Kentucky Congressman Ed Whitfield, Chairman of the Subcommittee on Energy and Power has indicated that the House Committee on Energy and Commerce is likely to take up legislation in October that will revise the Renewable Fuel Standard (RFS). Before the August recess, House Energy and Commerce Committee Chairman Fred Upton (R-MI) assigned four republican colleagues; Cory Gardner (R-CO), Lee Terry (R-NE), Steve Scalise (R-LA) and John Shimkus (R-IL) the job of writing draft legislation to alter the energy mandates. The draft legislation will begin the legislative process in Whitfield’s Subcommittee.
The RFS originated with the Energy Policy Act of 2005 and was expanded and extended by the adoption of the Energy Independence and Security Act of 2007 (EISA). Under Clean Air Act, EPA is required to set annual standards under the RFS program based on gasoline and diesel projections provided by the Energy Information Administration (EIA). Provisions in EISA created new mandates (RFS2) through 2022. Those mandates include 15.2 billion gallons of renewable fuel in U.S. transportation fuel by 2012 and 36 billion gallons by 2022.
RFS2 mandates were divided into subcategories of biofuels—13.2 billion gallons are accounted for by the unrestricted portion of the mandate for which corn ethanol qualifies. 2 billion gallons must come from advanced biofuels (cellulosic biofuels and biomass-based diesel (biodiesel)).
For 2014 the Environmental Protection Agency (EPA) requires that 18.15 billion gallons of biofuels be produced in the U.S. However, last month the EPA issued a regulatory announcement “acknowledging that there are constraints in the market’s ability to consume renewable fuels at the volumes specified in the Clean Air Act in future years, and states that the EPA anticipates proposing adjustments to the 2014 volume requirements in the 2014 rule to address these constraints.”
According to refiners those constraints include hitting the “blend wall” in 2014 — the point at which they cannot meet federal requirements for blending ethanol into gasoline at the 10 percent level. Ethanol supporters argue that the oil industry could remedy this challenge by increasing the amount of ethanol blended into gasoline up to 15 percent. EPA has approved this level for use in cars and trucks produced 2001 and later. However, the higher level of ethanol is not approved for older vehicles, off-road vehicles, small engines and boat engines.
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