House panel takes up bill to revamp ethanol mandates

Source: By Marc Heller, E&E News reporter • Posted: Tuesday, December 4, 2018

Rep. John Shimkus’ draft bill to revamp ethanol mandates will receive its first hearing in the House this week, as the lawmaker prepares to give up his subcommittee chairmanship in the new year.

Shimkus (R-Ill.), head of the Energy and Commerce Subcommittee on Environment, released the long-awaited discussion draft last month, proposing a national octane standard that he said will help create demand for renewable fuel outside of the volumes the government has required through the renewable fuel standard.

In a hearing notice, Shimkus called the draft “the culmination of three stakeholder roundtables, five subcommittee hearings, and numerous other meetings.”

But the idea hasn’t gained much support from ethanol industry groups, which said it would weaken the RFS too much for a new octane standard to do much good.

Ethanol is higher in octane than gasoline, and Shimkus has said setting an octane standard for the next generation of vehicles could foster a more market-based demand for ethanol while giving greater certainty to industries affected by fuel policies.

In a statement, he said the proposal would provide a transition from the RFS — for which a congressionally set volume would end after 2023 — and remove barriers that limit consumer choice.

After 2023, renewable fuel levels would be up to EPA. The octane standard would be set at at least 95.

Shimkus called the measure the “21st Century Transportation Fuels Act,” which he introduced with Rep. Bill Flores (R-Texas). He said he hopes it sets the stage for discussions in the next session of Congress.

The bill would require vehicles built after 2023 to be designed to run on fuel that contains up to 20 percent ethanol.

The idea of a national octane standard doesn’t have universal support. Critics of the RFS, in the oil and gas industry, have said it may be a way to ease out the RFS, a goal the ethanol industry rejects.

Growth Energy, an ethanol industry group, said any renewable fuel solution should preserve the RFS while also boosting demand for octane.

“It is only through coupling a stable Renewable Fuel Standard with improvements to octane standards that consumers can continue to reap the increased engine efficiency, environmental benefits and cost savings that ethanol provides,” Growth Energy CEO Emily Skor said in a statement.

An energy lobbyist at Bracewell LLP, Scott Segal, said the need for ethanol is likely to remain high because of demand for clean sources of octane, regardless of the RFS.

Congress has a chance to make meaningful changes to the RFS as mandatory increases in volume wind down, Segal said. “Legislation is always difficult. That said, divided government often creates the conditions for action on controversial environmental topics.”

Schedule: The hearing is Wednesday, Dec. 5, at 10 a.m. in 2123 Rayburn.

Witnesses: TBA.