Ethanol, Oil Groups Find Common Ground: High-Octane Fuels Legislation Still Alive in 118th Congress; Passage Still in Question

March 03, 2023

Print This Article Share it With Friends

by Todd Neeley (DTN Progressive Farmer) If there's a piece of legislation oil, automakers and renewable fuels companies can get behind as the wave of the future for fuels, it may have been the Next Generation Fuels Act pushed to the forefront by former Rep. Cheri Bustos, D-Ill., in 2021.

The bill would have required automakers to phase-in vehicles that burn higher-octane fuels by 2031. It would create a clean-octane standard that would require sources of additional octane to result in at least 40% reductions in greenhouse gas emissions compared to gasoline.

It would have set new limits on the use of hydrocarbon aromatics in fuels while improving vehicle fuel efficiency.

Although Bustos has retired from Congress, she said during a panel discussion at the national ethanol conference in Orlando, Florida, on Wednesday that the measure still is alive in the 118th Congress.

The chances of passing the measure as a stand-alone bill, however, may be small, Bustos said.

"I think it's probably going to have to go on some kind of rider," she said about the act. "It's just going to have to be attached to something else."

With Republicans now controlling the U.S. House of Representatives and a slew of freshmen representatives coming to Washington, Bustos said the opportunities are there to create a whole new coalition of biofuels supporters in Congress.

...

On the House Ag Committee, for example, there are 50 members on the committee and only 28 are members that have been around for more than one term. Bustos said that means there are 22 new representatives on the committee.

"The extremes are not going to be successful either on the far right or the far left," Bustos said.

"So that allows first of all room for compromise and if there's a willingness to compromise, that is an opportunity to teach, to mold."

Bustos told ethanol producers to spend time with new members of Congress, "invite them to your family farm, invite them to your ethanol plant, show them what you're doing, and tell them why renewable fuels are so important."

In the current Congress, Bustos said Rep. Angie Craig and Sen. Amy Klobuchar have taken up the mantle on the Next Generation Fuel Act.

"And so the whole idea here is that you bring together the right interests, you write good legislation," Bustos said.

...

Frank Macchiarola, senior vice president of policy, economics, and regulatory affairs for the American Petroleum Institute, said the API and Renewable Fuels Association have found common ground on a number of issues.

That includes mutual support for a legislative fix on year-round E15, carbon pipelines and carbon-reduction standards.

"I'm cautiously optimistic about all of it," he said.

"I can just say from my experience, I've been at API for seven years and this is the closest aligned that we've been on a whole host of issues with RFA than I've ever seen."

...

Dan Bowerson, senior director of energy and environment for the Alliance for Automotive Innovation, said although liquid fuels will continue to be a big part of the nation's transportation sector for years to come, automakers' move toward more electric vehicles can't be ignored.

"We're committed to decarbonization and committed to a transition to electric," Bowerson said.

"The automakers are putting significant bets on electrification to the tune of $1.2 trillion globally in the next four years. That all being said, we still see a significant role for liquid fuels. There's around 270 million or so light-duty vehicles on the road today. About 1% of those are currently electric."

Since new vehicles stay on the road for about 12 years, he said, new vehicles purchased in 2023 will be on the road up to 2035.

"So, there is a significant opportunity here still to improve the light-duty fleet to decarbonize the existing fleet," Bowerson said. READ MORE

Here’s How NCGA Thinks U.S. Farmers Could Find 1.8 Billion Bushels of New Corn Demand (AgWeb)

NEXT GENERATION FUELS ACT REINTRODUCED IN U.S. SENATE (Brownfield Ag News)

Grassley Introduces Bipartisan Bill To Improve Vehicle Efficiency And Lower Fuel Costs (Office of Senator Chuck Grassley (R-IA))

Regan discusses RFS RVOs, E15 waiver during Senate hearing (Ethanol Producer Magazine)

Senators Reintroduce Next Generation Fuels Act (Energy.AgWired.com)

US senators seek to expand sales of ethanol-gas blend with support from Big Oil (Reuters)

Ethanol allies reintroduce bill to boost biofuel use -- The legislation seeks to promote blending more ethanol into gasoline. (Politico Pro)

Grassley pushing for action on year-round E-15 sales (KMA Land)

RFA Thanks House Members for Next Generation Fuels Act Reintroduction (Reneable Fuels Association)

House bill aims to create high-octane, low-carbon fuel standard (Ethanol Producer Magazine)

MI CORN CALLS FOR NEXT GENERATION FUEL ACT PASSAGE (Brownfield Ag News)

ACE members urge passage of biofuel bills during fly-in (Ethanol Producer Magazine)

Excerpt from Ethanol Producer Magazine: Sen. Pete Ricketts, R-Neb., pressed U.S. EPA Administrator Michael Regan on the agency’s proposed Renewable Fuel Standard biomass-based diesel renewable volume obligations (RVOs) and its delayed action on a Midwest E15 petition during a March 22 hearing held by the U.S. Senate Committee on Environment and Public Works to consider the EPA’s proposed fiscal year (FY) 2024 budget request.

The EPA released its long-awaited RFS “set” rule in December 2022. The proposed rule includes RVOs for 2023, 2024 and 2025. Those in the biofuels industry have been generally supportive of the agency’s proposed RVOs for cellulosic biofuel, advanced biofuel and renewable fuel, but have criticized the low proposed RVOs for biomass-based diesel.

...

During the hearing, Ricketts pointed out that those proposed RVOs are well below existing production capacity levels, which he estimated at 3.1 billion gallons. In fact, the EIA’s latest Monthly Biofuels and Feedstocks Update indicates total U.S. capacity for biodiesel, renewable diesel and associated fuels was at 4.922 billion gallons in December 2022, including 2.09 billion gallons of biodiesel capacity and 2.854 billion gallons of capacity for renewable diesel and associated fuels, including renewable heating oil, renewable jet fuel, renewable naphtha, renewable gasoline and other biofuels and biointermediates. The EPA’s own renewable identification number (RIN) data indicates approximately 5.79 billion D4 biomass-based diesel RINS were generated under the RFS in 2022, up from 4.87 billion in 2021. More than 4.78 billion of the 5.79 billion D4 RINs generated last year were generated for domestically produced biodiesel, renewable diesel, renewable jet fuel and renewable heating oil. A significant volume of additional renewable diesel and sustainable aviation fuel (SAF) capacity is under development and expected to become operable over the next several years.

During the hearing, Ricketts asked Regan why the agency has proposed RVOs for biomass-based diesel at levels below current production capacity. “I think that when we look at the lack of progress that had been made in the previous years, we had to go back and do the homework of a previous administration and catch up for 2020, 2021 and 2022,” Regan said. With the “set” rule, Regan said the agency is trying to set volumes for multiple years so that it can create some certainty, as requested by the biofuels industry. “So, I think the industry was pretty satisfied with where we landed on 2021 and now they are looking for that same trajectory and certainty in those out years.” Regarding the proposed biomass-based diesel RVOs for 2023 and beyond, Regan told Ricketts he will look into the issue to answer his question accurately.

Ricketts also discussed the importance of biomass-based diesel fuels in affordably reducing emissions in heavy duty trucking. He said that the approximate price for a diesel-fueled tractor is $180,000—significantly less than the approximately $500,000 price tag for an equivalent electric-powered tractor. Electric vehicles also weight more, limiting the load they can carry, he said.

Regarding E15, Ricketts noted that he was among the group of Midwest governors that petitioned the EPA in April 2022 for a regulatory change that would allow E15 to be sold year-round within their states. Under the Clean Air Act, the EPA was to respond to that petition within 90-days, but missed that deadline. The agency in March 2023 released a proposed rule to implement the requested change in Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin, but delayed the effective date of the proposed rule to 2024.

Ricketts asked Regan to explain the EPA’s delay in responding to the petition and asked what the agency’s plans are for allowing year-round sales of E15 during the upcoming summer driving season.

“I understand why this is important and I know it was important to you before you took this position [as senator],” Regan said. “We are excited about moving towards the waiver for 2024. We know the timing is different than what was originally requested and I believe our folks were being responsive to fuel distribution companies so that could be prepared for the next year—not this year. So, I recognize that we are on a slightly different clock.”

Regan said he will look into the issue and get Ricketts a more specific answer regarding the EPA’s failure to meet the 90-day deadline. For the 2023 summer driving season, “we’ll have to do is what we did last year, which is assess it case by case as we get closer to that time,” he said. In April 2022 the Biden Administration reinstated the ability to sell E15 during the summer driving season via a nationwide emergency waiver that was implemented as part of the administration’s effort to combat high fuel prices caused by Russia’s invasion of Ukraine. Representatives of the ethanol industry and a variety of federal lawmakers are urging the agency to take similar action this year.

A full replay of the hearing is available on the Senate Committee on Environment and Public Works website. READ MORE

Excerpt from Renewable Fuels Association: Click here for a fact sheet on the Next Generation Fuels Act

Specifically, the Next Generation Fuels Act would establish high-octane (95 and 98 RON) certification test fuels containing 20-30 percent ethanol, while requiring automobile manufacturers to design and warrant their vehicles to allow these fuels beginning with model year 2026. The bill also includes a low-carbon requirement, specifying that the source of the octane boost must reduce lifecycle greenhouse gas emissions by an average of at least 40 percent compared to a 2021 gasoline baseline, as measured by the Department of Energy’s GREET model.

The legislation also includes a restriction on the aromatics content of gasoline, ensures parity in the regulation of gasoline volatility (Reid vapor pressure), corrects key variables used in fuel economy testing and compliance, requires an update to the EPA’s MOVES model, ensures infrastructure compatibility, and addresses many other regulations impeding the deployment of higher octane blends at the retail level. READ MORE