Draft RFS bill aims to boost ethanol demand

Source: Marc Heller, E&E News reporter • Posted: Monday, November 26, 2018

Two lawmakers today released a long-awaited proposal to revise federal renewable fuel mandates, opening a path to a more market-driven increase in ethanol-rich gasoline.

In a discussion draft, Republican Reps. John Shimkus of Illinois and Bill Flores of Texas proposed a national octane standard of at least 95, which could boost demand for ethanol.

They also proposed requiring vehicles built after 2023 to be designed for fuel that contains as much as 20 percent ethanol, or double the percentage now found at most service stations. And EPA rules that restrict some higher-ethanol fuel from sales in the summer could be eliminated, as the draft allows waivers of seasonal restrictions for fuel that’s more than 10 percent ethanol.

But their draft also would hold the mandated levels of conventional biofuels steady at 15 billion gallons a year through 2022, and it would give the EPA administrator authority to set levels from 2023 on.

In a news release, the lawmakers said their proposal takes into account changes in the markets since the RFS was enacted in 2005 and expanded in 2007, incorporating suggestions from stakeholder groups that have worked with their offices for more than a year.

“We have learned from robust stakeholder input through hearings, roundtables and meetings, that higher octane fuels can bring increased fuel economy and performance for next generation engines,” Flores said. “Since ethanol is one of the lowest-cost sources of octane in many areas of the country, a transition from the RFS beginning in 2023 to a national octane specification creates new market opportunities for biofuel producers and gives certainty to refining stakeholders.”

The draft would give EPA 18 months to propose regulations implementing the changes, and three years to finalize them.

Among other details, the draft would require refining facilities built after the law’s expansion in 2007 to produce fuel that achieves at least a 20 percent reduction in life-cycle greenhouse gas emissions.

It hands supporters of woody biomass a victory too, including “trees and tree residue” in the definition of renewable biomass.

Determining levels of renewable fuel in gasoline is among the most sensitive points for the ethanol and petroleum industry, and the draft appears to take some influence from each side of the debate. The 15-billion-gallon level set for conventional biofuels applies through 2022, and a separate rule would govern biomass-based diesel.

Shimkus, whose district includes corn- and soybean-producing farms, said that his “goal was to look beyond just the Renewable Fuel Standard to comprehensively reshape federal transportation fuel policies in a way that could provide more value to consumers and more certainty to industry stakeholders.”

Industry groups have been waiting for the draft’s release for months, and speculation was growing that it might not surface this year. It may also lose much of its political punch next year, as the switch to a Democratic majority in the House costs Shimkus the chairmanship of the Energy and Commerce Committee’s Environment Subcommittee.