Upton Taps Gang to Explore Ethanol Reform

Source: By Amy Harder, National Journal • Posted: Monday, July 29, 2013

House Energy and Commerce Committee Chairman Fred Upton, R-Mich., has tasked four GOP members of his panel to take the lead on reforming a federal biofuels mandate.

The four members represent districts that crisscross the diverse industries with a stake in this complicated and contentious debate, including oil refineries, corn growers, livestock farmers, and biofuels producers.

Rep. John Shimkus, R-Ill., a senior member of the committee who represents a state that is No. 2 in corn production, will lead the unofficial GOP team. The others are Reps. Cory Gardner of Colorado, Lee Terry of Nebraska, and Steve Scalise of Louisiana.

The eight-year-old renewable-fuels standard requires increasingly large amounts of biofuels—mainly ethanol made from corn—to be blended with gasoline each year. Since the devastating drought that sent corn prices soaring last year, the policy has come under intense scrutiny by Republican and Democratic lawmakers alike.

Among the four Republicans, Scalise from oil-rich Louisiana is the only one who has advocated for repeal of the RFS, as favored by the oil, livestock, and food industries. The other three lawmakers take more-nuanced positions because they represent constituencies that have a stake in maintaining the standard, including producers of corn and advanced biofuels that come from nonfood products such as cellulose but that are not coming to market as quickly as Congress initially envisioned.

The group will work on policy actions that reform but don’t repeal the mandate, which was established in the 2005 energy law and strengthened by Congress two years later.

“You don’t have enough for repeal,” Shimkus told a panel of stakeholders at a subcommittee hearing this past week. “You do have enough for reform.”

In an interview in his office the next day, Shimkus said the committee plans to draft legislation in the next few months. “I don’t think it’s going to be expansive,” Shimkus said. “We do think there is a pathway to ease some of the pressure” on renewable-fuel prices, which have gone up dramatically in recent weeks.

Upton approached Shimkus a month ago, and the group first met last week, before the two-day hearing that heard from 16 witnesses from various corners of this debate.

“We expect this group of members to play a big role in the reform effort, working with members both on and off our committee to ensure the wide range of regional, economic, and policy concerns are heard and understood,” said committee spokeswoman Charlotte Baker.

The group, along with Energy and Power Subcommittee Chairman Ed Whitfield, R-Ky., plans to reach out to Democrats in an effort to continue the rare bipartisan nature of the biofuels debate. Energy and Commerce Committee ranking member Henry Waxman, D-Calif., has been working with Upton on the issue for several months, including publishing five white papers and working together to hold two hearings.

“I think the plan is to see if we can come up with something there is consensus around with the wide spectrum just on the ‘R’ side,” said a House aide who would speak on the condition of anonymity only. “From there, we would want to broaden it out to a similar mix of three or four Dems with varying views on what to do with the RFS, for their input.”

Shimkus has spoken with Rep. Bruce Braley, D-Iowa, whose state produces the most corn in the country. Other Democrats reportedly eyed by Republicans as potential early supporters of the reform effort include Reps. Jim Matheson of Utah, Gene Green of Texas, and John Barrow of Georgia, considered the three most moderate Democrats on the committee.

Unlike most other energy and environment issues, the biofuels mandate has mixed support among Republicans. That’s a big reason why Upton has been methodical about addressing it, first with white papers, then with hearings, and now through an informal working group. “We’ve been tasked to find a sweet spot,” Shimkus said.

Meanwhile, the Senate is barely touching the issue. Mid-Atlantic senators, including several Democrats, are growing more concerned about high renewable-fuel prices and what some says is the mandate’s upward pressure on corn prices. And Sens. John Barrasso, R-Wyo., Pat Toomey, R-Pa., and Mark Pryor, D-Ark., have introduced a bill to repeal the policy altogether.

But a substantive debate on the mandate, such as what is happening in the House, is proving elusive in the upper chamber. The Senate panel with primary jurisdiction—the Environment and Public Works Committee—has not held hearings or done much at all on the issue. The Energy and Natural Resources Committee recently held a hearing on fuel prices, which only touched on the ethanol issues.