US Sens. Dianne Feinstein (D-Calif.), Patrick J. Toomey (R-Pa.), and Jeff Flake (R-Ariz.) introduced legislation to remove the corn ethanol mandate as a way to address problems with the federal Renewable Fuels Standard. They offered their measure as an amendment on Jan. 16 to the Keystone XL crude oil pipeline approval bill now before the Senate.
“We see two major problems with continuing to mandate the consumption of so much corn ethanol each year,” Feinstein said in a Senate floor speech. “The statute currently mandates more corn ethanol than can be used by the current vehicle fleet and [gasoline] stations. Roughly 40% of the US corn crop is now used to produce ethanol, artificially pushing up food and feed prices while damaging the environment.”
She said, “This amendment offers a simple fix that addresses both problems: elimination of the corn ethanol mandate.” It also would leave in place the requirement that refiners and blenders purchase and use low-carbon fuels, including cellulosic ethanol and biodiesel, she added. This would allow the RFS focus on fuels that address climate change more effectively and do not compete with the US food supply, she said.
The RFS originally was enacted under the 2005 Energy Policy Act and expanded under the 2007 Energy Independence and Security Act. EISA added diesel fuel to gasoline in the program. It increased the volume of renewable fuel required to be blended into transportation fuel from 9 billion gal in 2008 to 36 billion gal by 2022.
It also established new renewable fuel categories, and set separate volume requirements for each one. And it required the US Environmental Protection Agency to apply life-cycle greenhouse gas performance thresholds to ensure that each category fuel emits fewer GHGs than the petroleum fuel it replaces.
“Under government mandates, refiners—such as ours in Trainer, Pa.—are forced to make a choice: increase the ethanol content in their fuel blends, or pay a penalty by purchasing credits from energy traders,” Toomey said.
Pushing back
“Once again, this is the government using corporate welfare to shower money on a favored industry, and then send the bill to the general public,” Toomey said. “Labor leaders, businesses, and environmental groups have lined up to push back against this harmful regulatory regime.”
So have the American Petroleum Institute and the American Fuel & Petrochemical Manufacturers. “As it stands, EPA’s inability to manage this program—they are 2 years behind mandated timelines for renewable fuel volumes—leaves US refiners in the dark about regulatory requirements,” API Pres. Jack N. Gerard said in his 2015 State of American Energy address on Jan. 6.
EPA announced in November that it would not establish final 2014 biofuel quotas before yearend (OGJ Online, Nov. 21, 2014). It subsequently said the final 2014 quotas would be announced early in 2015. EPA also missed its Nov. 30, 2014, deadline to establish 2015 biofuel quotas, leading AFPM to file a notice of intent to sue the agency (OGJ Online, Dec. 1, 2014).
“Multibillion dollar industries cannot run on guesswork,” Gerard said. “Ultimately, Congress needs to correct it since a well-intentioned Congress created the problem.”
Feinstein, Toomey, and Flake’s legislation faces an uphill battle since many of their Senate colleagues from Great Plains agricultural states support using more corn ethanol in US motor fuels.
Renewable Fuels Association Pres. Bob Dineen said the senators’ amendment’s premise that the RFS’s corn ethanol requirements drive up food and gasoline prices is false. “The fact of the matter is that corn is less expensive today than when the RFS was passed in 2007,” he said on Jan. 16. “This amendment is an unnecessary solution to an imaginary problem.”
Contact Nick Snow at [email protected].
