Lawmakers Seek Ethanol Cap: House Bill Would Codify Ethanol Blend Wall

by Todd Neeley (DTN The Progressive Farmer) The ethanol industry has hit the blend wall where total production exceeds the available E10 market, and a small group of federal lawmakers wants to keep it that way.

Legislation introduced in the U.S. House of Representatives on Tuesday would cap the volume of ethanol blended in gasoline at 9.7%.

Reps. Bill Flores, R-Texas; Peter Welch, D-Vt.; Bob Goodlatte, R-Va.; and Jim Costa, D-Calif., introduced "The Food and Fuel Consumer Protection Act." In a news release, Flores said H.R. 5180, "limits the RFS mandate to levels that our nation's cars, trucks, boats and other small engines can safely accommodate."

The lawmakers make the case the RFS has harmed consumers. Goodlatte also has made a push for RFS reform, introducing bills in 2013 and last year.

Though lawmakers make the argument on higher food costs, U.S. food inflation averaged about 1.2% in 2015 and is expected again this year to stay below the 20-year historic average of 2.5%, according to USDA.

Renewable Fuels Association President and Chief Executive Officer Bob Dinneen said in a statement the bill is likely dead on arrival.

"Passage of this bill would represent a complete capitulation to the oil industry that steadfastly refuses to provide consumers higher-octane, lower-cost alternative fuels at the pump," he said.

"They whine about a so-called blend wall even as they continue to build it themselves by denying consumer access to E15 and E85. The RFS was made necessary by oil company intransigence. It was intended to break the stranglehold oil companies have on the motor fuel market by forcing access. This bill would gut the RFS and send America's energy and climate change policy back decades." READ MORE and MORE (Ethanol Producer Magazine) and MORE (Bloomberg BNA) and MORE (WNAX) and MORE (DomesticFuel.com) and MORE (Minnesota Bio-Fuels Association) and MORE (Corpus Christie Caller Times) and MORE (Bloomberg) and MORE / MORE (The Hill) and MORE (The News Virginian) Download legislation

Excerpt from Bloomberg: House Energy Sets Stage For 2017 RFS Changes For the first time this Congress, the House Energy and Commerce Committee will tackle the Renewable Fuel Standard, giving members a chance to stake their positions on an issue that splits the committee’s Republican majority.

Wednesday’s hearing on the RFS gives lawmakers the chance to hear the views of both refiners and ethanol producers, as well as the EPA on legislation to cap the share of ethanol in the fuel supply at 9.7 percent. With the American Petroleum Institute and refiners’ groups pushing for a an overhaul of the program, lawmakers say this hearing could set the stage for reworking the rules for ethanol and biofuels — but that’s not going to gain momentum until next year.

“Step one is to have this hearing and see the lay of the land,” Rep. Joe Barton, a Texas Republican, said in an interview.

The Environmental Protection Agency proposed boosting renewable fuel volumes to 18.8 billion gallons in 2017, from 18.1 billion gallons the previous year. All stakeholders took issue with the proposal: Refiners said the mandate was set too close to the “blend wall” of 10 percent of the fuel supply; ethanol producers argue EPA shouldn’t lower the quotas laid out in the 2007 law based on a percentage cap they call fictitious.

EPA Acting Assistant Administrator Janet McCabe will discuss the agency’s proposal at the hearing, alongside EIA Deputy Administrator Howard Gruenspecht. They will be followed by a panel of industry advocates.

Lawmakers will press McCabe and Gruenspecht on where they stand on a bipartisan RFS reform bill introduced by Texas Republican Bill Flores and Vermont Democrat Peter Welch. Oil industry lobbyists say the bill, H.R. 5180, could be the basis for RFS reform efforts in the 115th Congress. It’s more modest than past efforts to kill or modify the program, proposing to cap the volume of ethanol blended into gasoline at 9.7 percent. It would also bar the EPA from modifying biofuels mandates if the agency fails to meet deadlines for doing so. Previous efforts to end the entire RFS, or the requirement for corn ethanol, have fallen flat.

“What Flores and Welch are doing is a pretty commonsense, middle-of-the-road approach,” Barton said. Chances for such legislation reaching the floor at all this year are slim to nil but lobbyists say that’s the not goal here. This is about laying the groundwork for a later reform effort.