Senate panel plans fall hearing on biofuel rule

Source: By Zack Colman, The • Posted: Thursday, August 1, 2013

The Senate Environment and Public Works Committee will hold a hearing on the Renewable Fuel Standard this fall, Bettina Poirier, a Democratic committee aide, told The Hill on Wednesday.

The announcement raises the specter that changes to the nearly decade-old biofuel-blending mandate could be in the offing.

The planned hearing comes as members on the House Energy and Commerce Committee are working on legislation to overhaul the rule.

The mandate, approved by Congress in a 2005 energy law and expanded two years later, requires refiners to blend 36 billion gallons of biofuel with conventional petroleum by 2022.

Some Democrats on the Environment and Public Works panel, such as Sens. Ben Cardin (D-Md.) and Tom Carper (D-Del.), have expressed concern about the rule.

They worry the biofuel rule is raising corn prices by requiring corn ethanol production. The lawmakers host poultry and meat industries in their states that oppose the mandate because they say it raises feed costs for their livestock and chickens.

“The poultry industry has paid a heavy price because of corn ethanol,” Cardin told reporters Wednesday in the Capitol. “It disrupts the food chain. It’s a situation where at the time it seemed like a good idea, but there has to be a time where we remove the subsidies when market forces and other issues make determinations — and on corn ethanol, we haven’t don that.”

Biofuel groups have pushed back against claims that the mandate is driving food prices upward, saying widespread drought has been the main factor.

The biofuel industry is also defending the Renewable Fuel Standard from attacks by the oil industry and some environmental groups.

Environmental groups have said corn ethanol’s impact on reducing greenhouse gas emissions is suspect.

The oil industry is concerned that refiners are approaching a “blend wall” in which they have to mix fuels with higher ethanol concentrations. It says many cars aren’t built to handle that gasoline, and that most gas stations lack the pumps to dispense it.

The oil industry also says refiners are forced to buy credits for next-generation biofuels that haven’t yet reached commercial scale.

But the biofuel industry says those advanced biofuels firms are starting to hit full stride, even if years behind original predictions.

Changes to the blending mandate now, supporters say, would jeopardize investment in such technologies and stunt economic activity in the rural communities in which the companies are located.

The industry pointed to Vero Beach, Fla.-based INEOS Bio, which on Wednesday became the first cellulosic biofuel firm to hit commercial production levels.

“The RFS (renewable fuel standard) has encouraged this investment and progress. Current efforts to destabilize the program are short-sighted and motivated solely by the oil refining industry’s desire to block competition and consumer choice at the pump,” Brent Erickson, executive vice president of the Biotechnology Industry Organization’s industrial and environmental section, said in a Wednesday statement.



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