Now is the Time to Act on RFS Reform: Bipartisan Group of Lawmakers Re-introduce Bill to Reform Ethanol Mandate
(Office of Congressman Bob Goodlatte) (R-Va 6)) Reps. Bob Goodlatte (R-Va.), Jim Costa (D-Calif.), Steve Womack (R-Ark.), and Peter Welch (D-Vt.) released the following statement today after reintroducing the Renewable Fuel Standard (RFS) Reform Act (H.R. 1315):
“The Renewable Fuel Standard is a well-intentioned flop. After a decade of this policy, it’s clearer than ever that the federal government’s creation of an artificial market for the ethanol industry has resulted in a domino effect that is hurting people across the country. The misguided RFS failed to lower prices at the pump all while creating an artificial market for ethanol that is having unintended and profound effects on consumers, energy producers, livestock producers, retailers, our food supply, and even the environment. Congress must reform the RFS and provide Americans relief. Leaders in the House have signaled that there is a real appetite to reform the ethanol mandate this year, and we urge our colleagues to consider the RFS Reform Act as a vehicle to guide this debate and reform process. Not only does this bill have bipartisan backing in the House, but it also has the support of a diverse coalition of organizations representing folks from every corner of the United States. Congress cannot continue to stick with the status quo when it comes to the ethanol mandate. We do not need any more delays – now is the time to act on RFS reform.”
Background: The RFS Reform Act eliminates corn-based ethanol requirements, caps the amount of ethanol that can be blended into conventional gasoline at 10 percent, requires the EPA to set cellulosic biofuels levels at production levels, and decreases the total volume of renewable fuel that must be contained in gasoline sold or introduced into commerce for years 2017-2022. At the time of introduction, the RFS Reform Act had 42 bipartisan cosponsors. READ MORE and MORE (Bloomberg BNA)
Excerpt from Bloomberg BNA: “[The Renewable Fuel Standard] sets the market as designed,” Brooke Coleman, executive director of the Advanced Biofuels Business Council, told Bloomberg BNA, referring specifically to the cellulosic market. “Re-engineering it to reflect the market is the equivalent of neutering the RFS.”
The current proposed 2017 quota for cellulosic biofuels is 311 million gallons, which is dramatically below the 5.5-billion-gallon threshold outlined by Congress. But the 311 million figure is more than nine times 2014 levels, and Coleman said those quotas largely reflect actual production levels.
An EPA proposal based on current production would, therefore, act as a de facto cap on cellulosic production, Coleman said. “If you’re coming on next year with a new production facility, than you wouldn’t get counted. Each expected rule would leave new production coming online in the dark,” he said. “The purpose of the standard to drive the market and increase production levels.”
Uncertainty in the biofuel market, drawn primarily from the EPA’s failure to issue RFS quotas from 2014-2016, forced a substantial amount of cellulosic investment overseas, James Greenwood, president Biotechnology Innovation Organization and a former member of Congress, told a House Agriculture subcommittee March 9.
Confidence in the cellulosic market had returned in recent months until news reports shed light on an apparent plan to change the compliance structure of the biofuel mandate in late February, Greenwood told the subcommittee.
“What’s necessary is stability. The investors invested in this program and in these plants on the basis of a promise Congress made when it passed the law originally,” Greenwood said. “The most important thing Congress needs to do is nothing. Leave the RFS alone.” That lost investment is going to cellulosic production in China and Brazil, Coleman said. READ MORE