Upton, Waxman seek answers on RFS in preparation for hearings

Source: Amanda Peterka, E&E reporter • Posted: Friday, April 19, 2013

Top energy lawmakers today released the second in a series of white papers on the renewable fuel standard, the 5-year-old energy policy that mandates yearly levels of conventional ethanol and advanced biofuels.

The four-page paper is meant to be a starting point for discussion on how the standard has affected agricultural production, House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and ranking member Henry Waxman (D-Calif.) said. They plan to use the input later in the year when the committee holds hearings on the standard.

“In some respects, the RFS has unfolded as expected, but in others not,” the white paper says. “It is time to undertake an assessment of the RFS.”

The standard requires 36 billion gallons of biofuels to be blended into the nation’s motor fuel supply by 2022. Of that, 16 billion gallons must come from next-generation sources such as agricultural residues and switch grass; the remainder is expected to come from conventional corn ethanol.

In the paper, Upton and Waxman acknowledge the intense debate over ethanol’s link to corn prices and indirect land-use change in foreign nations. They are soliciting comments from stakeholders on what effect the RFS has had on commodity prices, agricultural output, rural jobs and food prices.

They also ask whether U.S. EPA was in the right last year when it denied requests by several livestock-state governors to waive the standard’s corn ethanol requirements for up to a year in response to the drought. EPA found that the RFS was not causing severe economic harm to any state or region, the standard for granting a waiver.

The white paper will likely engender responses from livestock groups that say the renewable fuel standard is driving up food and feed costs. A study earlier this year by private consultant FarmEcon LLC supported the position, finding that increased use of corn under the renewable fuel standard was “strongly associated” with an increase in the prices for the raw commodities that go into food (Greenwire, Jan. 11).

Ethanol groups have disputed the link between ethanol and food prices, as well as questioned the science behind studies of indirect land-use change due to biofuels expansion. They have accused livestock groups of “trotting out untruths” about ethanol’s agricultural impacts.

In response to Energy and Commerce’s first white paper, Renewable Fuels Association President and CEO Bob Dinneen warned that changing the renewable fuel standard partway through its life could have “devastating” consequences.

“Congress needs to consider the consequences of ‘changing the rules in the middle of the game,'” Dinneen wrote. “Investments have been made on the basis of a law passed by Congress and regulations promulgated by EPA. … It would send a particularly negative and chilling signal to the investment community if the RFS is interrupted midstream.”

Later in the spring, Upton and Waxman plan to issue RFS white papers on greenhouse gas emissions, energy policy and fraud in the renewable fuel credit market. The first paper, which garnered about 40 comments, focused on issues surrounding the technically feasible saturation of ethanol in the fuel market (E&E Daily, March 22). Hearings on the standard will likely begin in late spring or early summer.