Lobbyists to hit Hill for 2-day slugfest over RFS

Source: Amanda Peterka, E&E reporter • Posted: Monday, July 22, 2013

Just about every sector of the economy with a stake in the future of the renewable fuel standard will be on Capitol Hill this week for the main event of a months-long examination of the biofuel mandate.

Representatives from the oil, livestock, auto and food industries, as well as environmentalists, will have a seat next to the biofuel industry’s most ardent supporters in what promises to be a two-day slugfest over whether the five-year standard should be repealed or reformed. In all, 16 witnesses are scheduled to testify at the hearing held by the House Energy and Commerce Committee’s subpanel on Energy and Power.

“The renewable fuel standard is a broad and complex statute that affects several different sectors of our economy,” Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) said ahead of the hearing. “I’ve met with stakeholders on all sides of the issue, and I believe now is the time to take an in-depth look at the RFS and compare our original expectations for the program with the actual experience.”

Over the last several months, Energy and Commerce panel leaders have collected feedback from the same stakeholders to a series of white papers on the standard, which sets increasing yearly levels of conventional ethanol and advanced biofuels that refiners must add to the nation’s motor fuel supply. The standard calls for 36 billion gallons of biofuels a year by 2022 and creates a credit-trading system to help refiners meet its goals.

Since last year’s drought in the nation’s major corn-producing regions, though, the standard has been the subject of an increasingly noisy debate inside the Beltway over whether it still is feasible given reduced gasoline demand, high renewable fuel credit prices, the slower-than-expected rollout of cellulosic biofuels and the use of corn for ethanol.

Lawmakers have filed bills in both the House and Senate to completely repeal the statute, while several other pieces of legislation propose various changes.

At the Energy and Power Subcommittee’s first hearing this year on the renewable fuel standard late last month, lawmakers grilled representatives from U.S. EPA, the Department of Agriculture and the Energy Information Administration (E&E Daily, June 27).

This week, the witnesses will be organized into three panels and spread out over Tuesday and Wednesday. The hearing will kick off with a list featuring some of D.C.’s most powerful lobbyists, including American Petroleum Institute President Jack Gerard and Renewable Fuels Association President and CEO Bob Dinneen.

The American Petroleum Institute had made its position clear: The renewable fuel standard is beyond salvaging.

“Let’s get right to the point,” Gerard said at a recent appearance in front of a separate congressional panel. “The renewable fuel standard is irreparably broken and poised to do significant harm to consumers, the economy and the nation’s fuel supply. The impact of the mandate has been made worse by EPA’s unwillingness to let science, court decisions and common sense guide its implementation.”

Supporters of the standard have dismissed the petroleum industry’s arguments as an attempt to maintain its grip on the monopoly of the motor fuel market. They’re likely to argue that the standard has increased the nation’s energy independence, decreased greenhouse gas emissions and built up rural economies.

“We can’t let the oil industry continue to dictate what we pay at the pump, erecting barriers in the free market and blocking renewable fuel options,” Tom Buis, CEO of ethanol trade group Growth Energy, said recently; Buis will testify at the hearing’s second panel. “It’s time we have a choice. It’s time we have renewable fuels as a solution to high gas prices, and to end oil’s control of our fuel supply.”

Second-generation biofuel producers will be represented at the hearing by Michael McAdams, president of the Advanced Biofuels Association. While advanced producers and conventional ethanol producers agree that the renewable fuel standard is vital for their industry, they’ve publicly split in opinion this year over whether EPA should have reduced its overall advanced targets because of the delays in scaling up cellulosic fuels, or those made from plant-based materials like agricultural residue, switchgrass and municipal solid waste.

Opposition to the standard extends well beyond the oil industry.

Chain restaurants say the increase in corn prices associated with the standard has translated into thousands of dollars’ worth of extra costs for individual restaurants, while livestock producers say high prices have hurt their ability to purchase feed. Automakers say EPA’s decision to increase the amount of ethanol allowed in gasoline from 10 percent to 15 percent puts consumers at risk of voiding their warranties.

Environmentalists complain that corn ethanol has not reduced greenhouse gas emissions and has contributed to the widespread conversion of native grassland across the country to cornfields.

“The RFS is creating too much bad biofuel and not enough good biofuel,” said Heather White, Environmental Working Group’s executive director, at a Capitol Hill event Thursday. EWG’s vice president of government affairs, Scott Faber, will testify this week.

Environmentalists, though, say maintaining the integrity of the Clean Air Act — where the renewable fuel standard is housed — is of the utmost priority and are hesitant about opening it up for revision in areas unrelated to the standard.

Schedule: The first part of the hearing is Tuesday, July 23, at 10 a.m. in 2123 Rayburn.

Witnesses: Jack Gerard, president and CEO of the American Petroleum Institute; Charles Drevna, president of American Fuel & Petrochemical Manufacturers; Bob Dinneen, president and CEO of the Renewable Fuels Association; Michael McAdams, president of the Advanced Biofuels Association; Jeremy Martin, senior scientist in the clean vehicles program at the Union of Concerned Scientists; Tom Buis, CEO of Growth Energy; Shane Karr, vice president of federal government affairs at the Alliance of Automobile Manufacturers; Todd Teske, chairman and CEO of Briggs & Stratton Corp.; Robert Darbelnet, president and CEO of AAA; Joseph Petrowski, CEO of the Cumberland Gulf Group, on behalf of the Society of Independent Gasoline Marketers of America and National Association of Convenience Stores; and Joe Jobe, CEO of the National Biodiesel Board.

Schedule: The second part of the hearing is Wednesday, July 24, at 1:30 p.m. in 2123 Rayburn.

Witnesses: Pam Johnson, president of the National Corn Growers Association; Bill Roenigk, senior vice president at the National Chicken Council; Ed Anderson, CEO of Wen-Gap LLC on behalf of the National Council of Chain Restaurants; Scott Faber, vice president of government affairs at Environmental Working Group; and Chris Hurt, professor of agricultural economics at Purdue University.