RFS Roundup:  Rep. Goodlatte Gives Helping Hand to Oil Industry, Again

On February 4, Rep. Goodlatte (R-VA), offered H.R.703, ‘To repeal the renewable fuel program of the Environmental Protection Agency’.  The bill has 40 Republican co-sponsors.  The same day, Rep. Goodlatte, along with Rep. Womack (R-AR), Welch (D-VT) and Costa (D-CA) also reintroduced H.R.704, an RFS repeal 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’.  H.R. 704 has 35 co-sponsors, 31 Republicans and 4 Democrats.  Previously introduced in 2013, the bill has been referred to the House Committee on Energy and Commerce, chaired by Rep. Upton (R-MI). 

Upton has wavered on renewable fuels in the past, but aides have stated that the Chairman feels that 2015 is the time to reform the Renewable Fuel Standard (RFS), the federal regulation that calls for the production and use of ethanol, advanced ethanol and biodiesel.  Parties on both sides have become increasingly frustrated with the EPA’s delay of 2014 fuel blending levels.  Therefore, it’s possible that this bill could come to a vote. The bipartisan H.R. 704 would cap ethanol blending at 10 percent (E10), the level already in the fuel supply, and eliminate the mandate for corn-based ethanol.  Ironically, this ‘reform’ would probably have the opposite effect.  Killing the marketplace for additional ethanol and maintaining E10, refiners will turn to the cheapest, most established source of ethanol – corn based ethanol.  The oil and gas industry would like to maintain blending at 10 percent, since ethanol is a cheaper form of octane than gasoline aromatics. 

Additionally, the uncertainty around advanced cellulosic fuels (such as those sourced from agricultural residues) has created a chilling effect on the RFS and advanced biofuels. As a result, big early investors in the American cellulosic ethanol industry, like Abengoa, DuPont and DSM are already looking outside the United States to build additional advanced ethanol plants. Tom Buis, CEO of Growth Energy, commented that the bill would kill the advanced fuels economy in an effort to maintain the oil industry’s control over the marketplace, stating “Any changes to the program would have a devastating effect, creating uncertainty in the marketplace and halting investment in new technologies for biofuel production.”

Goodlatte has repeatedly called out the RFS for being an “unworkable policy” that “means added costs and less money for other purchases” for American families.  Goodlatte has chosen to ignore the fact that transportation, packaging and processing (all heavily fossil-fuel reliant) are the largest portion of food prices, and that ethanol blending has actually lowered the retail cost of gasoline, particularly when gasoline prices are high.  According to Jeremy Funk, Communications Director for Americans United for Change, a liberal lobbying group, “The Renewable Fuel Standard pumps nearly $2 billion into Virginia’s economy every year and puts thousands of people to work … Goodlatte’s legislation is nothing but another handout for the big oil industry that already reaps $4 billion in pointless taxpayer subsidies every year.”

According to Citizens United for Change, Goodlatte has received at least $128,000 in campaign contributions from the oil and gas industry. In 2014, Goodlatte held an anti-RFS event on Capitol Hill the day after an oil tanker train derailed in his district, causing the James River, Richmond Virginia’s source of drinking water, to catch on fire. 

For more information see: 

Four U.S. lawmakers begin second effort at biofuels reform bill, Reuters 

Anti-RFS bill in US Congress draws sharp fire from biofuels industry, Biofuels Digest

Will Biofuels Be Foreign Investment Golden Egg or Cooked Goose?, Roll Call 

Oil tanker train derails in Lynchburg, Va., triggering fire and spill, The LA Times