June 6, 2013

Yesterday the Energy Policy, Health Care and Entitlements Subcommittee (Chairman Lankford, R-Okla.) of House Oversight and Government Reform Committee held a hearing titled “Up Against the Blend Wall: Examining EPA’s Role in the Renewable Fuel Standard.” Witnesses were Christopher Grundler, Office of Transportation and Air Quality; Jack Gerard, API; Lucian Pugliaresi, Energy Policy Research Foundation Inc.; Joel Brandenberger, National Turkey Federation; and Jeremy Martin, Union of Concerned Scientists.

Chairman Lankford noted that there is evidence that the RFS is not meeting the original bi-fold purpose: “to move the United States toward greater energy independence and security,” and “to increase the production of clean renewable fuels.” Further, Lankford points to the market change since 2005 and 2007, the current domestic energy boom and he stated that corn-based ethanol may not be any cleaner than gasoline and has other environmental consequences, such as using more water for producing corn-based energy than refining gasoline. EPA’s Christopher Grundler noted that as the volume requirements of the RFS program increase, additional volumes would need to be used in higher blend levels, such as E15 or E85. EPA is considering the potential impacts of the blend wall and the agency is reviewing comments submitted in response to its proposed rulemaking for the 2013 RFS volume standards. API’s Jack Gerard testified that the RFS is “irreparably broken and posed to do significant harm to consumers, the economy and the nation’s fuel supply.” While Lucian Pugliaresi stated that his organization’s research found that near-term increases of blending over the blend wall would only be possible by encouraging consumers to buy E85 and shifting that cost onto E10, which would increase the cost of E10 by 36 cents per gallon by 2022.

American Fuel & Petrochemical Manufacturers (AFPM) President Charles T. Drevna released this about yesterday’s hearing: “EPA needs to take an honest look at the marketplace and the nation’s ability to consume the mandated volume of biofuels. Existing engine technologies, compatibility with fuel delivery infrastructure, and consumer impacts are real world circumstances that require EPA to reduce the 2013 Renewable Volume Obligations (RVOs) for all four renewable fuel categories to more realistic levels. If left unaddressed, this pernicious policy will continue to adversely impact consumers at the grocery store and at the pump, as well as threaten engines on everything from automobiles to boats and lawnmowers.” Drevna noted further that even if the proposed renewable fuels RVOs were attainable, EPA acts in bad faith by continually missing the statutory deadline to set required levels for the following year.

In a statement about the hearing, Bob Dinneen, President and CEO of the Renewable Fuels Association, stated that the National Turkey Federation testimony that turkey production has decreased because of ethanol production is inaccurate. That, “According to numbers from the USDA, turkey production has

increased, and …It is flat out wrong that not a single representative from the ethanol industry was invited to speak or to present facts on the proven success of the RFS in reducing our dependence on foreign oil, lowering gas prices, improving the environment, or creating jobs and economic opportunities for rural America. This is a bit like asking a roomful of matadors if the bull should live.”

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