The House subcommittee on energy and power, chaired by Rep. Ed Whitfield (R., Ky.), held a hearing Wednesday examining implementation issues with the renewable fuel standard (RFS) program. The hearing brought together representatives of the Environmental Protection Agency and the Energy Information Administration (EIA), as well as stakeholders in manufacturing, agriculture and fuel production, to discuss the current status and implementation outlook of the program.
The RFS specifies increasing amounts of renewable fuels to be added to the nation’s gasoline and diesel fuel supply each year through 2022. The discussion paid particular attention to the long-term direction of the program, since after 2022, EPA has wider discretion to set the RFS targets.
“It’s been nearly a decade since the RFS was last revised by Congress ... and a lot has changed in the interim,” Whitfield said. “Energy markets have evolved in ways that were not predicted back then, and RFS implementation has taken many unexpected turns.”
House Energy & Commerce Committee chairman Fred Upton (R., Mich.) added, “We all know that there are those who call for complete repeal of the RFS, and there are those who don’t want any changes at all, even modest ones, but I can’t help but think that if we approach this issue in a bipartisan fashion, we can find a path forward for an RFS that works for all the parties involved: farmers, renewable fuel producers, refiners, auto makers, power equipment makers and — most of all — consumers.”
“As we move forward, we’re going to have to move toward compromise,” House environment and economy subcommittee chairman John Shimkus (R., Ill.) said. “We will be better when we work together than when we work apart.”
Bob Dinneen, president and chief executive officer of the Renewable Fuels Assn., shared with the subcommittee that the oil industry would like to dramatically reduce or repeal the RFS because the program’s continued implementation would mean a further loss of market share, but doing so would devastate investment in next-generation biofuel technologies and halt the progress already made.
“The incumbent industry has already lost 10% of the market. If the RFS is implemented consistent with the statute, the market will make the final push to see cellulosic ethanol and other advanced biofuels to fruition, resulting in the loss of 30% of the market,” Dinneen said.
“It is important to note that Congress did an excellent job of crafting the RFS, building in a great deal of administrative and market flexibility to deal with issues as they arise,” Dinneen told the subcommittee. “You wrote a good law in 2005. Don’t be bullied by the hyperbole and scare mongering by the incumbent industry that fundamentally disagrees with the need for alternative, low-carbon options for consumers.
Dinneen concluded that "there is nothing wrong with the RFS that cannot be fixed with what is right with the RFS, and there is no need to legislate changes to a program that is working well today.”
National Biodiesel Board vice president of federal affairs Anne Steckel said while there are certainly areas that could be improved, the RFS has made tremendous progress in developing advanced biofuels and delivering them to American consumers. Biodiesel and renewable diesel have made up the vast majority of advanced biofuels in the RFS, filling more than 90% of the category in the last two years.
Steckel called for EPA to strengthen its recently announced RFS proposal, which includes a biodiesel volume of 2.1 billion gal. in 2018, only 100 million gal. more than the 2017 volume finalized last year. The industry already appears poised to exceed 2.1 billion gal. of RFS production this year, she noted.
“There remains significant untapped production capacity on the ground today, and biodiesel producers across the country will tell you they stand ready to invest and expand and hire with strong, stable policy,” her testimony read. “However, we continue to believe the agency is underestimating the volume of biodiesel that can be delivered.”
Chet Thompson, president of the American Fuel & Petrochemical Manufacturers (AFPM), challenged that the original basis for the 2005 and 2007 bills establishing and expanding the RFS no longer applies. “More than a decade after enactment, U.S. domestic energy production is near an all-time high, with little or no assistance from the RFS, and the notion that the RFS is better for the environment is, at best, debatable and questioned by many. In other words, the original premise for the RFS no longer hold true,” he testified.
“The time has come for Congress to repeal the RFS program. Not only is RFS implementation unwieldy and unworkable, but the ultimate goals of the program are not being met. This multibillion-dollar subsidy program is a drain on the economy, impedes true innovation, prevents consumers from making meaningful choices about their fuel purchases and may be causing more environmental harm than benefit,” Thompson said.
AFPM’s preferred remedy is full repeal of the RFS, although Thompson did state in written testimony that the group would support setting an ethanol content cap at 9.7% or less, putting a consequence in place if EPA misses its statutory deadline — such as automatically setting the level at the previous year’s standard if it isn’t promulgated in time — and sunsetting the RFS as quickly as possible.