Possible Actions on Renewable Energy & Fuels in the 114th Congress

On November 5, with Republicans declaring a major victory in the Senate, the game of musical chairs for Committee leadership has already begun.  Meanwhile, de facto Senate Majority Leader McConnell (R-KY) and House Speaker Boehner (R-OH), released statements that hint at their agenda for the 114th Congress.  In reading the tea leaves, what might be expected from this Congress with regard to renewable energy, particularly biofuels? While there may not be the super majority needed to block a filibuster or overcome a Presidential veto on bills that would negatively impact renewable energy  – renewable fuels may not fare so well in the upcoming Congress.

With their sights already set on the 2016 election, Boehner and McConnell are vowing to end the ‘grid lock’ and “put as much legislation on the President’s desk as possible in the next two years, starting with many bills which passed [the House] with bipartisan support—only to gather dust in a Democratic-controlled Senate that kept them from ever reaching the president’s desk.”   Not surprisingly, McConnell and Boehner’s agenda includes voting on the proposed Keystone XL pipeline. While not specifically mentioned in early comments from leadership, it is likely that several bipartisan energy issues will be raised again, including the renewable tax credits and the Shaheen-Portman energy efficiency bill.  It is also likely that the oil export ban, the EPA’s proposed Clean Power Plan, and other proposed regulations and expansions of oil and gas drilling on federal lands will receive attention in the new Congress. 

Within the renewable fuels industry, leaders were cautiously optimistic regarding the outcome of the election, reiterating that biofuels have historically enjoyed bipartisan support.  In addition to being supported during a democratically controlled Congress, biofuels were included in the 2007 Energy Independence and Security Act, which was signed into law by President George W. Bush.  Renewable fuels did enjoy support on the campaign trail from both parties, particularly in the Midwest. Brian Jennings, executive vice president of the American Coalition for Ethanol, expressed caution, stating, “Now is the time we have to hold newly-elected officials accountable for the promises made on the campaign trail.”  And while for the most part Midwestern Senators state they are strongly in support of biofuels, it is less clear in other states with competing interests.  In states with strong ties to the oil and gas industry, and ‘big food,’ making the case for biofuels has been more difficult, despite rising corn crop yields, falling corn prices, and advancements in renewable fuels.   

Committee chairs wield considerable power in their ability to get legislation to the floor. Sen. Boxer (D-CA), chair of Environment and Public Works (EPW), has been a staunch supporter of renewable energy and the Renewable Fuels Standard (RFS).  Just last month, she sent a letter in support of the RFS to Obama in October, along with Sen. Markey (D-MA).  In the new Congress, Sen. Inhofe (R-OK) will most likely assume chairmanship of EPW, which oversees the EPA.  Senator Inhofe has been a vigorous climate denier and a vocal opponent to the EPA’s regulation of the energy industry. 

In early 2014, Inhofe expressed interest in repealing the RFS, and instead focus on expansion of domestic oil and gas drilling.  Inhofe wrote that the RFS should be repealed, “allow[ing] ethanol and other biofuels to compete on a level playing field with all other transportation fuels”— a common refrain of renewable energy foes.  Ironically, Inhofe makes no mention of the $4.8 billion in taxpayer funded subsidies to the oil and gas industry each year.  But it is clear, without the support of the EPW Chairman, challenges to the RFS will be brought forward.  In looking over previous anti-RFS legislation from the 113th Congress, a few patterns emerge. It is likely that efforts to modify the RFS could include capping ethanol at ten percent of fuel volumes, blocking or hindering mid-level blends, and possibly cuts to corn ethanol from the mandate.  And while many environmentalists would like to see the focus shift solely to advanced fuels, such as those sourced from agricultural or other wastes, corn ethanol has provided the marketplace for the nascent advanced fuels categories. Indeed, many cellulosic plants coming online today are bolt-on technologies to existing corn ethanol facilities.  Therefore, these two industries’ fates are intrinsically tied together and are both important to the future of biofuel and biobased products and our ability to move away from oil dependency.

What remains to be seen is if any of these bills could achieve the 60 votes needed to overcome a filibuster and make it to a vote on the Senate floor.  Hopefully, it will not come to that point; the importance of support beyond the ‘corn belt’ cannot be ignored. The industry itself has already had ‘1000 cuts’; distribution has been severely limited by infrastructure issues created by the oil and gas industry; public perception issues still loom large, and a long-delayed 2014 renewable volume obligates (RVOs) has chilled industry investments in new technologies and feedstocks.  The result is an industry that is increasingly looking abroad for investor certainty, as China, South America and Europe still remain bullish on renewable fuels.  Therefore, it would be unwise for the industry to rely on historic support.  Instead, the case needs to be made as to why ethanol and other biofuels are important to every district and state, by lowering prices at the pump, reducing reliance on oil, creating jobs and a globally competitive industry, and lowering exposure to toxic tailpipe emissions. 

For more information see: 

Energy Policy Seen Ripe for Compromise in GOP Congress, Bloomberg

Will Ethanol Ride the GOP Wave?, Agriculture.com

Sen. Inhofe, denier of human role in climate change, likely to lead environment committee, The Washington Post 

Congress Should Repeal the Renewable Fuel Standard, Washington Times