Ethanol Debate Has Glimpse of Bipartisanship

Source: By Amy Harder, National Journal • Posted: Thursday, March 28, 2013

The top Republican and Democrat on the House Energy and Commerce Committee are finally on the same page about a controversial energy policy after reading from two completely different playbooks the last four years.

Chairman Fred Upton, R-Mich., and ranking member Henry Waxman, D-Calif., are both undecided about what Congress should do about the renewable-fuels standard, a federal mandate established in 2005 that requires increasingly large amounts of biofuels each year to be blended with gasoline.

“I don’t have an immediate solution. I don’t have the answer,” Upton said in a recent interview in his office. “But we’re going to have thoughtful hearings, first a couple of white papers. We’re going to see where people are. I have confidence that we’ll have a solution by going regular order.”

So will Waxman, who has vehemently disagreed with Upton on everything from the Keystone XL pipeline to greenhouse-gas regulations, be working with him on this? “I’d like to think Henry would be on board,” said Upton, noting the two jointly released the first of a series of white papers on the mandate last week.

In a recent interview in Waxman’s corner office in the Rayburn Office Building, the usually opinionated California liberal was noncommittal. “I’m not going to take a position on this issue,” he said. “I’m looking forward to working with [Upton]. Let’s explore it. Let’s get the options. Let’s get input. And then let’s sit down together.”

The geographical and parochial interests shaping the debate over the biofuels mandate put Waxman and Upton on the same side of one of the most controversial issues Congress is poised to take up this year. The mandate is facing criticism from an informal–and unusual–coalition that includes the American Petroleum Institute, the Grocery Manufacturers Association, the National Chicken Council, and the Natural Resources Defense Council.

While they’re not willing to admit it, both lawmakers seem open to reforming the policy, which has come under intense scrutiny from Republicans and Democrats alike in the wake of last summer’s record-setting drought that sent corn prices souring. Refineries that are required to blend biofuels with gasoline often use corn-produced ethanol to meet the mandate. Apart from providing fuel in the form of ethanol, corn also serves as a key feedstock to the poultry, pork, and cattle industries. More advanced biofuels made from products other than corn are not coming to market as quickly as the 2005 law had envisioned. On top of these concerns, the original intent of the standard—to wean America off foreign oil—has been trumped by the boom in oil and natural-gas production around the country in the last five years.

Waxman’s chief concerns, according to sources knowledgeable about his position, center on the impact corn-based ethanol could have on efforts to tackle global warming. Some reports have found that gasoline blended with corn-based ethanol is no better at reducing greenhouse gas emissions than gasoline alone. He is also aware of the legal liability automakers could incur if engines are unable to run using blends with more ethanol.

Waxman has never been a big fan of corn ethanol. He voted against the energy bill in 2005 that initially created the mandate but supported a 2007 measure that strengthened the mandate’s goal of promoting advanced biofuels such as cellulosic ethanol, which don’t use corn and have lower carbon footprints.

Waxman may also be getting an earful from a powerful opponent of the standard: Chevron. Waxman’s newly redrawn district includes, for the first time since he came to Congress in 1975, a refinery. Chevron bills the facility, located along the coast near the Los Angeles International Airport, as the largest refinery on the West Coast. The facility spans 1,000 acres and employs 1,100 people, according to Chevron’s website. When National Journal Daily asked about the refinery in the interview, Waxman laughed, smiled broadly, and simply said: “Yeah.” He said he hasn’t met (yet) to talk with Chevron about the biofuels mandatey.

“I’m not anti-oil,” Waxman said. “I’m happy there is a refinery in my district that is producing a product that is very much needed. That doesn’t mean I’m going to agree with them on everything.” He quickly added: “We’re going to need fossil fuels for the foreseeable future. I’d like us to start moving away as quickly as possible and make our portfolio of energy resources more than just fossil fuels.”

The background of Upton’s stance on the policy is equally nuanced. Along with 207 other Republicans, he supported the creation of the mandate as part of the 2005 bill and also the measure two years later that strengthened it. Republican President Bush signed both those bills into law.

Sources familiar with Upton’s thoughts on the policy now say the Republican is more inclined to oppose it, given the Republican Party’s growing hostility to federal mandates and the resurgence in oil and natural-gas production that’s helped get the U.S. closer than ever to the elusive goal of energy independence.

Upton has another concern to keep in mind: Ensuring that any movement on the standard doesn’t divide his conference, which is already splintered on a host of other issues. Rep. John Shimkus, R-Ill., who works closely with Upton as the chairman of the House Environment and Energy Subcommittee, is a big proponent of ethanol (Illinois produces the third-highest amount of ethanol in the country). “Yes, I know there are real hard feelings on all sides of the issue: oil and gas side to the corn folks,” Upton said.

For the next couple of months, expect Upton and Waxman to be reading quietly from the same playbook as they roll out white papers on the standard. The real test of how long this bipartisanship will last will come when the hearings—and actual debate—begin in the committee.