House Republicans plan to put fuel standard on trial in next Congress

House Republicans plan to put the renewable fuel standard on trial next Congress, a House Energy and Commerce Committee aide told The Hill.

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Committee staff is gearing up for hearings on the subject, citing recent concerns from the AAA motor club, automakers and the oil industry that the rule is pushing a high-ethanol fuel blend onto the market they say will damage cars.

“If Congress observes the data, I think they will conclude we are putting the consumer at risk currently,” said AAA CEO Robert Darbelnet.

He said his staff has been advised about potential hearings on the fuel standard and E15, the fuel blend comprised of 15 percent ethanol compared with the standard 10 percent.

The biofuels industry has heard the war cries growing louder in recent weeks, and is prepared to do battle.

“I say bring it on. We’re going to win this fight,” Renewable Fuels Association CEO Bob Dinneen told The Hill recently.

The renewable fuel standard requires refiners to blend 36 billion gallons of ethanol into traditional transportation fuel by 2022.

To meet accelerating blending targets, refiners will need to start pumping out fuels with higher ethanol concentrations.

The biofuels industry will therefore increasingly rely on E15 fuel. Refiners are expected to break through that “blend wall” beginning in 2014, which worries AAA, automakers and oil-and-gas lobby shop the American Petroleum Institute (API).

The Environmental Protection Agency (EPA) determined earlier this year that cars could fill up with E15 with no adverse effects as long as they were made in the 2001 model-year or later.

But AAA and the auto industry argue E15 fuel is dangerous for cars. They say EPA erred in only testing the fuel’s effects on emissions control systems, rather than the entire car.

AAA, along with API, says it is concerned about consumers. Darbelnet noted 12 major manufacturers can or will void warranties for E15-related damage on cars made before the 2012 model years.

“You can’t get around that. It’s not just one or two manufacturers. It’s all of them,” Darbelnet said.

Darbelnet said EPA should suspend all E15 sales — it currently is sold at just a handful of gas stations — to work on a solution with automakers and fuel retailers.

“If we’re focused on what we think should come out of the hearings, I see it as an opportunity to raise policymakers’ awareness about the concerns that have been made around E15,” he said.

API recently changed its tack and is now calling for a full repeal of the fuel mandate.

Bob Greco, API’s downstream group director, said he believes this year’s drought has incited more congressional opposition to the fuel mandate.

Meat producers contend the mandate for corn ethanol production choked off supplies they needed for feed, driving up prices. The EPA ruled the drought — not the fuel rule — was responsible for the price increase.

A potent opposition to E15 can be built from those lawmakers concerned about the feed vs. fuel issue, and those worried about the blend’s effects on cars, Greco said.

“I think there’s going to be a lot of interest,” Greco told The Hill. “There’s a growing chorus.”

Dinneen insisted any congressional hearings would exonerate the claims made against E15 and the fuel mandate.

“Hearings on the RFS (renewable fuel standard) are not necessary, but should they proceed, we believe the hearings would shine a spotlight on the success of the RFS in terms of energy independence, job creation and environmental benefits. It would quickly become clear there is no need to legislate changes to the RFS which is working exactly as intended,” Dinneen said in a statement to The Hill.

Dinneen has said the fuel is safe and will not damage cars, calling it the most tested fuel in EPA history.

Sensing an upcoming assault on the fuel rule, the biofuels industry has rallied in recent months to defend the mandate.

The industry says maintaining stability is vital for attracting investment in “advanced” biofuels made from non-edible feedstock, which are just now coming online in commercial volume.

But groups like API are determined to tear it down. Greco said last month that API is “bringing our resources to bear” to repeal the mandate in the next Congress.

Dinneen said that effort is designed to protect Big Oil’s market share.

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“Ultimately, this probably isn’t a fight about corn ethanol. Ultimately, this is a fight about the next generation [of biofuels]. The ethanol industry has become a tremendous success. We’ve become a victim of our own success because we’ve awakened the oil companies,” Dinneen said.

Tom Buis, president of biofuels industry group Growth Energy, said the industry is “talking to everybody, and continually,” about the need to preserve the fuel mandate.

Buis said the policy has helped boost rural economies, and that the next generation of biofuels is poised to do the same. He said lawmakers from farming states and districts would likely defend the standard.

Still, with advanced biofuels starting to reach commercial production levels, Buis said he has made no mistake that the oil industry will take the offensive — and Capitol Hill could serve as the battleground.

“Yeah it is a fight. They don’t want to give up their market share,” Buis said. “Of course we’re going to be ready. You prepare for the worst, and hope for the best.”