Enacting a Renewable Fuels Standard:
Economic, Energy, and Environmental Implications

Thursday, March 27, 2003
2:00 – 3:30 p.m., 2318 Rayburn House Office Building

           The Environmental and Energy Study Institute (EESI) hosted a Congressional briefing on recently introduced legislation (S. 385, H.R. 837) to establish a Renewable Fuels Standard (RFS). As proposed, the legislation would require the use of 5 billion gallons of renewable fuel, such as ethanol and biodiesel, nationwide by 2012 and an equivalent percentage thereafter.  Each gallon of ethanol derived from cellulosic biomass would be counted as 1.5 gallons of renewable fuel to spur the development of a cellulosic ethanol market.  In addition, the legislation would immediately repeal the federal oxygenate requirement for reformulated gasoline, and ban the fuel additive MTBE within four years of enactment.  Several states have already passed MTBE bans after experiencing groundwater contamination associated with the fuel additive.

Supporters of the RFS highlight the need to find renewable energy alternatives, as the United States currently imports over half of its petroleum, two-thirds of which is consumed in the transportation sector.  Proponents of the RFS also emphasize the environmental benefits of biofuels, which are generally non-toxic and readily biodegradable.  In addition, both ethanol and biodiesel have been shown to significantly reduce the emission of greenhouse gases when compared to petroleum fuels.  Finally, many emphasize the economic development and job growth a strong biofuels industry could create.  Opponents of the RFS remain skeptical about the ability of biofuel producers to replace the supply gap that will be created by banning MTBE.  Some have questioned whether ethanol can be cost competitive in regions of the country that lack locally based production facilities.

An expert panel of speakers provided an overview of the proposed Renewable Fuels Standard, and its potential energy supply, economic development, and environmental quality implications.  The panel included:

Briefing Panel:

Ø      Michael Whatley, Staff Director, Senate Subcommittee on Clean Air, Climate Change and Nuclear Safety

Ø      Ken Colburn, Executive Director, Northeast States for Coordinated Air Use Management (Presentation)

Ø      Dan Dorman, Member, Minnesota House of Representatives

Ø      Alice Durkee, VP New Business Development, Masada Resource Group (Presentation)

Ø      Dr. Edward Murphy, Downstream General Manager, American Petroleum Institute (Presentation)

Click here for a summary of key issues discussed at the briefing.

For more information please contact Josh Alban at 202-662-1885 or jalban@eesi.org.