‘Parochial’ concerns muddy debate over high-ethanol fuel

Source: Marc Heller, E&E News reporter • Posted: Thursday, June 15, 2017

The outlook for expanding the use of higher-ethanol fuel may have grown cloudier after a divided Senate Environment and Public Works Committee tackled the issue at a hearing yesterday.

The hearing — long-sought by advocates of E15 fuel — revealed the split on the panel, where corn-state lawmakers want expanded ethanol markets and Chairman John Barrasso (R-Wyo.) and oil-state senators are fighting against it.

Ethanol advocates such as Sen. Deb Fischer (R-Neb.) are pressing legislation to allow year-round sales of E15, which is 15 percent ethanol and 85 percent gasoline. In most of the country, U.S. EPA regulations don’t allow E15 to be sold from June to September due to ozone considerations.

With the prospects already unclear, Sen. Tom Carper (D-Del.) threw a new wrinkle into the debate, saying he’d vote to keep seasonal restrictions in place on E15 unless the committee also considers changes in the market for renewable fuel credits — a big expense for fuel refiners in his state.

“My concern is more of a parochial concern,” Carper told reporters after the hearing, citing lack of transparency in the market for renewable fuel credits, also known as renewable identification numbers. “If we don’t address the concern I’ve raised in respect to RINs, I could not support the bill as it is.”

Barrasso, who called the hearing in a deal with E15 supporters, made clear he’s not eager to see Fischer’s legislation advance.

“In Wyoming, people want fuel with less ethanol, not more ethanol,” Barrasso said.

Senators heard from industry witnesses, both opposed to and in favor of E15, as well as from an engineer who said the difference between E10 and E15 for air pollution is small or negligible.

Whether the committee will mark up the bill, S. 517, soon remains unclear. Barrasso didn’t mention any specific plan to vote on a bill he opposes, and a spokesman said the timing of any consideration hasn’t been set.

Lobbyists following the issue said they had been led to believe a markup was possible in July, as part of the deal Republican leaders made last month with corn-state senators: Vote for a relaxation of methane regulations, and the committee will move on E15. The methane measure failed, but Barrasso’s promise remained.

Industry witnesses made familiar cases for or against E15, echoing a public relations campaign that has heated up in recent weeks.

The president and CEO of Briggs & Stratton Corp. of Milwaukee, Todd Teske, blamed ethanol for damaging small engines the company makes and warned that consumers whose cars aren’t designed for high ethanol could easily misfuel despite warnings on pumps.

“We don’t think a label is going to make a difference,” Teske said.

That position brought a rebuke from Sen. Joni Ernst (R-Iowa).

“To me, that’s not trusting our consumers,” Ernst said. “I think we need to trust our consumers.”

On the other side, Brooke Coleman, executive director of the Advanced Biofuels Business Council, told senators that relaxing restrictions on E15 would also spur markets for ethanol made from sources other than corn, which still dominates the industry.

Lenders will be more willing to finance cellulosic ethanol projects, and the increased demand for the fuel will address Carper’s concerns, Coleman testified.

“It’ll give ethanol a place to go, and RIN prices will come down,” Coleman said.

The hearing illustrated conflicting information lawmakers are receiving about the benefits and pitfalls of E15, especially around its carbon footprint and effect on atmospheric ozone. Advocates cite studies showing that E15 has lower volatility than E10, even though only E10 receives the seasonal waiver from ozone-related restrictions.

And in some cases, Coleman said, the advanced biofuels his organization promotes actually reduce carbon, while burning gasoline contributes it.

“Some of our fuels are carbon sinks,” Coleman said.

Some of the battle lines on the committee have already been clear, with Barrasso and Sen. Jim Inhofe (R-Okla.), a former EPW chairman, long opposed to expanding ethanol, for instance. While proponents say Congress should consider more evenhanded treatment of E15 as a consumer choice issue separate from the renewable fuel standard, Inhofe said they ride hand in hand.

“The bill is more than a technical fix,” he said.

Prospects for Fischer’s bill — both in the committee and in the full Senate — may rest on advocates’ ability to separate it from the bigger RFS debate, say lobbyists working on the issue. Senators vying for changes to the RFS may see E15 as a point of leverage that they would lose if Congress passes Fischer’s bill separately.

Barrasso linked the issues in explaining his opposition.

“The RFS is broken, and EPA is not in a position to fix it,” he said.