Senate committee challenges RFS goals

Ethanol groups say EPA's delay in rulemaking has stifled investment in advanced biofuels.

The chairman of a Senate subcommittee used a hearing Thursday on Government Accountability Office (GAO) reports contending the Renewable Fuel Standard (RFS) will fail to reach its 2022 goals to again call for an end to the program.

Sen. Thomas Lankford (R., Okla.) a longtime opponent of the RFS, opened the hearing by his Senate Homeland Security and Governmental Affairs Subcommittee on Regulatory Affairs and Federal Management by arguing the GAO reports support his contention the RFS is an unmanageable program.

"Rather than continuing with an unwieldy program which consistently fails to meet its targets and goals, it is time for Congress, the next Administration, and the American public to do away with the RFS," he said in his opening statement before hearing testimony from GAO and EPA officials.

Lankford noted GAO’s first report determined that advanced biofuels production is unlikely to meet the RFS’s increasing production targets. He summarized that GAO noted that advanced biofuels are still too expensive for stakeholders to produce at necessary levels to meet the RFS’s increasing targets through 2022. “Despite the federal government spending $1.1 billion between fiscal years 2013 and 2015 for advanced biofuels research and development, GAO determined that advanced biofuels targets are unattainable,” he said.

In its second report, GAO concluded that the RFS is unlikely to meet its goal of reducing greenhouse gas emissions. The production of advanced biofuels, which should reduce greenhouse gas emissions, will remain too limited to meet the program’s greenhouse gas reduction targets. For example, in 2015, cellulosic biofuel, an advanced biofuel category, was produced at a meager 142 million gallons—less than 5 percent of the statutory target of 3 billion gallons, Lankford said in his opening statements.

But Renewable Fuels Assn. president and chief executive officer Bob Dinneen said the hearing and the GAO reports "really miss the point. The RFS has been a resounding success by any measure. It has created high-paying jobs across America, reduced oil imports from OPEC, lowered consumer fuel prices, slashed emissions from the transportation sector, and driven substantial investment into advanced and cellulosic biofuel technologies."

Dinneen noted that while first-generation biofuels such as ethanol were already proven in 2007 when Congress expanded the RFS, "legislators knew full well that the pace of commercialization for advanced and cellulosic biofuel technologies was somewhat uncertain. That's precisely why Congress included measures allowing EPA to adjust advanced and cellulosic volume requirements. Indeed, the volumes in the 2007 bill were not a forecast, but rather an aggressive goal and bold vision to support the creation of a vibrant low-carbon advanced biofuel market."

He said that 'bold vision is in fact being realized, and advanced biofuel production has grown dramatically under the RFS. Production and use of advanced biofuels has risen from less than 200 million gallons when the original RFS was adopted in 2005 to approximately 4 billion gallons (RINs) in 2016 - a 20-fold increase. That's a remarkable achievement that simply wouldn't have occurred without the RFS." The total cited by Dinneen includes at least 2 billion gallons of biomass-based diesel and more than 2 million gallons of cellulosic ethanol.

He said GAO ignored impediments to more rapid growth in advanced and cellulosic biofuel production.

"The Great Recession and financial crisis, lengthy delays by EPA in setting annual RFS volume requirements, uncertainty caused by oil industry lawsuits and repeal efforts, and OPEC manipulation of world oil markets are just a handful of unforeseen challenges that have undercut more rapid development of next generation biofuels," Dinneen said.

Growth Energy CEO, Emily Skor, added, “The goals laid out by the RFS are ambitious, especially in regards to next generation biofuels. It is difficult to predict the timing of new technology, and adding to that is the economic, administrative and congressional uncertainty that have contributed significantly to the projections made in these GAO reports. EPA’s recent decision to set the 2017 Renewable Volume Obligations (RVOs) for conventional biofuels to the statutory level of 15 billion gallons is a great first step in creating certainty for the industry.

"Still," he continued, "even with that uncertainty and instability in the background, leading innovators like DuPont, POET/DSM, Quad County Corn Processors, East Kansas Agri-Energy, CHS, Adkins Energy, ICM, Valero and many others are showing that advanced and cellulosic biofuels are real and are poised for explosive growth in the years ahead."

Skor noted, “We now see our first commercial-scale cellulosic ethanol plants bringing advanced biofuels to the market. These are technological advancements that would not have happened without the goals laid out under the RFS. Policymakers can help further spur this progress by continuing to let the RFS program work as intended.

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