurants $18,000 a year (Greenwire, Nov. 28, 2012).

“What we’re trying to do is make sure there’s a small-business voice in this debate,” Green said of the campaign’s goal

Green said his group is focusing its message on the House, which has seemed more open to debating the renewable fuel standard this Congress.

Next week, the House Energy and Commerce Committee will hold its first in a series of hearings on the standard; the panel has for months been issuing white papers in preparation for the meetings.

The small-business message has so far been resonating on Capitol Hill, Green said.

“It’s very powerful. We’ve seen an evolution where, say, 15 months ago, we would have our members go into an office and the question would be, ‘Why are you here? Why do you care about the RFS?'” he said. “It’s very different now. … There’s an awareness that it’s impacting small businesses.”

Biofuel organizations yesterday slammed the restaurant group’s campaign. A study released last week by the Renewable Fuels Association found no direct correlation between federal biofuels mandates and increasing food prices. It blamed high oil prices, rapidly expanding global demand for agricultural commodities, speculation in commodity markets and expansionary U.S. monetary policy (E&ENews PM, June 12).

“If the NCCR is looking for the culprits behind increased food costs, they should look no further than the mirror and at their supporters at Big Oil who have relentlessly pursued the efforts to repeal the renewable fuel standard,” said Tom Buis, CEO of ethanol trade group Growth Energy. “They are trying to blame the ethanol industry to justify their actions of constantly increasing food prices.”