A third key congressional committee has entered the debate over the Renewable Fuel Standard, calling for comment on a series of questions and issuing a "white paper" detailing concerns about the biofuels mandate and some of the proposed solutions for increasing ethanol use.
The highest ranking Republican and Democrat members of the House Energy and Commerce Committee late Wednesday released the first of a planned five white papers on fuel policy and sent a series of questions to groups on all sides of the issue. The influential committee is expected to hold hearings on the issue later this year, but so far none have been scheduled, a spokesman said Thursday.
"It has been more than five years since the RFS was last revised, and we now have a wealth of actual implementation experience with it," the bipartisan policy document states. "In some respects, the RFS has unfolded as expected, but in others it has not. Several implementation challenges have emerged that received little if any consideration prior to passage of the Energy Independence and Security Act of 2007. Furthermore, the overall energy landscape has changed since 2007. It is time to undertake an assessment of the RFS."
The Energy and Commerce Committee is the third major congressional group to raise the issue of the RFS.
Members of the Senate Environment and Public Works Committee and the Senate Energy and Natural Resources Committee have expressed concern over the rising cost of renewable fuel credits, known as RINs, that refiners use to show compliance with the RFS. Senator Ron Wyden, Democrat-Oregon, chairman of the Senate ENR, has said he will hold hearings later this year on rising gasoline prices, including an examination of the RINs issue.
The House Energy and Commerce Committee's first white paper raises questions about the "blend wall." While federal renewables targets have risen, gasoline demand has flattened and created a "blend wall" where refiners have to buy credits if they cannot blend more ethanol into the gasoline pool.
The limits to blending arise from the fact that only a 10% blend of ethanol and gasoline is currently approved for all vehicles. A higher, 85% blend, known as E85, can only be used by special "flex fuel" vehicles. The Environmental Protection Agency has approved the use of a 15% blend, known as E15, for passenger vehicles made in 2001 or later and for light-duty trucks.
But E15 has yet to catch on because of infrastructure problems at retail stations as well as liability concerns, the chief of which comes from the possibility that a consumer with an older vehicle might accidentally buy E15. The higher blend is also not approved for marine engines or small engines that power lawn motors, chain saws and similar appliances.
"EPA's partial waiver and MMP process has made it technically possible but potentially difficult for America's 160,000 gas stations to begin carrying E15," the committee's white paper states.
An MMP is a misfueling mitigation plan, which companies desiring to sell E15 must file with the EPA to show steps they are taking to prevent misfueling. Those could include offering the fuel at a separate pump or using warning labels on blender pumps that offer consumers a range of ethanol blends.
"The RFS does not require any particular gas station to sell E15 or any consumer to use it, but unless many do, the evidence suggests that it will not be possible for the nation as a whole to remain in compliance with the targets in the RFS," the white paper states.
The committee poses 11 questions, including what is the likely impact, if any, on retail gasoline prices if the blend wall is hit.
Other questions include: "Could the blend wall be delayed or prevented with increased use of E85 in flexible fuel vehicles? What are the impediments to increased E85 use? Are there policies that can overcome these impediments?"
The committee also wants comment on the existing legal authority the EPA has to alter the RFS volume requirements. The EPA has interpreted that authority narrowly in the past, the white paper states, refusing, for instance, to change the RFS volumes in response to higher corn prices resulting from a drought across the Midwest.
Answers are due by April 5. The committee said the remaining four white papers will deal with other "economic, environmental and policy issues."
