RFS rollback the ‘wrong call’ — Democratic senators

Source: Amanda Peterka, E&E reporter • Posted: Friday, May 16, 2014

A group of Democratic senators yesterday charged that U.S. EPA made a mistake in proposing to reduce the nation’s biofuel blending mandates for this year.

Led by Sen. Heidi Heitkamp (D-N.D.), the senators — mostly from Midwestern states — pushed EPA to raise this year’s biofuel targets in its final rule, pointing to the biodiesel industry as an example of what happens with unstable policy. According to an industry survey released yesterday, nearly 80 percent of biodiesel producers in the country have reduced production this year (Greenwire, May 14).The senators also pushed for the extension of the $1-a-gallon biodiesel tax credit, which is included in the tax extenders package being debated this week on the Senate floor.

“If you look at what this industry depends on, it’s certainty. On that score, we’ve failed miserably,” Heitkamp said at a press conference.

Along with Heitkamp, the group of Democrats pushing yesterday for biofuels incentives consisted of Sens. Dick Durbin of Illinois, Maria Cantwell of Washington, Amy Klobuchar and Al Franken of Minnesota and Joe Donnelly of Indiana.

EPA’s proposal released in November represents a 16 percent reduction in the mandate for total renewable fuels compared with the level set by the 2007 statute. For biodiesel, EPA has proposed to require at least 1.28 billion gallons of biodiesel be used in 2014 and 2015 — below the industry’s actual production last year of nearly 1.8 billion gallons.

Biofuels groups and farmers have slammed the proposal since it was first leaked last fall. EPA is expected to finalize the rule in early summer.

“They just made the wrong call,” Donnelly said.

Klobuchar said she believed that senators with biofuel constituencies weren’t consulted as much as they could have been as EPA shaped the proposal. They’ve certainly had opportunities aplenty since its release; all the senators have met with EPA Administrator Gina McCarthy to express concerns.

Franken said he has taken his concerns all the way up to President Obama and White House senior adviser John Podesta. He would not comment on the specifics from meeting with Obama.

“I let him know my thoughts. … I think we’re going to make some progress,” he said.

EPA relied on “misinformation” from biofuel opponents when setting the numbers, Franken added. He dismissed concerns raised by oil industry over the blend wall, the term for the physical limit to the amount of ethanol that can be used in gasoline.

The senators rejected calls that Congress needs to step in and reform the renewable fuel standard.

“America is recalibrating its energy picture,” Durbin said. “We want to make sure that biofuels are included in the future when it comes to America’s energy.

But Heitkamp said that supporters like herself would wait until EPA releases its final rule before deciding on next steps. Depending on what EPA does, there may be room to seek a legislative fix, she said.

It’s unlikely that the Senate will come to agreement and pass any RFS legislation this year, regardless of what EPA does with the final numbers, given the difficulty in passing bills and the upcoming elections. Just this week, a bipartisan energy efficiency bill failed to garner enough support to advance to a final vote (E&E Daily, May 13).

Democratic senators themselves remain divided on the future of renewable fuels policy, with support dependent on the size and shape of their state’s renewable fuels industry.

Within minutes of the end of the press conference, a separate pair of Democratic senators hosted a closed-door briefing across the street in the U.S. Capitol for their colleagues on the need for reform to the renewable fuel standard.

“The briefing is specifically for Senate Democrats, and will focus on the need for RFS reform in 2014,” said an advisory sent to congressional offices.

Democratic Sens. Mark Begich of Alaska and Mark Pryor of Arkansas hosted the briefing. Pryor is the sole Democratic co-sponsor on a bill introduced last year that would repeal the renewable fuel standard; the bill introduced by Sen. John Barrasso (R-Wyo.) currently has 18 co-sponsors.

“These mandates are unworkable and need to be overhauled,” Pryor said when the bill was introduced last June.

Present at yesterday’s briefing were some of the most vocal critics of the RFS, including American Petroleum Institute CEO Jack Gerard, whose group has been the powerful voice calling for complete repeal of the biofuels mandate.

Also present were representatives from the American Fuel & Petrochemical Manufacturers, the National Council of Chain Restaurants, the Environmental Working Group, BoatUS and ActionAid USA. All the trade organizations have called for at least reform of the RFS.

The groups have centered criticism on the corn ethanol portion of the mandate, which they say has come with environmental costs, squeezed refiners and led to higher food prices.

The only renewable industry supporter who spoke at the briefing was Michael McAdams, president of the Advanced Biofuels Association.