Renewable-Fuels Standard Gets Bipartisan Attention
For the first time since President Obama won the White House in 2008, House Energy and Commerce Committee Chairman Fred Upton, R-Mich., and ranking member Henry Waxman, D-Calif., are working together on a controversial energy policy: the renewable-fuels standard.
Staffers for both lawmakers are working together on a series of white papers looking at the concerns busineseses and interest groups have about the mandate, which was established in 2005 and requires increasingly large amounts of biofuels each year to be blended with gasoline.
The mandate, which is administered by the Environmental Protection Agency, came under intense scrutiny from both Republicans and Democrats in the wake of the record-setting drought during the summer of 2012, which sent corn prices soaring. Refineries that are required to blend the biofuels with gasoline rely primarily on corn-produced ethanol to meet the standard. More-advanced biofuels made from other products are not coming to market as quickly as the 2005 law had envisioned. Moreover, the boom in oil and natural gas around the country in the last five years has been the main driver getting the U.S. closer to weaning itself off foreign oil, which was the original intent of the standard.
Waxman’s chief concerns center on the impact that corn-based ethanol could have on efforts to tackle global warming. Some reports have found that gasoline blended with corn-based ethanol is no better at reducing greenhouse-gas emissions than gasoline alone. He is also aware of the legal liability automakers could incur if engines are unable to run on higher blends of ethanol.
Waxman has never been a big fan of corn ethanol. He voted against the energy bill in 2005 that initially created the mandate but voted for a 2007 measure that strengthened the mandate’s goal of moving toward advanced biofuels such as cellulosic ethanol, which doesn’t use corn and has a lower carbon footprint.
Upton supported the initial creation of the mandate as part of the 2005 bill as well as the measure two years later that strengthened it. Sources familiar with Upton’s current thoughts on the policy say the Republican is more inclined to oppose it, given the GOP’s growing hostility to federal mandates and the resurgence in oil and natural-gas production that has helped get the U.S. closer than ever to the elusive goal of energy independence. Upton must also ensure that any movement on the standard doesn’t divide an already splintered conference. Rep. John Shimkus, R-Ill., who works closely with Upton as the chairman of the Environment and the Economy Subcommittee, is a big proponent of ethanol (Illinois produces the third-highest amount of ethanol in the country).
The first bill out of the gate on this issue in the 113th Congress, introduced in early April by a bipartisan group of House members, would eliminate the mandate altogether. The bill is very unlikely to become law or even to be considered in its current form in the committee, but it sets a marker for Upton and Waxman to draft other, less-sweeping legislation that has a better chance at passage. Other possible legislative—or administrative—fixes include changing the levels of ethanol and advanced biofuels the mandate requires.
Chances of Congress passing any of these reforms this session are slim, but by releasing white papers and holding hearings—likely by this summer—lawmakers are laying the foundation for a robust debate that could someday lead to reform.
