Calls for Congress to reform RFS grow as EPA’s hearing approaches

An increasingly broad coalition plans to press Congress to repeal, or at least radically reform, the federal Renewable Fuels Standard, officials of several associations said the day before the US Environmental Protection Agency’s Dec. 5 public hearing on its proposed 2014 quotas.

The RFS’s problems are so extensive and complex that a similarly broad group including the Obama administration, state and local governments, oil and gas industry, and every significant stakeholder may need to join federal lawmakers in the effort, American Petroleum Institute Pres. Jack N. Gerard suggested.

“We all agree the RFS is broken and needs to be fixed,” he told reporters at a Dec. 4 luncheon briefing at API’s headquarters with officials from several organizations outside the oil and gas industry. “Look at where the discussion is today, compared to 6 months ago. The more the public engages, the more Congress listens.”

EPA acknowledged that a blend wall had been reached when it proposed a lower biofuel quota for the coming year for the first time last month (OGJ Online, Nov. 15, 2013). Gerard and other association leaders applauded the action, but added that it is only a temporary solution.

“We’re not asking EPA for cuts in ethanol production. We’ll still use it,” American Fuel & Petrochemical Manufacturers Pres. Charles T. Drevna said in a Dec. 4 press teleconference before API’s luncheon. “We’re asking EPA to hold off on the mandate and not adversely impact the consumer. We believe this is critical to protect the driving public, and to preserve stability in the market.”

Corn ethanol mandate

Officials representing small engine manufacturers, chain restaurant franchisees, turkey and chicken farmers, and other interests said the RFS’s corn ethanol mandate should at least be reevaluated and probably repealed.

“EPA's unprecedented decision to reduce the amount of corn ethanol that is blended into gasoline is an explicit recognition that the RFS is badly broken,” said Scott Faber, the Environmental Working Group’s vice-president of government affairs.

“Even EPA in its own regulatory analysis has concluded that corn ethanol is producing more GHG emissions than the gasoline it was designed to displace, and that our heavy reliance on corn ethanol is a significant source of water and air pollution,” Faber said, adding, “That’s why it’s so important that we not only take a first step by reducing the amount of corn ethanol that is blended into our gasoline, but take the much larger and necessary step to end the corn ethanol mandate and reform the RFS.”

National Chicken Council Pres. Mike Brown said, “Last year, more than 40% of the nation’s corn crop went to ethanol production—not food or feed. This rising demand for corn has artificially forced prices for the commodity up by nearly 40% since 2005, to the detriment of US food producers and hungry families. The volatility has been equally damaging for poultry and livestock producers.”

Nicole Vasilaros, the National Marine Manufacturers Association’s regulatory and legal affairs director, said the recreational boating industry relies on gasoline with a 10% ethanol blend as its base fuel. “Marine engines are legally prohibited from operating on higher ethanol blends,” she indicated. “Producers and consumers alike also rely on E0, as ethanol-free fuel is important for legacy engines.”

Inadequate warnings

“None of the equipment out there is designed to run on any fuel with more than 10% ethanol,” said Kris Kiser, president of the Outdoor Power Equipment Institute. “We went into federal court because EPA provided inadequate warnings about misfueling and its potential damage to engines. It also refused to mandate E10 as a legacy fuel for engines that require it. There are too many gallons of ethanol chasing too few gallons of gasoline.”

“Our members are concerned with E15’s impact on vehicle warranties,” said Patrick O’Connor, US legislative counsel for the NAFA Fleet Management Association. “We also are concerned with the warning label on the pump, which we consider inadequate, and our central fueling facilities. We’ve already seen problems with E10, and expect problems with E15.”

Gerard and Drevna separately said they would ask EPA to ensure the 2014 mandate does not require more than 9.7% ethanol be blended into the national fuel supply. “Such steps are necessary to retain a supply of pure gasoline required for some engines, account for historical differences between EIA projections of gasoline demand and actual demand, and promote liquidity in the [Renewable Identification Number] market,” Drevna explained.

“The market should be the driver,” Gerard maintained. “We look forward to the day when real alternatives emerge. Corn has filled the space so far. Now, it wants more.”

He said he considers it significant when the US House Energy and Commerce Committee’s two leaders—Chairman Fred Upton (R-Mich.) and Ranking Minority Member Henry A. Waxman (D-Calif.)—agree the RFS needs to be reevaluated. “I think Congress is increasingly recognizing something needs to be done about this,” Gerard said.

Contact Nick Snow at nicks@pennwell.com.

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