Here’s a 60-Second Guide to a long week of Washington screeds — and opportunities for you, the stakeholder, to respond.
This week in Washington, it has been one for the record books, emailwise and biofuelswise. Reams and reams of emails attest to the seriousness of the stakes — as NGOs, trade associations and Congress paper the nation in studies, position papers and responses – on the subject of renewable fuels.
For you — the oft-forgotten stakeholder — the House Energy & Commerce Committee has issued 11 questions for your input — primarily on the Renewable Fuel Standard. More on that in a minute.
Meanwhile, as we begin to sort through the mail to digest it down to a summary of “news you can use” — we remind our friend in NGO-land that there is still time to email Biofuels Digest before the weekend to announce that (choose one):
A. Biofuels are the scourge of the world.
B. Only scourges of the world oppose biofuels.
Why, exactly, has Washington, DC become — suddenly and again — the epicenter of the future of biofuels in its largest and most important market (the US)?
Well, there are proximate causes, which this week have something to do with ethanol blending and military drop-in fuels. And there are some long-term causes, which have to do with long-term reduction of oil dependency. Let’s digest the onslaught of news.
Major push from Obama on energy.
From DOE: “Liquid fuels demand can be sufficiently reduced so that biomass can meet all liquid fuel needs.”
In an address at the Argonne National Laboratories on Friday, President Obama said: “You see, after years of talking about it, we’re finally poised to take control of our energy future.…But the only way we’re going to break this cycle of spiking gas prices for good is to shift our cars and trucks off of oil for good. That’s why, in my State of the Union Address, I called on Congress to set up an Energy Security Trust to fund research into new technologies that will help us reach that goal.
The Transport Energy Futures suite of studies
A set of 9 Interconnected reports from the U.S. Department of Energy, the National Renewable Energy Laboratory, and Argonne National Laboratory that finds the United States has the potential to reduce petroleum use and greenhouse gas (GHG) emissions in the transportation sector by more than 80% by 2050 – and proposes pathways towards that goal.
New National Research Council study
A National Research Council report finds that by the year 2050, the U.S. may be able to reduce petroleum consumption and greenhouse gas emissions by 80 percent for light-duty vehicles — cars and small trucks — via a combination of more efficient vehicles; the use of alternative fuels like biofuels, electricity, and hydrogen; and strong government policies to overcome high costs and influence consumer choices.
The report finds that sufficient lignocellulosic biomass could be produced by 2050 to meet the goal of an 80 percent reduction in petroleum use when combined with highly efficient vehicles.
The API NERA study
On Wednesday, API Downstream Group Director Bob Greco told reporters that the Renewable Fuel Standard is poised to do serious harm to consumers.
“The Renewable Fuel Standard program is irretrievably broken. The study…found that, by 2015, the economic consequences of continued implementation of RFS would be severe, including:
• an almost $800 billion decrease in U.S. GDP;
• a $580 billion decrease in take-home pay for American workers;
• a 300 percent increase in the cost of manufacturing diesel, and a 30 percent rise in the cost of making gasoline, which could result in rationing and other disruptions in the transportation sector; and
• the unintended consequence of encouraging export of refined products to comply with the law.
The RFA’s Quickie Video Clip
This one arrived Wednesday from RFA: “Not the truth as defined by us, the ethanol industry, but by a third party analyst appearing on Fox Business News. In a mere few seconds, the real motivation behind the recent rash of attacks on the RFS, E15, and rising RINs becomes crystal clear.”
The Senate rejects up the Toomey Amendment to strip military biofuels funding
As the week progress, the Senate voted 59-40 to reject the Toomey Amendment that would have stripped $60 million in funding for military biofuels testing.
Mike McAdams, head of the Advanced Biofuels Association, added: “The Senate has once again endorsed the importance of advanced biofuels in securing our energy future and creating jobs and economic growth. In fact, these drop-in fuels are not blocked by the blendwall and are coming to market with companies like KiOR now selling their first renewable drop-in diesel from cellulosic feedstock.”
E85 the answer?
“The obvious solution to the RIN price problem involves no EPA intervention and no regulatory action at this point,” energy economist Phil Verleger writes and Platt’s John Kingston reports. “It simply calls for boosting E85 sales.” Kingston adds: “Verleger lays out data that shows the “needed percentage” of renewable fuels in diesel and gasoline could be cut on average to 7.6% from 9.6% if the E85 market share could rise from its current level of close to zero to 5%.”
House Energy & Commerce Committee reviews the Renewable Fuels Standard
Yesterday, the Committee on Energy and Commerce began issuing a series of white papers as the first step in reviewing the renewable fuel standard (RFS). “Each will provide an overview of an issue and solicit input from interested stakeholders in the form of answers to questions posed.” The first is on the ethanol blend wall — four subsequent white papers with questions will address other economic, environmental, and policy issues.
Questions for Stakeholder Comment
1. To what extent was the blend wall anticipated in the debates over the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007?
2. What are the benefits and risks of expanded use of E-15 to automakers, other gasoline powered equipment makers, refiners, fuel retailers, and others involved in the manufacture and sale of gasoline and gasoline-using equipment?
3. What are the risks of the introduction and sale of E-15 to the owners of pre-2001 motor vehicles, boats, motorcycles, and other gasoline-powered equipment not approved to use it? Are there risks to owners of post-2001 vehicles? How do these risks compare to the benefits of the RFS?
4. What is the likely impact, if any, of the blend wall on retail gasoline prices?
5. What is the timing of the implementation challenges related to the blend wall? Will some entities face difficulties earlier than others?
6. Could the blend wall be delayed or prevented with increased use of E-85 in flexible fuel vehicles? What are the impediments to increased E-85 use? Are there policies that can overcome these impediments?
7. Is E-15 misfueling unavoidable? Are there lessons from the labeling and dispensing of diesel, E-85 and other fuels that prevent their misfueling that can also be applied to E-15? What specific actions are companies taking to address potential misfueling concerns under MMPs?
8. Can blend wall implementation challenges be avoided without changes to the RFS? Is the existing EPA waiver process sufficient to address any concerns? If the RFS must be changed to avoid the blend wall, what should these changes entail? Should any changes include liability relief or additional consumer protections for addressing misfueling concerns?
9. Have the 2017 and Later Model Years Light Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy standards for cars and light trucks changed the implementation outlook of the RFS?
10. What other methods, including the use of drop-in fuels, are available to industry to ease the challenge posed by the blend wall?
11. What are the impacts on renewable fuel producers if the RFS is changed to avoid the blend wall?
Responses to: [email protected], by April 5, 2013
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