US ethanol lobby expects hearings on renewable fuel mandate next year

Source: Washington (Platts) • Posted: Monday, November 12, 2012

The US ethanol industry’s loudest voice in Washington expects to have to defend the Renewable Fuel Standard during congressional hearings next year.

Bob Dinneen, president of the Renewable Fuels Association, told reporters Friday he considers it likely that ethanol opponents will again introduce legislation repealing or weakening the policy. This time, though, he thinks those efforts will get enough traction for a hearing before the House Energy and Commerce Committee by spring or early summer.

“We’re expecting hearings, we’re expecting attacks,” he said. “We’re ready for all of that.

Dinneen added that President Barack Obama’s re-election this week makes tax credits long enjoyed by the oil and gas sectors obvious targets during Congress’ discussions about budget cuts.

The ethanol industry had less at stake in the election, Dinneen said, because both candidates defended the fuel standard during the campaign and because the Obama administration was “very good for ethanol” in its first term.

“Conversely, you gotta say that some of our friends in the oil patch maybe didn’t have quite as good a day,” Dinneen said of the election. “They’re probably wondering why they spent so much money to elect folks that would be thinking only about petroleum interests.

“Wednesday morning, they were probably a little bit shaken and wondering, as they should be, to what extent they’re going to be able to protect their tax incentives.

And yet Dinneen’s group and the broader biofuels industry will be pushing this fall for Congress to pass a package of energy-related incentives during the lame-duck session. The legislation includes a $1.01/gal tax credit for makers of cellulosic fuel, which is set to expire December 31, and a $1/gal biodiesel credit, which expired last year.

Dinneen said the end of the cellulosic tax credit would be a major setback for companies attempting to scale up second-generation biofuels.