Lawmakers, advocates keep pressure for higher blends

Source: Marc Heller, E&E News reporter • Posted: Wednesday, August 2, 2017

Pro-ethanol lawmakers are keeping pressure on the Senate Environment and Public Works Committee — and on U.S. EPA — to allow for expanded sales of higher-ethanol fuel, Sen. Joni Ernst (R-Iowa) said yesterday.

Ernst told reporters after testifying at an EPA hearing on proposed 2018 renewable fuel volumes that she hasn’t given up on the push to allow year-round sales of fuel that’s 15 percent ethanol, up from the 10 percent blend now common.

That effort faces obstacles, including opposition from EPW Chairman John Barrasso (R-Wyo.) and other panel members, and a reluctance from EPA to step in on its own, Ernst acknowledged.

A proposed markup of legislation, S. 517, to waive the season restrictions on so-called E15 fizzled last month (E&E Daily, July 20).

“We are in a holding pattern right now. We are trying to push friends and allies to join us in this effort,” Ernst said.

“If we can gain a little more support from our friends across the aisle, we might be able to move the bill,” she said, “but we need a very strong signal going to Chairman Barrasso that it is the right thing to do.”

The battle around E15 played into some of the comments EPA officials heard at the public meeting. Ernst told agency officials that renewable fuels are critical to her state’s economy and that she was disappointed EPA proposed reducing the minimum level for advanced biofuel.

Ernst and other senators, including Sen. Deb Fischer (R-Neb.), fell short in pressing for a markup of E15 legislation in July, after the bill failed to garner enough support to pass.

Fischer, the lead sponsor, had secured a promise from Barrasso to take it up. But ranking Democrat Sen. Tom Carper of Delaware also expressed skepticism, saying he wanted to see changes to the system of renewable fuels credits before supporting expansion of E15.

EPA proposed rule

While the debate plays out on Capitol Hill, supporters and critics of biofuel mandates are pulling EPA in opposite directions on the renewable fuel standard.

Overall, EPA has proposed 19.24 billion gallons of renewable fuel for 2018, a slight decrease from 19.28 billion gallons this year.

Advanced biofuel would fall from 4.28 billion gallons to 4.24 billion gallons, and conventional biofuel would remain at the congressionally mandated level of 15 billion gallons, EPA said.

In its proposed rule, EPA said that it believes the 15-billion-gallon goal for conventional biofuel is reasonably attainable but that levels beyond 4.24 billion gallons for advanced biofuels aren’t.

That’s mainly because cellulosic ethanol continues to lag far behind the production Congress envisioned when it enacted the renewable fuels law in 2005 and updated it in 2007.

The RFS law requires 7 billion gallons of cellulosic ethanol in 2018, although it gives EPA authority to waive that requirement. Actual production will be a small fraction of that, totaling 238 million gallons next year, the agency predicted.

EPA’s proposal to cut the advanced biofuel volume drew criticism from several industry groups yesterday, as well as from the Republican governors of Iowa and Nebraska, who also testified.

Among their objections, they said, was that setting a lower target would send a negative signal to markets and possibly hurt producers’ ability to finance projects.

Iowa Gov. Kim Reynolds (R) asked EPA to boost the advanced biofuels requirement to 4.75 billion gallons when the agency publishes a final rule later this year.

Nebraska Gov. Pete Ricketts (R) asked the agency to take another look at the requirement and urged officials to put out a final rule on time.

Delays during the Obama administration for 2014, 2015 and 2016 were widely criticized by both ethanol supporters and critics for injecting uncertainty into fuel markets.

‘Rule of law’

A campaign to scale back the RFS back hasn’t gone far. And both critics and supporters are looking to the Trump administration to take up their cause.

EPA Administrator Scott Pruitt was critical of the RFS as attorney general in Oklahoma, but President Trump has made comments supportive of ethanol as part of the nation’s mix of fuels.

Ricketts told reporters he believes that the administration will continue to support biofuels and that Pruitt, with whom he has met at least three times this year, won’t stand in the way.

“Administrator Pruitt understands the rule of law,” Ricketts said. “He understands that the RFS was set by congressional intent. If you want to change that, you have to go back to Congress and change it.”

Yesterday’s hearing unleashed the usual volley of opposing views from oil and gas interests and ethanol supporters. Lori Sanders, associate vice president for federal affairs with the R Street Institute, a conservative think tank, said the growth of corn ethanol under the RFS has had “disastrous unintended consequences.”

She pointed to pollution of land and waterways. Sanders also said the RFS advanced “powerful agricultural lobbies at the expense of refiners.”

Ethanol advocates said renewable fuels have been cleaner for the air. The president and CEO of the Renewable Fuels Association, Bob Dinneen, called the RFS an “incredible success story” and said EPA erred on the side of pessimism about cellulosic ethanol’s potential.

The hearing process itself wasn’t immune from skepticism. Steven Allen, vice president and chief investigative officer of Capital Research Center, a conservative think tank, said the RFS bears “all the usual” shortcomings of government mandates, including hidden taxes, regulatory burdens and a public comment process that’s built for well-organized interest groups.

“It’s not exactly grass-roots America,” Allen said.