House Energy Committee chairman: Biofuel-blending system ‘cannot stand’

Source: By Zack Colman - 07/23/13 01:58 PM ET, The • Posted: Wednesday, July 24, 2013

A legislative push to change a federal biofuel-blending rule may be nearing full throttle, as House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) said Tuesday that the “current system cannot stand.”

Upton made the comment at the opening of a two-day Energy and Power subcommittee hearing on the Renewable Fuel Standard (RFS), which has come under fire from lawmakers on both sides of the aisle. It raises the possibility that the House could move on legislation to tweak the rule.

“I hope we can start a discussion that considers a host of potential modifications and updates to the RFS, with the end goal being a system that works best for the American people,” Upton said, according to prepared remarks.

Upton’s remarks come one week after his Senate counterpart, Energy and Natural Resources Committee Chairman Ron Wyden (D-Ore.), voiced concerns about whether the mandate’s goals can be met.

The rule, created by a 2005 law and expanded two years later, requires refiners to blend 36 billion gallons of biofuel into conventional petroleum by 2022.

The rancor between biofuel supporters and its detractors in the oil industry, environmental community and food business has grown more acute in recent weeks as Capitol Hill interest intensifies.

The oil industry is gunning for a full repeal of the rule — but that appears unlikely, due to a bloc of biofuel-friendly Midwest and rural lawmakers.

More targeted changes, however, are a safer bet with Upton, and maybe Wyden, on board.

The escalating battle has spawned dueling advertising campaigns designed to win the votes of lawmakers in both chambers, as well as secure backing from the public.

The biofuel industry contends the Environmental Protection Agency, which administers the mandate, has plenty of flexibility to address detractors’ concerns. They also warn that alterations to the rule will scare off investment in next-generation biofuels that are starting to come online — though they’re still behind projections made when Congress updated the mandate in 2007.

Opponents say the mandate forces refiners to buy credits to meet targets for next-generation biofuels that haven’t reached commercial scale. They’ve also warned refiners are approaching a “blend wall,” requiring them to churn out fuel mixes with a higher ethanol concentration that many gas stations don’t have the infrastructure to support.

Environmental groups also have sought changes, contending corn ethanol — which dominates the current biofuel market — raises food prices and doesn’t cut greenhouse gas emissions.