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March 27, 2015
On March 23, a letter signed by 18 members of Congress to the House Appropriations Subcommittee on Agriculture asked the subcommittee to include “language to limit continued government support for corn ethanol,” primarily by limiting U.S. Department of Agriculture (USDA) funding for blender pumps, which can dispense ethanol-blended fuel, and by blocking agency staff from promoting ethanol exports. Reacting to the letter in a press release, Rep. Loebsack (D-IA) aimed to “set the record straight” on ethanol, explaining that the Renewable Fuel Standard (RFS) does not mandate corn ethanol use, rather, “the transportation fuel marketplace, not the government, has determined that ethanol is currently the most efficient, available and cost effective renewable fuel to meet the standard today.”
This appropriations gambit is part of a larger effort by a core group of anti-RFS legislators, some of whom would like to repeal the entire RFS, and others who are opposed to using corn ethanol in the transportation fuel supply. In February, Rep. Goodlatte (R-VA) with 57 Republican co-sponsors reintroduced House Bill (H.R.703), ‘The Renewable Fuel Standard Elimination Act,’ which would repeal the entire Renewable Fuel Standard, including advanced biofuels.
On the same day, Rep. Goodlatte, along with Rep. Welch (D-VT) and Rep. Costa (D-CA), also reintroduced H.R.704, an RFS "reform" bill entitled ‘To amend the Clean Air Act to eliminate certain requirements under the renewable fuel program, to prohibit the Administrator of the Environmental Protection Agency from approving the introduction into commerce of gasoline that contains greater than 10-volume-percent ethanol, and for other purposes’. Support for H.R. 704 is growing: it currently has 48 co-sponsors, 41 Republicans and 7 Democrats.
While it’s been speculated that the Senate does not have the votes to pass reforms to the RFS, the House bills and appropriations issues are a ‘death by a thousand cuts’ approach to weakening the marketplace for renewable fuels. According to Tom Buis, CEO of Growth Energy, the request to the House Appropriations Subcommittee on Agriculture is completely unnecessary, due to a 2014 mandate that already prohibits the USDA from using funding for blender pumps. Commenting on the letter, Buis stated that the signers are “bent on trying to alter or damage the RFS as a favor to special interests.”
Even if lawmakers are unable to pass a RFS “reform” bill, blocking access to the marketplace for renewable fuels will have the same effect. By blocking federal support of blender pumps, the chokehold the petroleum industry has on the retail fuel industry will continue. Individual fuel retailer contracts with the Big Five (Shell, BP, Chevron, ExxonMobil, ConocoPhillips) are so restrictive that higher blends of ethanol are offered mostly at independent retailers which are not tied to a Big Five fuel contract; less than 1 percent of gas stations with a Big Five fuel contract offer E85.
According to Buis, without a program like the RFS, there is “a de-facto mandate to use petroleum products … The government is not creating an artificial market for ethanol, but the (Renewable Fuel Standard) is seeking to level the playing field and ensure alternatives to fossil fuels have market access so consumers are given a choice.”
For more information see:
RFS: Setting the Record Straight Myth vs. Fact, Rep. Loebsack
Blender pumps fueling appropriations battle, Agri-Pulse
RFS Letter, Reps. Goodlatte, Welch, Costa, Agri-Pulse
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