House panel wants constructive, not combative, RFS discussion

Members of a US House Energy and Commerce subcommittee expressed frustration as petroleum industry witnesses said the federal Renewable Fuels Standard is working so poorly that it needs to be repealed, while fuel ethanol advocates said it has already produced significant benefits and deserves additional time to produce more.

“We could have had this hearing in January, and got the same…answers from you all. We need constructive ideas,” asserted John Shimkus (R-Ill.) as the Energy and Power Subcommittee held the first of 2 days of hearings on RFS impacts on stakeholders.

In an observation directed toward two of the witnesses—American Petroleum Institute Pres. Jack N. Gerard and American Fuel & Petrochemical Manufacturers Pres. Charles T. Drevna—Shimkus said: “You don’t have enough for repeal. You do have enough for reform. Good for you guys for toeing the line, but it would be helpful if you started being more constructive.”

Gene Green (D-Tex.) chimed in: “I’m as frustrated, as anybody else with the RFS. What we’ve seen the last couple of years with [renewable identification number] fraud and how the system has been gamed is driving many of us to believe the RFS should deal with things that are not edible.”

Noting that he has several biofuel facilities as well as refineries in his Houston area district, Green added, “I would probably vote for repeal of the RFS, but I don’t see how we could get there.

Bill Cassidy (R-La.) noted, “I don’t think we’re going to repeal the RFS. I’ve discussed this with several other members of this committee, and I don’t see how it could happen. We need to look at what we can do to fix it instead.”

Define ultimate goal

API’s Gerard replied, “I would suggest that the first thing we could do is define what we’re trying to accomplish. We need to address problems with the blend wall, which is the immediate crisis, and then go back to what we’re trying to do.”

AFPM’s Drevna added, “I think we need to look at what was anticipated, what the directives were, and what played out. We also need to look at what the overall impact is on the economy, and not just on specific segments.”

Corn-based ethanol advocates suggested refiners created their own RIN problems by refusing to blend more ethanol into the fuels they produce. “The RFS is saving consumers money, and there’s absolutely no correlation between RINs and prices at the pump,” declared Renewable Fuels Association Pres. Bob Dineen. “If oil companies don’t like RIN prices, they can simply blend more ethanol. If they don’t and gasoline supplies fall, shame on them.”

Growth Energy Chief Executive Tom Buis said, “Those who control the fueling and refining infrastructure have erected hurdles to meeting the goals that the RFS set. Consumers actually want the higher blends.”

Other biofuel industry witnesses said the US Environmental Protection Agency should exercise the authority it has to adjust alternative fuel volume requirements to reflect falling gasoline demand. Establishing requirements for multiple years also would create more certainty, they added.

“The debate over the RFS is having a chilling effect on the investment community and restricting the ability of many of our members to move forward,” said Advanced Biofuels Association Pres. Michael McAdams. “To repeal the RFS would pull the rug right out from companies which have made significant investments and change the rules of the game.”

Contact Nick Snow at nicks@pennwell.com.

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