Fear and loathing on Hill as Senate RFS group ramps up

Source: Amanda Peterka, E&E reporter • Posted: Sunday, June 3, 2012

On its face, the new bipartisan Senate study group on the renewable fuel standard is simple and straightforward enough.

Its organizers, Oklahoma Republican James Inhofe and Delaware Democrat Chris Coons, are said to be interested in bringing in experts to weigh in on the effectiveness of the RFS, which sets mandated goals for U.S. biofuel production.

But nothing about biofuels in Washington, D.C., is simple.

Interest groups from all sides have a lot of money and influence at stake, and every move by lawmakers and regulatory agencies comes with public outcry and behind-the-scenes political intrigue.

The Biofuels Investment and RFS Market Congressional Study Group is no exception. Though it exists only on paper, it is already sending shock waves through the corn ethanol industry, which sees it as an attack orchestrated by petroleum interests, livestock groups and some environmentalists.

“We are absolutely sensing that opponents are mobilizing their forces,” said Brian Jennings, executive vice president of the American Coalition on Ethanol.

But Stephen Brown, a lobbyist for oil refiner Tesoro Corp., said the group is merely an answer to Senate Environment and Public Works Chairwoman Barbara Boxer’s refusal to hold hearings on the RFS.

Several groups, mostly opponents of the standard, last fall sent Boxer (D-Calif.) and ranking member Inhofe letters requesting hearings on the mandate, which requires U.S. production of 36 billion gallons of biofuels by 2022, with 15 billion gallons coming from corn ethanol. The requests came from livestock trade groups, the environmental group Friends of the Earth, tax reform groups and limited-government advocates, among others (Greenwire, Dec. 7, 2011).

Several lawmakers last year also offered legislation that would open up the standard to new forms of biofuel, including natural-gas-derived fuel, or put a hold on the standard should corn supplies fall below a certain level.

“We’re all frustrated with Chairman Boxer’s refusal to schedule any kind of committee review, evaluation, hearing on the RFS,” Brown said in an interview. “I think I understand why she’s doing that. She doesn’t want to open up another front to defend [U.S.] EPA on.”

Boxer’s office did not respond to a request for comment.

Boxer has been a staunch defender of the RFS, which she voted for in 2007; Inhofe voted against the legislation. According to a spokesman for a biofuels company, Boxer staff members say the senator is looking for ways to get EPA to act more quickly on the standard to help open the market for cellulosic biofuel.

“She thinks EPA is moving too slowly,” said the company spokesman, who requested anonymity due to the issue’s political sensitivity.

But the ethanol industry’s Jennings said that until he is “convinced otherwise,” he does not trust a congressional memo that says the group has no intention of drafting a bill to undo part of the RFS.

“The tone of the memo, the two leading congressional offices, the constituencies that they are most influenced by all point to this as being one of those exercises,” he said. “If in Washington, if you’re not at the table you’re on the menu.”

‘Paranoid’

According to one representative from an oil company, several trade groups worked with Inhofe and Coons to come up with the idea for the study group.

The group plans to host briefings on the RFS, its contribution to reduced use of petroleum in the transportation sector and how it has affected commodity prices, according to the memo obtained by Greenwire (Greenwire, May 31).

The group also plans to explore fraud in the renewable fuel credit-trading market, biofuels’ contributions to greenhouse gas emissions reductions, infrastructure challenges in the marketplace and investments in biofuels.

Briefings will feature both proponents and opponents of the RFS — but nobody from the corn ethanol industry.

Tesoro’s Brown said the corn ethanol industry was being “paranoid.” The time was ripe, he said, to evaluate how the standard has worked over the past five years.

“They seem to think all these folks are getting together with the idea of slicing the tires of the RFS,” he said. “A lot of others aren’t. They’re interested in tweaking or reforming the RFS.”

A representative from the advanced biofuels industry, on the other hand, said that while he was worried about attacks on the renewable fuel standard, he wasn’t so much worried that the study group would put forth any kind of RFS bill.

The representative, who also wished to keep his name out of the discussion, said the study group idea was sparked because the lawmakers — there are 16 involved — were tired of stakeholder groups “beating their doors down.”

But most of the senators involved, he said, “believe the RFS is a fundamental policy. Most of the people who have been named all support the RFS in some way, shape or form.”

The corn ethanol industry, he added, is angry “because they didn’t get invited.”

Friends of the Earth, which was not involved in the formation of the study group, is “happy that the Senate is taking leadership to review the RFS,” said Michal Rosenoer, the group’s biofuels policy campaigner.

“I think the corn ethanol industry of course is worried — the RFS is a de facto mandate for corn ethanol,” she said. “But it’s not just about corn ethanol anymore. As people become disillusioned with corn ethanol, there’s a growing interest in advanced biofuels — but there are a lot of dangers in advanced biofuels, too.”

Several industry insiders have referred to an “unholy alliance” of environmentalists, the oil industry and livestock groups whose singular goal is to tear down the RFS. Rosenoer disputed rumors on the Hill that the groups are in a coordinated coalition to bring it down.

 

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