Transportation fuel group rolls into RFS debate

Source: Amanda Peterka, E&E reporter • Posted: Monday, December 17, 2012

The Consumer Energy Alliance — whose members are transportation fuel producers, distributors and users — is diving into the debate over the renewable fuel standard.

An advocate of the so-called all-of-the-above energy policy and a supporter of the Keystone XL pipeline, the alliance plans to be a player in the RFS debate, CEA Executive Vice President Michael Whatley said. Its work starts Monday at the Southeast Ag-Energy Summit in Atlanta.

“I think everybody understands in the renewable fuels space that there are some areas where the RFS is clearly not working as intended,” Whatley said in an interview this week. “We’re going to have a national dialogue on this. What CEA is trying to do with the forum is to tease out what are the contours of that dialogue going to be.”

The 2007 renewable fuel standard sets levels of biofuel production each year with the goal of spurring both the production of traditional ethanol and of next-generation fuels.

The blistering U.S. drought this summer pushed the standard into the spotlight as livestock producers struggled to buy feed due to skyrocketing corn prices. With U.S. EPA denying requests to waive the standard’s corn ethanol mandate this year, foes of the RFS have promised to push for either reform or repeal of the whole standard in the next Congress.

Whatley said the alliance has had several internal conversations about the RFS but that this is the first time that the group has tried to engage in the conversation in a big way.

“We’ve got problems that are on the horizon, and those problems need to be addressed,” Whatley said. “We know that there is going to be a reform effort, and we know reforms need to be made. The only thing that we’re clear on at this point is that reforms need to be meaningful.”

Whatley said the alliance invited a broad array of groups to participate in the Ag-Energy panel Monday. American Fuel & Petrochemical Manufacturers (AFPM) outreach manager Steve Higley will moderate, while representatives from the North Carolina Soybean Producers Association Inc., National Pork Producers Council and Georgia Public Policy Foundation will participate, according to a draft agenda.

“Hearing directly from those who will be impacted by the renewable fuel standard is essential, which is why we view this session as an important opportunity for dialogue,” Higley said in an interview. “The RFS directly impacts consumers with higher costs, safety and liability concerns, and harms AFPM member companies’ operations.”

AFPM has filed several lawsuits against EPA over various decisions relating to the renewable fuel standard, the most recent over its 2013 biodiesel requirement of 1.28 billion gallons.

It also backed the waiver requests made earlier this year by several livestock-state governors and groups in the pork, beef and poultry industry.

National Pork Producers environmental counsel Michael Formica, who will also speak at the panel, said that although his organization supports the RFS, he believes there are some “regulatory tweaks” that can be taken. He noted that much of the country is still in a terrible drought.

“We’re still looking for any and every available option to get our guys relief on feed prices, on feed itself,” Formica said. “They’re still struggling to secure long-term commitments for feed for their animals. We’ve made it this far, we haven’t run out, but I don’t know if there’s any guarantees how long the current supply is going to last.”

Charles Hall, CEO of the North Carolina Soybean Producers Association, said that he hopes to use the panel to make the case that biodiesel, an advanced biofuel, should not be “tarred with the same brush” as corn ethanol.

The biodiesel industry, he said, has benefited the livestock industry by increasing the production of soybeans, which provide both a feedstock for biodiesel production and protein that is used in animal feed. It has also increased the profits for processors by raising the value of soy oil from the historical average of about 20 cents a pound to 50 cents a pound.

“I want to make sure that there is a clear understanding that soy biodiesel is not corn ethanol,” Hall said. “My goal is simply to stake out biodiesel’s position in all of this and be the flag waver for that portion and support our industry.”

He noted AFPM’s biodiesel lawsuit and said he thought the conversation Monday would be “wide-ranging.”

The panel will not include representation from the biofuels industry, according to the agenda. Charles Craig, president of the Biotechnology Industry Organization’s Georgia affiliate, said in a statement that he thought the Consumer Energy Alliance “shouldn’t set out to fix what isn’t broken.”

“The renewable fuel standard is working,” Craig said. “It is encouraging private companies to make investments, build new biorefineries and bring innovative technology to the market to end our dependence on foreign oil.”

The Consumer Energy Alliance represents “every gamut of the transportation fuels,” from producers, refiners and pipeline operators to airlines to highway users and truck stop operators, Whatley said. The goal of the conference Monday is to bring together the agriculture and energy sectors.

Other panels will address environmental regulation, renewable electricity and agricultural energy. Incoming Georgia Public Service Commission Chairman Chuck Eaton, who ran on a campaign against government regulation, will be the keynote speaker.

“We want to be able to advance development of every kind of energy source, diversify the portfolio to ensure that consumers are going to be protected, whatever the source people have access to,” said Adam Waldeck, director of the Southeast Energy Alliance, the branch that is hosting the conference.