Oversight panel to scrutinize EPA, renewable fuel standard

Source: Amanda Peterka, E&E reporter • Posted: Monday, June 3, 2013

Last summer, as drought ate away at the nation’s corn crop, several livestock-state governors petitioned U.S. EPA to waive the federal corn ethanol mandate.

Ethanol, they argued, was driving up the price of corn used for animal feed more than livestock producers could afford. EPA, after a months-long review, declined the petition, saying it had not found evidence of significant economic harm caused by the renewable fuel standard.

That decision, and others EPA has made in carrying out federal biofuel goals over recent months, will come under scrutiny this week at a congressional hearing on the renewable fuel standard. EPA’s Christopher Grundler, director of the Office of Transportation and Air Quality, will testify Wednesday on behalf of the agency at the hearing of the House Oversight Subcommittee on Energy Policy, Health Care and Entitlements.

The hearing comes as EPA faces increasing pressure over all facets of its handling of the renewable fuel standard, through which it mandates yearly levels of conventional ethanol and advanced biofuel that must be blended into the nation’s motor fuel supply.

“This hearing will examine the renewable fuel standard, including the U.S. Environmental Protection Agency’s management of the program and its use of the waiver authority provided to it by Congress,” the subcommittee’s majority staff said in a statement. “The hearing will assess what actions EPA can take to relieve burdens placed on consumers and stakeholders by the renewable fuel standard.”

Grundler will face a tough crowd alongside witnesses from some of the standard’s greatest foes, including American Petroleum Institute President and CEO Jack Gerard and National Turkey Federation President Joel Brandenberger.

Their organizations have called for drastic reform or complete repeal of the standard.

“The RFS has been the major driver in increasing corn use for ethanol production and causing corn stocks to decline to crisis levels,” the National Turkey Federation and several other livestock groups recently told lawmakers. “In a market-driven world, ethanol would be priced competitively with gasoline. That has never been true in the entire history of the industry.”

The Energy Policy Research Foundation Inc. will also have a seat at the witness table Wednesday. The oil industry-backed group last year released a study called “Ethanol’s Lost Promise” that called for a long-term waiver of corn ethanol requirements and warned of an upcoming “blend wall” crisis.

Refiners say they have already reached the blend wall, or the technically feasible level of ethanol that can be used in today’s fuel infrastructure. The fuel standard requires blending of ethanol above that level, a design feature meant to spur investment in next-generation biofuel technologies and encourage higher levels of ethanol in gasoline. Domestic advanced biofuels have taken off more slowly than expected, though, and refiners have objected to higher ethanol blends.

The biofuels industry, which says the standard is necessary to wean the country off foreign oil and promote the rural economy, will not be represented at Wednesday’s hearing.

Schedule: The hearing is Wednesday, June 5, at 10 a.m. in 2154 Rayburn.

Witnesses: Christopher Grundler, director of U.S. EPA’s Office of Transportation and Air Quality; Jack Gerard, president and CEO of the American Petroleum Institute; Lucian Pugliaresi, president of the Energy Policy Research Foundation Inc.; and Joel Brandenberger, president of the National Turkey Federation.