Supporters and critics of the Renewable Fuel Standard sparred Wednesday over whether RFS ethanol blending requirements contribute to higher gasoline prices and reduce greenhouse gas emissions at a Senate hearing examining the law.
Both senators and witnesses at the Environment and Public Works Committee hearing took turns citing studies that buttressed their positions, including one just published in the Proceedings of the National Academy of Sciences that found between 2008 and 2016, “the carbon intensity of corn ethanol produced under the RFS is no less than gasoline and likely at least 24% higher.”
Growth Energy President and CEO Emily Skor called the study “untethered from reality,” alleging it relied on “unorthodox methodology.” On Monday, Skor had criticized the study online, saying, “As has been shown repeatedly, there is simply no evidence that the RFS increases GHG emissions on a life cycle basis, compared to gasoline.”
On the other side was LeeAnn Johnson Koch, a partner at Perkins Coie who represents small refineries. While she sided with Skor and other witnesses in wanting lower-emitting biofuels, Koch said “where we depart on that point is on whether or not ethanol is in fact a lower-emitting fuel” and cited the PNAS study.
Koch also blasted the Environmental Protection Agency for proposing to deny requests for waivers from more than 60 small refineries.
“Small refiners were blindsided by EPA proposal to retroactively deny” the RFS waiver requests, she added, asserting that there simply isn’t enough ethanol or a sufficient supply of affordable Renewable Identification Numbers — the compliance credits for the mandate — for small refiners to meet RFS blending targets for previous years.
"I just want to be clear, when we talk about 2019, 2020 and 2021, when EPA has proposed to deny hardship relief, not one more drop of renewable fuel can be blended," Koch said, adding that “EPA’s proposed denial did not reference its legally required consultation with the Department of Energy and [DOE’s] conclusion that if EPA acts as they propose to do, small refineries will be at risk of shutdown and bankruptcy."
“If EPA publishes its proposed denial, the parties holding the RINs that small refineries need for compliance will be in a position to demand exorbitant prices because small refiners will be captive buyers on the eve of the compliance deadlines,” she said.
Skor, however, said that the proposed SRE decision “will strengthen the RFS program, reduce the nation’s emission of greenhouse gases, and support renewable, American-grown biofuels.” She also said “EPA has consistently found that obligated parties — big and small — do not face disproportionate economic hardships from compliance with the RFS.”
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GOP Senators Cynthia Lummis of Wyoming and Shelley Moore Capito of West Virginia, the committee's ranking member, also criticized the SRE proposal, saying small refineries cannot compete with large, integrated oil companies, putting jobs in rural areas at risk.
But Iowa Republican Sen. Joni Ernst touted the positive impact of the RFS on rural areas, saying “the biofuel industry accounts for over $5 billion of GDP, generates $2.6 billion of income for households, and supports nearly 46,000 jobs in Iowa alone.”
“In my rural areas, ethanol is also the cheapest form of fuel for consumers right now by about 50 cents. And certainly, with record-high inflation, it only makes sense to make this fuel source more readily available.”
Responding to claims that RFS blending requirements are driving up the price of gasoline, Skor said, “The dominant factor driving the price of fuel for consumers at the pump is the price of crude oil, in addition to supply and demand.”
The price of crude has more than doubled from its cost of $40 per barrel at the end of 2020, Ernst said.
Another witness, Energy Policy Research Foundation President Lucian Pugliaresi, agreed that the cost of crude oil is increasing gas prices, but that “there are other components in the manufacturing of transportation fuel.” He called for the Energy Information Administration to examine the issue so both sides in the RFS debate could have the same data.
"We should try to do a better job of getting a common set of facts,” Pugliaresi said.
Sen. Kevin Cramer, R-N.D., said the debate over the RFS has been going on since he arrived in Congress. “It’s not the topic that has perplexes me as much as much as the debate,” he said. “It never changes.”
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