U.S. House Plans Hearings on Federal Ethanol Mandate

April 24, 2013 07:23 PM

April 25 (Bloomberg) -- A U.S. House committee plans hearings this summer on the federal government’s Renewable Fuels Standard, the 2007 law that mandates ethanol use.

Lawmakers including Representative Fred Upton, the Michigan Republican who chairs the Energy and Commerce Committee, and Henry Waxman of California, the panel’s ranking Democrat, are issuing white papers reviewing the law to determine its effectiveness, Karen Lightfoot, a spokeswoman for Waxman, said in a telephone interview.

Ethanol advocates and petroleum interests are debating whether the U.S. should keep the law and whether it has worked as intended. The RFS calls for the nation to use 13.8 billion gallons of ethanol this year and 14.4 billion in 2014.

No date has been set for the hearings, Charlotte Baker, the committee’s spokeswoman, said in an e-mail.

"We think this is part of the reform process," said Tim Cheung, a research associate at ClearView Energy Partners LLC in Washington. "It comes in pieces. This is why we think the reform prospects are heating up."

Denatured ethanol for May delivery rose 1.5 cents, or 0.6 percent, to $2.45 a gallon as of noon local time on the Chicago Board of Trade. Prices have gained 12 percent this year.

Ethanol is typically blended and sold at filling stations in a formula of 10 percent of the renewable fuel and the rest gasoline. In order to meet the federal targets, U.S. refiners would have to sell fuel that contains more than 10 percent of the biofuel.

Higher Blends

The EPA has approved blends of up to 15 percent of ethanol for vehicles made in 2001 and later. The American Petroleum Institute and the American Fuel & Petrochemical Manufacturers say more testing is needed to determine whether that level is safe for cars.

Cheung said the U.S. will probably revise the mandate within the next two years.

Representative Bob Goodlatte, a Virginia Republican, and a bipartisan group of legislators earlier this month introduced a bill that would eliminate requirements for ethanol made from corn, in favor of more advanced biofuels, and cap the amount of the fuel that can be mixed in gasoline at 10 percent.


--Editors: Charlotte Porter, Richard Stubbe


To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net


To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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