Rand Paul finds a biofuels proposal he can get behind

Source: By BURGESS EVERETT and DARREN GOODE, Politico • Posted: Thursday, April 2, 2015

As he prepares to launch his presidential campaign next week, Rand Paul is looking to broaden his appeal to Iowa’s homegrown biofuel industry by co-sponsoring an ethanol-friendly bill with the state’s popular senior senator, Chuck Grassley.

Backing the measure gives Paul a way to appeal to Iowa’s alternative energy sector, while not compromising his free-market ideology when he barnstorms the state next week as part of his expected presidential kick-off.

Paul’s bill would make it easier to increase the amount of ethanol blended into vehicle fuel. Current Environmental Protection Agency rules impose a 10 percent limit on the amount of ethanol that can be mixed into fuel during the summertime. Paul’s change is backed by key renewable fuel interest groups.

Alternative energy is a tricky issue in Iowa, where Grassley has long advocated legislation offering tax breaks for wind power and encouraging the sale of ethanol. Republican presidential hopefuls have to thread the needle between appealing to the critical caucus state’s energy producers while also attempting to appease a conservative base that opposes government intervention in the energy sector.

Paul and Grassley’s bill would allow truck fleets to be converted more easily to run on ethanol blends, permanently extend a tax credit for manufacturers of alternative fuel vehicles, lower taxes on liquid natural gas and, most importantly for Iowans, allow a fuel blend of 15 percent ethanol to be sold year-round.

Paul has been critical of government regulations that dictate what fuels are sold, including the Renewable Fuel Standard, a law Congress created in 2005 and expanded in 2007 that’s intended to gradually incorporate more alternative fuels into gasoline blends.

Paul said his new proposal is a way to get around the “EPA’s onerous regulation of fuels.”

“Sen. Paul supports removing regulatory barriers to the use of ethanol and other renewable fuels, which would likely have the effect of growing the use of these environmentally friendly fuels. He does not support the government telling consumers or businesses what type of fuel they must use or sell,” an aide said on Wednesday.

Some would like Paul to go further. Although the Renewable Fuels Association, a major energy player in D.C., supports Paul’s bill, it still wants the federal government to stand fully behind the RFS and not water it down or repeal it.

“We applaud and support his effort. Without it, refiners will continue to deny gasoline marketers the specially tailored blendstocks they would need to sell E15 in the summer months,” said Bob Dinneen, head of the Renewable Fuels Association. “However, the most important means of assuring fuel choice for consumers would be the successful implementation of the RFS as intended by a bipartisan Congress in 2007.”

Co-sponsoring the bill does more than just cater to an important early presidential state. It also feeds into Paul’s free-market and anti-EPA sensibilities while tackling what is the next important priority for the state’s biofuels industry after the RFS.

Paul’s attempts to balance his distaste for a broad, government-imposed fuel mandate with an important parochial issue for Iowa is being closely watched by the state’s energy industry.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, said he is encouraged by the bill but made clear that “we don’t view this issue as a substitute” for a candidate’s view of the Renewable Fuel Standard.

“It’s fair to say that on some of Sen. Paul’s trips to Iowa he’s heard about this issue,” Shaw said. RFS will “probably be the make or break issue on how the industry ultimately would view a potential presidential candidate.”

It certainly doesn’t hurt Paul’s alternative fuel cred in Iowa considering the bill’s sole co-sponsor is Grassley, the state’s senior senator, who will be much in demand for presidential counsel over the next year. According to a source familiar with the matter, Paul approached Grassley in the past few weeks with suggestions about how to get more alternative fuels in the market. The senior Iowa senator liked what he heard and agreed to work with Paul.

In a joint release on Tuesday, Grassley praised Paul for leading introduction of a bill that would override the EPA and allow sales of a fuel that is 15 percent ethanol, year-round.

“Those of us who live in biofuels-producing states like Iowa understand the appeal of cleaner, domestic, renewable fuels,” Grassley said. “The EPA has never acted on its authority to grant a waiver for E15. This bill proposes a legislative fix to fill the void.”

While his support for Paul’s bill is a strong statement in support of the Kentuckian, Grassley has not indicated a favorite in the presidential race. New Jersey Gov. Chris Christie is holding a fundraiser for Grassley in June, and Christie said he “absolutely” backs the Renewable Fuel Standard.

The bill was introduced on Thursday before the Senate went into recess and will be considered by the Senate Finance Committee chaired by Sen. Orrin Hatch (R-Utah), who in the past has called on the EPA to kill the Renewable Fuel Standard’s ethanol mandate.