House Energy Committee Examines Reforms to Renewable Fuel Standard Program

Oct 31, 2019

by ASME.org

The House Committee on Energy and Commerce (E&C) Subcommittee on Environment and Climate Change recently held a hearing on the Renewable Fuel Standard Integrity Act of 2019, legislation which would impose an annual deadline of June 1 for small refineries to submit petitions for exemptions from renewable fuel requirements. The hearing examined concerns associated with insufficient transparency in the small refinery exemption program, as well as the Environmental Protection Agency’s (EPA) recent proposal to adjust the 2020 renewable volume obligations under the Renewable Fuel Standard program (RFS).
 
Congress established the RFS program in the Energy Policy Act of 2005 and later expanded the program through the Energy Independence and Security Act of 2007. The program aims to expand the renewable fuels sector in the United States, increase the volume of renewable fuels in the U.S. fuel mix, curb greenhouse gas (GHG) emissions, and reduce dependence on imported oil. While the program has enjoyed bipartisan support over the years thanks to supporters ranging from corn states to climate activists, the hearing showed divides from the outset, with Energy and Commerce Full Chairman Frank Pallone (D-NJ) titling the hearing, “Protecting The RFS: The Trump Administration's Abuse Of Secret Waivers.” The Chairman also issued a memorandum leading up to the hearing, specifically referencing H.R. 3006, the “Renewable Fuel Standard Integrity Act Of 2019” and detailing why he believes this proposed legislation is beneficial to both the refining industry and the biofuels industry. The proposed legislation would set a deadline for refineries to apply for waivers from annual biofuel-blending mandates, making it easier for EPA to incorporate existing waivers into its decisions on annual biofuel quotas.
 
Subcommittee Chairman Paul Tonko (D-NY) opened the hearing stating that EPA’s actions are no longer aligned with DOE’s recommendations and that H.R. 2006 is needed to add transparency to the Small Refinery Exemption (SRE) program so that the RFS can have the impact it intended. Subcommittee Ranking Member John Shimkus (R-IL) opposed the chairman’s views, and instead suggested moving away from the RFS and instead transition to a national octane standard, which he argued would bring more value to consumers.
 
Hearing witnesses include:
  • Geoff Cooper, President and CEO, Renewable Fuels Association
  • Gene Gebolys, President and CEO, World Energy
  • Kelly Nieuwenhuis, President, Siouxland Energy Cooperative
  • Chet Thompson, President and CEO, American Fuel & Petrochemical Manufacturers
 Mr. Cooper spoke in length about the success of the RFS and stated that “because the RFS has succeeded in replacing petroleum with cleaner renewable fuels, the policy has come under fierce attack from the incumbent fossil fuel industry and its supporters.” He ended his testimony by encouraging Subcommittee members to support H.R. 2006, as it would enhance transparency and accountability in the SRE program.
 
Mr. Gebolys too criticized the EPA’s recent proposal to estimate small refinery exemptions in 2020, stating that “EPA’s massive expansion of waivers is destroying demand for billions of gallons of biomass-based diesel” and that the impact on the industry is devastating, forcing his own company to close three facilities, impacting more than 100 workers.
 
Mr. Nieuwenhuis shared his strong concern for the lack of transparency currently associated with the SRE program and showed support for H.R. 2006 as it increases accountability. In his testimony he states that this new legislation would prevent “refineries from claiming certain information submitted to obtain an SRE as confidential business information” and give” the public greater insight into the refiners that receive a waiver and why.”
 
Mr. Thompson challenged the views of three aforementioned witnesses and offered his opposition for the proposed legislation, sharing why he felt that the EPA’s current treatment of the SRE program is beneficial to the industry. He asks the Committee to “take a skeptical view towards claims that EPA’s management of the RFS and ancillary programs have harmed the biofuels industry,” citing that the “Administration’s approach has supported both lower compliance costs and record domestic biofuel consumption.”
 
Witness testimony, along with a recording of the hearing, is available on the Committee’s website.

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