A top ethanol lobbyist was the only House witness on Friday to oppose legislation to revamp the ethanol mandate, and said producers can’t support the bill because there’s too much uncertainty about whether it will lead to more ethanol consumption, or less.
“We can and will continue to support the development and use of high-octane, mid-level ethanol blends for the use in today’s and future vehicles; however, we cannot support what would only be a modest move in octane at the expense of one of the most successful energy programs in the last decade with the RFS,” said Emily Skor, CEO of the trade group Growth Energy.
She was talking about a Republican proposed bill to replace the Renewable Fuel Standard with a high-octane fuel standard that would be based on performance, and not on how much corn ethanol is used. Reps. Greg Walden of Oregon and John Shimkus of Illinois, the chairmen of the Energy and Commerce Committee and its environment panel, respectively, are serious about passing legislation to get rid of the RFS.
Skor was the only biofuel lobbyist on the panel of witnesses at the rare Friday hearing before the subcommittee. Others on the panel included oil refiners, fuel retailers and the automotive industry, who unanimously supported the proposed high-octane fuel standard.
Walden asked if they could all agree that a high-octane fuel standard, based on performance, not on corn, would be an improvement.
Skor answered “possibly,” as long as it works with RFS growth, she said. Everyone else said “yes.”
Walden pressed her to give a more definitive answer, and Skor said the proposed new policy “will not necessarily lead” to increased biofuel use.
She supports the use of ethanol to meet the demand for smaller, turbocharged engines that will be needed to meet increased fuel efficiency standards. That will drive demand for ethanol, which is a cheap source of octane for gasoline. But “we cannot assume” that an octane standard, without an RFS, will drive biofuel demand, she said.
Walden said he “supported” the RFS when it was first proposed and passed into law, but the Congress has to “modernize” it.
“We are serious about this,” Walden said. “This is a hard one” for both the House and Senate, but Washington has a “big responsibility to the country.”
Rep. Frank Pallone, D-N.J., the top Democrat on the committee, said he is not yet convinced that the proposed replacement for the RFS will do the trick.
Pallone said he is worried about the behind-closed-door deals EPA Administrator Scott Pruitt is working out with oil refiners, letting major multi-billion dollar companies off the hook in meeting the ethanol mandate under the RFS.
The RFS implementation is “not perfect.” He pointed out his “serious concerns and questions about EPA Administrator Pruitt’s extensive use of secret waivers to allow numerous refineries, apparently of all shapes and sizes, get out from their obligations under the law.”
The biofuel industry has been protesting EPA’s granting waivers to three of Andeavor’s smallest refineries. The company is one of the largest oil refining companies in the country. The ethanol industry argues that EPA’s actions to waive the facilities’ compliance with the RFS is outside of the agency’s authority, while being done without giving all stakeholders opportunity to comment in a transparent way.
Pallone said he supports giving waivers to companies in real financial distress, but Pruitt shouldn’t be giving waivers to companies that can easily absorb the financial burden of meeting the ethanol mandate. Pallone is convinced Pruitt’s waivers run afoul of the Clean Air Act.
