Ethanol mandate in hot water on Capitol Hill

Source: Amanda Peterka, E&E reporter • Posted: Thursday, June 6, 2013

A highly politicized and complex fight over the federal renewable fuel standard and U.S. EPA’s authority in carrying out its requirements is underway in Congress.

The extent to which federal officials should be mandating biofuel production to reduce foreign oil dependence is at the heart of the debate. The renewable fuel standard, first passed into law in 2005 and revised in 2007, calls for 36 billion gallons of conventional ethanol and advanced biofuel production by 2022.

A congressional hearing yesterday on EPA’s role in enforcing the targets brought a packed room of lobbyists and touched off a firestorm of back-and-forth messaging between interest groups with a stake in whether the standard exists. An EPA official found himself under the microscope over the agency’s decisions on waiving the standard’s requirements.

The big battles over the standard are yet to come. The hearing of the House Oversight and Government Reform Subcommittee on Energy Policy, Health Care and Entitlements served largely as a warmup for a series of hearings to be held later this summer by the House Energy and Commerce Committee, the congressional panel that has jurisdiction over renewable fuels.

Through the standard, EPA each year sets levels of corn ethanol and advanced biofuel that must be blended into the nation’s motor fuel supply. This year, refiners must blend 13.8 billion gallons of corn ethanol; the agency has proposed a target of 2.75 billion gallons of advanced biofuel, though the proposal is not yet finalized.

Support for the standard among lawmakers is nuanced and largely dependent on the size of the ethanol industry in their home states. As a general rule, Midwestern lawmakers tend to largely support it, while lawmakers from heavy oil refining and livestock states are calling for its repeal or reform.

The hearing yesterday centered mostly on EPA’s authority to waive the yearly requirements for renewable fuel and whether ethanol is causing “severe harm” to the nation.

As the drought gripped the nation’s major corn-producing regions last summer, several livestock-state governors called on EPA to waive the corn ethanol requirement. EPA, after a months-long review, declined the petition, saying it had not found evidence of economic harm caused by the renewable fuel standard. The agency kept in place the requirement that refiners blend 13.2 billion gallons of corn ethanol into the nation’s motor fuel supply or purchase credits to make up the difference.

Christopher Grundler, director of EPA’s Office of Transportation and Air Quality, faced a barrage of questions from Rep. Jim Jordan (R-Ohio) yesterday over the agency’s decision. Jordan said he was concerned that EPA did not have a standard definition of the word “severe” and made its decision subjectively.

“If you have no objective standard, how can you make a decision?” Jordan said.

Grundler said that there was no “hard and fast definition” to waiving the standard’s requirements and that the decision amounted to a judgment call by the agency. He defended the agency’s work by arguing that EPA has used its authority to lower the requirements for cellulosic biofuel, or fuel made from plant-based materials like switch grass, agricultural residue and municipal solid waste.

“We’re hearing this loud and clear,” Grundler said.

EPA, he said, has been meeting with stakeholders and is taking into consideration their comments for the final 2013 standard. EPA this summer will both finalize its 2013 biofuel targets and propose new ones for 2014, Grundler said.

“The way we’ll approach this decision — I hope we’ll use common sense. What does the law say, what does the science say, and what is the best thing to do?” Grundler said.

Grundler found himself in the spotlight for about 40 minutes. The subcommittee spent a much longer time questioning a separate panel of witnesses that consisted of well-known foes of the renewable fuel standard, including the leaders of the American Petroleum Institute, the National Turkey Federation and the Energy Policy Research Foundation Inc.

The witnesses called on EPA to use its authority to waive the standard’s requirements. Failing that, they called on Congress to either repeal or drastically overhaul the standard.

“While I am sure the decisionmakers at the time had good intentions to develop a policy that did not pick winners or losers or adversely hurt other industries intentionally, the fact is it has done all these things,” said Joel Brandenberger, president of the National Turkey Federation, whose members claim the RFS is driving up the price of livestock feed.

Jeremy Martin, a scientist with the Union of Concerned Scientists, was the only panel member to urge lawmakers to keep the standard in place, citing its built-in flexibility. The RFS, Martin said, is driving investment in the next generation of biofuels that does not use corn as an input. The “smart approach,” Martin said, is for EPA to limit food-based biofuels only.

Biofuels industry representatives, who were not represented on the panel, slammed the hearing as one-sided.

“Today’s hearing is nothing more than a forum for those with a vested interest in not wanting to see our nation adopt an alternative to a fossil-based fuel,” ethanol trade group Growth Energy said in a statement. “Instead of finding solutions to gas prices, all it accomplishes is giving a microphone for special interests to deny consumers a cost-saving choice at the pump.”