Proposed RFS Changes Weighed At EPA Hearing

The renewable fuel, livestock and petroleum lobbies take on big day of debate on Renewable Fuel Standard volume obligations

Published on: Dec 6, 2013

The policy, which Goodlatte argued creates an artificial market for corn ethanol, is also based on the assumption that gasoline use will continue to rise into the future, argued Bob Greco of the American Petroleum Institute. However, Greco said, the opposite is occurring.

Greco also said there are concerns about vehicle and retail infrastructure compatibility with the use of ethanol blends higher than 10%, which is why the "blend wall" is API's main concern.

The blend wall refers to the point at which the amount of ethanol produced will be too large to blend into the available fuel supply without raising blend levels.

"Left untouched, the statutory mandates could cause fuel rationing … and lead to a 770 billion decrease in U.S. GDP," Greco said, referencing a 2012 API-commissioned NERA consulting study.

Though many referenced concerns of engine compatibility with ethanol blends higher that 10%, National Association of Convenience Stores' Director of Government Relations Paige Anderson said her group was concerned about consumer preferences and environmental impacts.

Though Anderson stressed that NACS does not support complete RFS repeal, she said the proposed volumes were a positive development due to lack of interest in higher fuel blends.

"We sell what the consumer wants," Anderson said, noting that consumers are getting information that E15 and E85 is bad.

"The majority of our stores and retailers are not seeing the demand that we were hoping they would see with higher blends of ethanol," Anderson said.

That outlook resonates with comments from other groups, which suggested that instead of the EPA mandating ethanol production, the market should decide how much to produce and when to produce it.

"We are not against corn ethanol, we are not against ethanol. What we are against is the hand of government directing this market and giving it false signals," said Mike Brown, National Chicken Council President, suggesting legislative action to repeal the RFS.

"Let the free market work – come on in, the water's warm," Brown said

Each person who testified Thursday has submitted written comments to the EPA regarding the RFS rollback. Comments will be accepted until Jan. 28.