Shimkus faces RFS ‘angst’ in bid for energy gavel

Source: Geof Koss, E&E reporter • Posted: Thursday, October 13, 2016

A top contender to lead the House Energy and Commerce Committee in the next Congress is facing doubts over his commitment to reforming the federal renewable fuel standard if he becomes chairman of the powerful panel.

Some energy lobbyists fear that Rep. John Shimkus (R-Ill.), the most senior Republican on the committee who has not already served as chairman, may be reluctant to aggressively take on RFS reform should he succeed in his quest to replace term-limited Rep. Fred Upton (R-Mich.), given that his southeastern Illinois district is a major corn producer. The Department of Agriculture ranked Shimkus’ district seventh among the 435 congressional districts in corn production in 2012.

While several other Republicans on Energy and Commerce have been mentioned as contenders for the gavel next year, including former committee Chairman Joe Barton (R-Texas) and current Vice Chairwoman Marsha Blackburn (R-Tenn.), Rep. Greg Walden (R-Ore.) is considered Shimkus’ main competitor for the slot.

Walden, the chairman of the panel’s Subcommittee on Communications and Technology, has been far more active on that aspect of the committee’s broad jurisdiction than environmental and energy policy. Shimkus, on the other hand, is chairman of the Subcommittee on Environment and the Economy and a senior member of the Energy and Power Subcommittee.

During a Energy and Power Subcommittee hearing in June on the RFS, Shimkus urged a “move toward compromise” on reforming the program. “We will be better when we work together than when we work apart,” he said.

But reform advocates say Walden has staked out more of a position than Shimkus, noting that the Oregonian was among the signatories of a November 2015 letter that called on U.S. EPA to exercise its statutory authority to waive the conventional biofuel volumes to keep blending requirements below the so-called blend wall.

Additionally, Walden is among the co-sponsors of bipartisan legislation (H.R. 5180) from Reps. Bill Flores (R-Texas) and Peter Welch (D-Vt.) that would cap the volume of biofuels added to transportation fuels at just under the level that RFS opponents say won’t harm engines.

Walden’s stated support for changes to the RFS has reassured lobbyists who favor reform and are wary of Shimkus.

“When you look at his actions, what he’d done or shown the public to date, his resume is full of knowledge and support and understanding of the trials and tribulations that are the RFS and that as refiners we struggle with,” said one energy lobbyist of Walden. The lobbyist added that RFS reform advocates have made their views on the issue known to the House GOP Steering Committee that will ultimately pick the next chairman.

“You can be assured that members of the Steering Committee, whether they’re current ones or ones who are going to be on it, certainly know that there’s a lot of distance between Walden and Shimkus on the issue of the RFS,” the lobbyist said.

Hesitation over Shimkus persists despite a late June meeting the lawmaker convened with lobbyists to clear the air over the issue.

“We all had a pretty good meeting with Mr. Shimkus at the end of June, and he said all the rights things about being open to pursuing RFS reform, bringing all the parties together,” said one refining industry executive who attended the meeting.

“I think there’s a lot of skepticism still in many corners relative to how sincere he is on that issue,” the executive said. “I think in general, refiners are going to be a little more at ease with Mr. Walden as chairman, and I suspect that preference is shared by the telecom and health care industries as well.”

This lobbyist conceded the RFS grumblings aren’t likely to derail Shimkus’ bid for the chairman’s seat, noting that even if he doesn’t get the full committee chairmanship, he’s likely to end up with the gavel for the Subcommittee on Energy and Power instead.

“Shimkus is a really smart guy, and look, Shimkus is in the room whenever an RFS deal is cut,” the lobbyist said. “It’s not a question of doing a work-around the guy. It’s do you want him holding the big gavel or the subcommittee gavel? And I don’t know that anyone is going to lay down in the tracks if it’s going to be Shimkus, but there’s just general angst if it is him.”

Walden’s office noted his support for the Flores-Welch legislation but declined to make the lawmaker available for an interview. Lobbyists say Walden is currently “laser-focused” on the November elections, given his role as chairman of the National Republican Congressional Committee.

A strong showing by GOP House candidates Nov. 8 would likely boost Walden’s odds of ending up with the Energy and Commerce gavel, one lobbyist said last week, although that was before explosive audio of GOP presidential nominee Donald Trump speaking of women in crude and offensive terms was released. Those recordings brought long-simmering discontent within the Republican Party with Trump out into the open just weeks before the election and prompted House Speaker Paul Ryan (R-Wis.) to tell his caucus this week he’s focusing his attention solely on preserving GOP congressional majorities (Greenwire, Oct. 10).

The ‘perfect person’ to broker a deal

Shimkus last week maintained that he’s uniquely situated to “untangle” the “mess” that is the RFS, noting that in addition to cornfields, his district also has a refining presence and marginal oil production.

“The interesting thing is my district is the perfect district to address reform,” he told E&E News in a phone interview. “I have one huge refinery in the central part of my district, and then there’s a refinery that I in essence grew up next to that’s been part of my community my entire adult life. Then in between them, there’s a lot of corn and soybeans. So I’m the perfect person to really address them.”

While members of both parties have focused plenty of attention on reforming the RFS in recent years with few signs of progress, Shimkus said the stars are starting to align for legislative reform.

“First of all, you’ve got to have an appreciation that there’s a lot being done right now,” he said. “There’s a lot of talks going on, about what’s the middle ground, what can we do, talking to all the stakeholders. And sometimes they like what I say, and sometimes they don’t. Sometimes my strongest allies are mad at me.”

Shimkus also noted divisions within the refining sector on RFS reform. “They don’t have unanimity on some of the things they want to do,” he said.

He points to a major victory he notched in the current Congress — the overhaul of the Toxic Substances Control Act that President Obama signed into law in June. Shimkus shepherded the bill through the House with more than 400 votes, an unusual show of bipartisan support for rewriting a major environmental law.

“TSCA is harder than reforming the RFS — I know so, without a doubt,” Shimkus said. “The vested interest in TSCA was probably a multiple of 10. What do you have on the RFS? You’ve got crude oil, you’ve got refiners, you’ve got ethanol and you’ve got biodiesel, you’ve got convenience stores, you’ve got maybe middlemen, pipelines, stuff like that. … But it’s not really as extensive.”

And unlike TSCA, which lingered for nearly four decades without changes, Shimkus noted that the RFS’s statutory schedule for setting annual volumes peaks in 2022. “Remember there is a clock ticking on this, and that should be another thing that drives people to the table,” he said. “2022 is the clock. And really, people need certainty.”

Asked whether RFS reform will be a focus of his tenure as chairman should he prevail, Shimkus signaled the heavy lifting will be delegated to the next chairman of the Energy and Power Subcommittee.

“It will be a focus of the subcommittee chairman, and getting the right people to the right place is important also,” he said.

That slot was held by Rep. Ed Whitfield (R-Ky.) before he stepped down from Congress last month and quickly landed a lobbying gig (Greenwire, Sept. 29).

Rep. Pete Olson (R-Texas), who is currently leading the subcommittee and has signaled his interest in continuing to do so in the next Congress, is among the co-sponsors of the Flores-Welch RFS reform bill.

Shimkus said he spent September visiting with members expected to be on the Steering Committee that will ultimately select committee leaders.

“I sat down with them all and gave them my pitch, and I thought I was received well,” he said. “I don’t think in the Steering Committee that there’s a litmus test on issues. I do think that they expect you to be a national leader, not just ‘be careful about some of your parochial interests.’ And that’s what I say, too, I’m going to be a national leader. I have to be cognizant of the concerns of areas of the nation.”

After dispatching a conservative primary challenger in March, Shimkus finds himself in the rare position of not having a Democratic challenger in November. He said he intends to spend the next few weeks “being helpful across the nation” to his colleagues who face competitive races. “You don’t have to worry about a chairmanship if you’re not in the majority,” he said.

Shimkus, who made a bid for the Energy and Commerce gavel six years ago before stepping aside for Upton, also said he’s not concerned that the race will upend his relationship with Walden, noting the pair have joked on several occasions about the gavel contest.

“Greg’s a good friend, and we’ve worked together for a long time, both on the committee and I’ve been one of the top supporters of the NRCC,” he said. “Those relationships are valuable, and I think we’ll be fine.”

Reporter George Cahlink contributed.