No Major Conclusions from RFS-related Hearing Wednesday

June 6, 2013 03:47 AM

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Lawmakers focus on E15, other issues; EPA to publish 2013 & 2014 RFS plans in summer.

No major conclusions were reached in Wednesday's RFS hearing in the House with some lawmakers critical of the agency on E15 and the RFS in particular. No new ground was broken during a House subcommittee hearing Wednesday, where panel members split along party lines over the renewable fuel standard (RFS), with Republican members taking aim at the regulation, notably the use of E15.

"By requiring refiners to produce a product that consumers can't use and don't want, it is only logical that this constriction of the market will increase fuel prices, causing economic damage," said Rep. James Lankford (R-Okla.), the subcommittee's chairman.

Diverting ethanol for gasoline also increases demand for corn and raises the cost of turkeys, chickens and other livestock that eat it, said Joel Brandenberger, president of the National Turkey Federation. If there are problems with the program, some Democrats on the panel said legislators should blame Congress, which passed the law, not the EPA.

Some panel members said EPA has the authority to waive the RFS if the regulation's impacts are sufficiently severe. But EPA was criticized over a lack of guidance that some legislators criticized. "The fact is you don't have to have a perfect definition, but if you don't have anecdotal examples of what is [severe] then you failed the most important test," said Rep. Darrell Issa (R-Calif.), chairman of the full Oversight Committee. "You've got to say 'this is out of bounds and this is in bounds.' Even the IRS had examples," he added, referring to the tax agency's targeting of conservative political organizations.

"Keeping the renewable fuel standard on track is critical if America is to succeed in the clean energy race of the 21st Century," countered Rep. Jackie Speier (D-Calif.), the panel's top Democrat.

"We didn't build the oil industry overnight," said Jeremy Martin, a senior scientist with the Union of Concerned Scientists' clean vehicles program. "Between now and 2015 we're not going to build a cellulosic biofuel industry that's the scale of the oil industry. We need a steady path forward."

Since 2011, the EPA has allowed gasoline comprised of up to 15% ethanol, known as E15, to be sold. Many cars are not prepared to handle that gasoline. EPA has declared that E15 is safe for cars made after 2001, many automobile manufacturers urge owners not to use the gas.

"Congress anticipated that the market would solve this problem" when it passed the Energy Policy Act, said Christopher Grundler, the director of the EPA's transportation and air quality office. "Clearly the market has not solved this problem yet." This summer, the EPA plans to make a decision on RFS volume requirements for both 2013 and 2014, he added, but could not provide a specific date except to say they would release the info by late-summer.

COMMENTS: Lawmakers and others got their say in on the RFS situation and EPA very correctly noted the situation for 2014 is going to be potentially dicey. While blenders can use carryover RINs from 2012 to meet their 2013 obligations, EPA told lawmakers the level of carryover 2013 RINs will be "critical" for whether the increased RFS requirements for 2014 can be met. This issue will stay in focus, especially if the EPA makes good on the pledge to have the 2014 recommendations out by late this summer. That will give plenty of time for lawmakers and others to focus on the plan and whether it is deemed workable or not.

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