Clinton adviser declines to discuss reversing ethanol mandate

Source: By JOHN SICILIANO, Washington Examiner • Posted: Friday, July 29, 2016

Hillary Clinton’s energy adviser refused Wednesday to discuss reforming the nation’s ethanol mandate, after a former Obama adviser said reforms would be advisable under a new Democratic administration.

“I’ll take a pass,” Trevor Houser said during a Politico energy forum held on the sidelines of the Democratic National Convention in Philadelphia.

Houser’s response followed a recommendation by President Obama’s former climate and energy adviser, Heather Zichal, on how a new Democratic administration should act to fix what she admitted was a broken Environmental Protection Agency Renewable Fuel Standard.

Houser was asked by the forum’s moderator to respond to Zichal’s comments, which he declined.

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“Mandates aren’t necessarily a perfect way to regulate,” Zichal said.

Zichal, who served as Obama’s top energy adviser in the first half of his second term as president, suffered through a number of major problems with the mandate, including biodiesel credit fraud and the “blend wall” crisis that saw the price of ethanol credits spike. The oil industry says that more than 10 percent ethanol in gasoline will damage vehicle engines, which it calls the “blend wall.” And because the Renewable Fuel Standard dictates how much ethanol and biofuel needs to be added to gasoline based on volume rather than a percentage, if less gasoline is produced, the percentage of biofuels climbs higher, threatening the blend wall.

The problems drove the EPA to reduce the ethanol blending requirements to avoid fuel supply shortages and other potential calamities. The ethanol industry argues that the administration bought too heavily into the arguments made by the oil industry to unravel the program and says that the program should not be scrapped.

Zichal said she would “hate to see” the U.S. reverse the entire program and “throw the baby out with [the] bathwater.” She is recommending that the next administration “look at some modifications.” She suggested finding a new balance between the program’s support for corn-based ethanol and the newer, more advanced biofuels.

Both Democrats and Republicans have proposed legislation to repeal the ethanol portion of the program and keep the RFS’ support for fuels that do not require crops to produce and can be safely blended in gasoline and diesel at higher levels than ethanol without the risk of engine damage.