Revisions to the federal reformulated gasoline program will be considered on the US Senate floor, possibly early this month, a bipartisan group of lawmakers predicted. Most senators support a plan agreed on by the Senate last year that updates RFG with a renewable fuels standard, effectively doubling fuel ethanol use over a decade.
A pending Senate measure passed by the Environment and Public Works Committee this year is very similar to last year's plan endorsed by integrated oil companies and fuel ethanol producers. But the environment committee proposal is still not officially part of a comprehensive energy bill.
Strong RFG support
Supporters of the RFG plan predict that if Congress passes an energy bill this year, it will include an RFG provision that includes the ethanol proposal.
Along with ethanol, the Senate RFG plan phases down methyl tertiary butyl ether and removes an oxygenate requirement. There is only liability protection for ethanol and ethyl tertiary butyl ether in the Senate version, but MTBE protection may be added either when the full Senate debates the proposal or later on in the legislative process when lawmakers negotiate with the House to produce a final bill.
Seeking to move that process forward, the Senate Energy and Natural Resources Committee early last week marked up three provisions of a pending comprehensive energy bill that includes a title on transportation fuels. But proponents of the RFG plan opted not to force a committee vote. Sponsors of the RFG revisions—Sens. Jim Talent (R-Mo.), Tim Johnson (D-SD), and Byran Dorgan (D-ND)—said they are confident they have the votes, but they feared their amendment might trigger a time-consuming committee fight, delaying floor consideration.
Opponents of the RFG-ethanol mandate proposal, including senators from California and New York, threatened to introduce more than 45 competing proposals if an RFG amendment were offered.
Next steps
Energy committee Chairman Sen. Pete Domenici (R-NM) says floor debate on an overall energy bill may happen as soon as this week.
The House already passed its own comprehensive energy bill, including an RFG title, in early April. The House RFG plan includes a provision to create a 5 billion gal/year fuel ethanol market by 2015, 3 years later than the Senate bill. It also removes the oxygenate requirement but does not phase down MTBE; it does offer merchant producers incentives to switch production to other clean fuel additives. It also gives MTBE the same product liability protection afforded to ethanol and ETBE in the pending Senate bill (OGJ, Apr. 14, 2003, p. 26).
Other energy bill action
The Senate energy committee approved without objection a research and development title, provisions related to Indian energy production, and a section on transportation fuels that addresses fuel efficiency and alternative-fuel vehicles (AFVs).
Of interest to producers is an amendment sponsored by Sen. Craig Thomas (R-Wyo.). The approved proposal establishes a Complex Well Technology Testing Facility at the US Department of Energy-supported Rocky Mountain Oilfield Testing Center based in Casper, Wyo.
With regard to the Indian energy provisions, a committee spokeswoman said the title reflects the "cooperative" bipartisan work of the Senate Indian Affairs Committee and the energy committee. The proposal creates the Office of Indian Energy Policy and Programs within DOE. The office, under the legislation, provides grants and loan guarantees to tribes to facilitate the development of their energy resources and infrastructure. Section 303 of the title allows tribes to enter into a lease or agreement without the approval of the secretary of the Interior "so long as those leases or business agreements conform to regulations promulgated by the secretary."
The section also establishes a process by which a tribe may submit a plan governing leases and rights-of-way to the secretary for approval. It also requires the tribe to demonstrate to the Department of the Interior that the plan includes provisions regarding lease and contract terms, environmental regulation, and public notification and comment.
On AFVs, the pending Senate measure approved by the committee seeks to provide additional flexibility for those that participate in mandatory fleet programs by allowing them to earn credits for using AFVs in medium and heavy- duty vehicles, including low-speed and zero emission vehicles.
Credits could be earned through investments in alternative-fuel fueling stations and distribution systems. Another section addresses corporate average fuel economy (CAFE), which says that the National Highway Safety and Traffic Administration has the authority to set CAFE standards and requires the agency to consider passenger safety and US jobs when doing so.
Still on the committee's agenda is the thorny issue of wholesale electricity markets. Industry lobbyists say the House and Senate versions should be easily reconciled on tax issues and research and development. But the two chambers could be at odds on controversial issues such as electricity restructuring and leasing in the Arctic National Wildlife Refuge. On ANWR, the House bill includes it, while the Senate version does not.
