Industry reacts to RFS Reform Act introduced in House

By Holly Jessen | April 10, 2013

The ethanol industry reacted swiftly to the so-called RFS Reform Act, legislation introduced April 10 in the U.S. House of Representatives, which they said would gut the renewable fuel standard (RFS).

The bill, introduced by Rep. Bob Goodlatte, R-Va., Rep. Jim Costa, D-Calif., Rep. Steve Womack, R-Ariz., and Rep. Peter Welch, D-Vt., would eliminate the requirement for corn-ethanol and put a 10 percent cap on the amount of ethanol that can be blended into gasoline. “Renewable fuels play an important role in our energy policy but should compete fairly in the marketplace,” the group said in a prepared statement. “This legislation will bring the fundamental reform this unworkable federal policy needs now.”

Growth Energy pointed out that the bill does nothing to address how the nation will achieve energy independence. Rather, it’s a gift for special interest groups thinking only of protecting their profits. CEO Tom Buis explained during an April 10 conference call that producer members from Colorado, Iowa, Illinois, Kansas, Missouri and Nebraska were in Washington, D.C., for meetings with legislators on April 10-11, talking about the importance of the RFS and E15. “Obviously the renewable fuel standard is very important for our industry and it has come under some intense attacks, often based on misinformation,” he said, adding that moving forward to the use of higher ethanol blends was also key.

Also on the call were retired Gen. Wesley Clark and Jeff Broin, co-chairmen of the Growth Energy board. Broin called efforts to repeal the RFS a Hail Mary pass that, if successful, would deny motorists access to cheaper and more environmentally friendly ethanol. Poet LLC, which operates 27 grain-ethanol plants, is an example of first generation ethanol producers working toward second generation cellulosic ethanol production. Poet-DSM Advanced Biofuels LLC, is a joint venture between Royal DSM and Poet, is working to build a commercial demonstration plant co-located with an existing corn-ethanol plant in Emmetsburg, Iowa. “We can’t build these facilities if the RFS goes away, and we can’t build these facilities if we don’t have higher blends of ethanol,” he said.

Clark talked about the RFS as the one energy policy passed in his lifetime that’s actually working. Retaining the RFS would help build on the great start of the first generation ethanol industry, to help the nation achieve energy independence and bolster national security. “We’re the little guys on the block, we’re the right people at the right time, and we’re fighting the classic American underdog fight,” he said. “We’re going to get into this marketplace and we’re going to help make America freer and cleaner and more prosperous in the process.”

The American Coalition for Ethanol chimed in with a statement from its Executive Vice President Brian Jennings, who called the RFS Reform Act “pandering to special interests who feel entitled to cheap corn and expensive oil forever.” The good news is, he said, the majority of legislators recognize that the RFS is working. “Killing the corn ethanol provisions of the RFS and prohibiting consumers from having the option to buy E15 don't constitute 'reform,' they are heavy-handed government regulations coming from members of Congress who apparently don't like how the RFS ensures competition in the fuel market,” he said.

Bob Dinneen, president and CEO of the Renewable Fuels Association, said the motivation for the bill was “backwards, silly, circular logic.” Perhaps, he suggested, the bill should have been introduced on Halloween because it will ultimately scare biofuels investors away due to policy uncertainty. “The authors insist they're not anti-biofuels, but the bill guts the only program that has successfully opened the market to these new technologies, lowering our dependence on imported oil and reducing the consumer price of gasoline,” he said. “The authors state they want a ‘free market’ for energy, but they do nothing to end the billions in subsidies to Big Oil and they deny market access to E15. The authors portend to retain the mandate for new cellulosic and advanced biofuels, but the bill handcuffs the commercialization of these fuels by removing the forward-looking, market-driving provisions of the original legislation.”

The Fuels America coalition also sent out a statement condemning the anti-RFS legislation. “Instead of instead of protecting oil companies, Congress should address what are actually hurting America’s families and businesses: high gas prices and dependence on foreign oil,” the statement said. “Continuing to develop our renewable industry is the only way to address both. Rep. Goodlatte’s bill would keep gas prices at the mercy of global oil markets and rob consumers of clean, competitive fuels.”

Brooke Coleman, executive director of the Advanced Ethanol Council, gave Goodlatte points for creativity. “Disguised as a reform effort supportive of advanced biofuels, the RFS Reform Act actually guts the RFS by eliminating key provisions that require oil companies to actually change their behavior and buy renewable fuels,” he said.