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February 26, 2016
On February 24, the Senate Environment and Public Works Committee held a hearing, ‘Oversight of the Renewable Fuel Standard.’ The hearing provided familiar fodder on the Renewable Fuel Standard (RFS), the implementation of which has been plagued by delays, controversy and lawsuits over the past several years. Now that the EPA has released renewable fuel volumes for 2014, 2015 and 2016 (and biodiesel volumes for 2017), lawmakers on Wednesday looked towards the long-term health of the program and its fate post-2022.
Despite the disinformation on the presidential campaign trail, the RFS does not sunset in 2022. Rather, Congress did not set additional fuel volumes past 2022. At that time, the full implementation of the program, including volume requirements, will be handed over to the EPA. Given the delays surrounding the RFS recently, lawmakers on both sides of the aisle (and those for and against the RFS) are uneasy with the prospect of handing over the program to EPA.
Further complicating the process up to and past 2022 is the shortfall in cellulosic ethanol production. During his testimony at the hearing, Howard Gruenspecht, the Deputy Administrator of the Energy Information Administration, placed the total biofuel shortfall at 18 billion gallons by 2022, largely caused by lower than expected volumes of cellulosic ethanol production. The renewable fuels industry argues that EPA’s management of the program has exacerbated the shortfall in cellulosic biofuel production. According to the renewable fuels industry, EPA’s invocation of the E10 ‘blend wall’ as a reason to lower renewable fuel volumes has hampered the industry's growth.
According to Sen. Barbara Boxer (D-CA), “the biofuels industry said it can produce more biofuels than EPA provided for in the final rule, issued on November 30, 2015. And this final rule undercuts investments in biofuels – particularly in cellulosic biofuels.” When Janet McCabe, Acting Assistant Administrator for EPA's Office of Air and Radiation, stated that the new volumes set by EPA allow significant growth for the industry, Boxer quipped, “so, basically you disagree with the industry?”
Currently, there are several pending lawsuits against the agency’s interpretation of the statute, with the renewable fuels industry arguing that the agency’s interpretation of ‘adequate domestic supply’ does not give EPA authority to lower fuel volumes. Several oil industry groups have also sued the agency, arguing that renewable fuels hurt consumers and engines.
No consensus appeared on the future of the law, with McCabe stating that she cannot speculate on how a future Administration will oversee the program.
For more information see:
Oversight of Renewable Fuel Standard, Senate Committee on Environment and Public Works
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