Energy and Commerce Republicans vowed to tackle the increasingly complicated EPA standard for biofuel use as part of their 115th Congress agenda. After almost two years of negotiations, the key subcommittee chairman responsible for the effort says they are close to releasing bill text when the House returns from recess.
That timing would appear to be too late for passage this Congress. But it may help shape the debate for the next one as lawmakers begin to take a more serious look at the controversial Renewable Fuel Standard, over which Congress loses substantial oversight in 2022.
Those efforts may also be doubly complicated by the Trump administration. Oil industry advocates ramped up rhetoric last week in response to rumors the EPA may seek to remove regulations that restrict the use of motor fuel made of 15 percent ethanol during the summer months – a key policy lever in Congress’ attempt to satisfy corn state and oil state lawmaker demands.
But according to Rep. John Shimkus, R-Ill., the chairman of the Environment Subcommittee, Republicans are in a position to have their staff construct bill language for release when lawmakers return from their October break.
“In other words, put language together over the break to drop something once we get back to either see if there is a sweet spot or kind of set the debate for the next Congress,” Shimkus told CQ. He added that his hope is to “make it palatable enough that at least there is some optimism that you might be able to do something. It’s very hard.”
The RFS program, established by Congress to mandate blending of certain amounts of biofuels like ethanol in the nation’s transportation fuel mix, has become a political headache for Republicans. With lawmakers split on the program more along regional lines than traditional partisan ones, the policy and its implementation has prompted calls for an overhaul to appease concerns from both corn state lawmakers who want to see wider ethanol use, and oil state lawmakers aiming to protect their share of the fuel market.
As part of the law establishing the standard, Congress set target thresholds for the annual amount of corn- and other plant-derived fuel that should be added into the mix. Those targets expire after 2022, when the EPA will be in control of how much biofuel is required, introducing some uncertainty into how the program will move forward.
“We still have RFS we are trying to work out,” said Energy and Commerce Chairman Greg Walden, R-Ore. “In 2022, EPA gets all the authority. That might just bring people to the table that don’t want to spend a lot of time at the table now. We have had good discussions.”
Shimkus has teamed with Rep. Bill Flores, R-Texas, to find a solution that both sides can support. Flores, along with Rep. Peter Welch, D-Vt., introduced legislation that would direct the EPA to set the maximum volume of ethanol blended into the transportation fuel supply at 9.7 percent – a starting point for negotiations.
That would be a lower target than what is currently in law, angering the ethanol lobby, but it is widely expected that any comprehensive RFS overhaul bill would also include a provision to enable the year-long sale of E15.
The Trump administration is expected to issue a decision in the near future – likely lifting the summer ban on the sale of E15. Iowa Sen. Charles E. Grassley said in a Tuesday call with reporters that he has heard of conversations indicating that the White House is working on a decision, but that he has not heard anything “very definitive.”
Such an order may diminish the urgency for an RFS overhaul on the part of corn-state lawmakers.
“If we could have moved our legislation earlier, [E15] would be enshrined in code, and people understand that,” Shimkus said. “But when you do it from the EPA, then you don’t have the other benefits of language that mitigates the refiners’ concerns or anybody else. We are trying to get to that middle ground.”
Frank Macchiarola a director at the American Petroleum Institute, told reporters in a Friday call that he expects the EPA to issue a decision on E15 sometime in October. He said a waiver of the restriction would be “a flawed, anti-consumer policy.”
The petroleum group, which represent more than 600 oil and gas companies, strongly opposes higher ethanol blends and has mounted a campaign to push back against calls for lifting E15 restrictions.
The EPA has barred the sale of E15 between June 1 and Sept. 15 because it has been found to contribute to increased summer smog.
Under pressure from biofuel groups and Midwestern lawmakers including Grassley and Sen. Joni Ernst, whose state of Iowa is one of the biggest beneficiaries of the RFS, President Donald Trump in May announced that it would take steps to allow for the year-round sale of E15. That decision came after a series of meetings with lawmakers and industry representatives at the White House.
“We understand that the president wants to find a solution but we also understand that what the EPA is [proposing] is failing in regards to finding a win-win situation,” Macchiarola said. “Our view is that going above 9.7 percent of ethanol creates a series of cascading problems.”
The group, which would like to see the Renewable Fuel Standard expire in 2022, has argued that many cars are not compatible with higher ethanol blends.