RFS opponents like chances for reform next year

Source: Amanda Peterka, E&E reporter • Posted: Thursday, July 17, 2014

The window is all but closed to pass legislation this year to reform the renewable fuel standard, but a strange-bedfellow coalition opposed to the policy is optimistic about next Congress.

Advocates representing oil, livestock, restaurant, motorcycle, anti-poverty and environmental groups yesterday said they think they have a good chance to succeed in their efforts to reform the RFS next Congress regardless of the results of the midterm elections.

If U.S. EPA ends up backtracking at all on a proposal to cut the corn ethanol mandate for this year, as it is widely expected to do later this summer, the case for reform will be even stronger, said Scott Faber, vice president for government affairs at the Environmental Working Group.

“If the administration were to increase the amount of corn ethanol, they would be blatantly contradicting their own climate policy and doing more to create more momentum for reform” than anything outside lobbyists could do, Faber said.

The renewable fuel standard put into place by Congress in 2007 requires that an increasing level of ethanol and advanced biofuels be blended into petroleum fuel each year, but it gave EPA the authority to waive those targets under certain conditions. The original goal of the standard was 36 billion gallons of biofuels by 2022, though that target has long been considered infeasible.

Early this session, members of Congress showed a strong appetite for addressing what many constituencies have deemed the fatal flaw of the standard: that it requires oil refiners to put more ethanol in petroleum fuel than is technically feasible.

The House Energy and Commerce Committee last year launched a white paper process, soliciting input from both opponents and supporters of the policy and held hearings on the standard with the goal of drafting a comprehensive reform bill. Separately, several lawmakers in the House and Senate introduced legislation to reform or repeal the standard.

Those efforts hit a wall last fall with the release of a proposal by EPA to reduce the targets for ethanol and advanced biofuels for the first time ever. The agency proposed to require 16 percent less biofuel than the level laid out by statute for 2014.

Lobbyists opposed to the RFS have continued to press for changes or repeal, but those efforts have little chance of going anywhere until EPA releases its long-delayed final targets for the year. By the time it does, lawmakers will likely be wrapped up in election politics and not keen on taking up legislation.

“I think we have a narrow closing window to do anything this year. It’s going to be a challenge,” said Bob Greco, head of downstream activities at the American Petroleum Institute. “That’s why I think much of the focus is on the regulatory rulemaking right now.”

But members of the anti-RFS coalition said next year seems promising. The coalition says it has counted 218 House members — enough for a majority — who are on the record calling for either reform or repeal of the standard.

“The numbers simply are on our side,” said Faber, whose group is opposed to a mandate for corn ethanol because it says corn ethanol increases greenhouse gas emissions.

The coalition said it was not concerned about which political party takes control of the Senate next year because the issue of biofuels tends to be more regional than party-based.

Scott Vinson, vice president at the National Council of Chain Restaurants, said, though, that the prevalence of the tea party in Congress could help out the case for reform.

“From a purely political perspective, at least in the Republican Party, there’s this tea-party strain where there’s less enthusiasm for government mandates, picking winners and losers,” Vinson said.

Wayne Allard, a former senator and current vice president for government relations at the American Motorcyclist Association, said he sensed that some members who voted for the RFS in 2007 have grown tired of it being a political tug of war each year.

EPA’s proposal for this year has been widely viewed as a political decision, rather than a regulatory one.

“I know that some members voted for it with the understanding that it would be out of the political arena and that it would be handled in the regulatory arena. And it ended up being more political,” said Allard, whose group is worried that adding more ethanol to gasoline will damage motorcycle engines.

Still, the biofuels industry has strong supporters in the Midwest, where corn reigns king, and in some other places in the country where companies are attempting to commercialize advanced biofuels using technologies involving plant-based materials and algae.

Supporters say the RFS has increased the nation’s energy independence, helped revitalize rural economies and lowered greenhouse gas emissions.

Getting the advanced biofuels sector on board with a reform effort could be key for passing a revamp into law, members of the coalition said. The sector has not been subject to the same level of criticism as corn ethanol and provides ways to get around limits to the amount of ethanol that can be blended into gasoline.

“I think the advanced biofuel players are engaged, should be engaged and have a position that needs to be heard at the table,” Greco said. “Ultimately, they will have a role to play in reform efforts going forward.”