Two Sides of Renewable Fuels Debate

Two Sides of Renewable Fuels Debate

Does RFS reduce foreign oil imports? Or is it a giveaway to ethanol producers?

After two-day hearings in July focused on the Renewable Fuels Standard, the need for a workable path forward became clear.

The hearing looked at whether the RFS is saving America's environment and reducing foreign oil imports or is a give-away to ethanol producers, forcing food prices higher.

Support for the RFS has been deeply divided between crop and ethanol producers and oil and livestock producers. A few years ago most of us believed this would be a dead issue as so-called 'second generation' cellulosic biofuel would surge in growth. Today that's not even close to reality.

RFS DEBATE: Does RFS reduce foreign oil imports? Or is it a giveaway to ethanol producers?

Sen. Chuck Grassley, R., Iowa, notes that support for the RFS is "weak in the House and weakening in the Senate." However, he adds, President Obama and the Senate likely would have enough support to fight off any attempts to change the RFS.

Within the Republican Party there isn't a clear consensus on how to deal with a slow cellulosic market coming to fruition, lower gasoline usage and foot-dragging by the oil industry for blending higher amounts of ethanol.

And at the forefront of those discussions is Rep. John Shimkus, R., Ill. Shimkus' district requires him to please both camps as he has five ethanol plants and two oil refineries to please. And in the hearings he noted there has to be a middle ground found.

House Energy and Commerce Committee chairman Fred Upton, R., Mich., selected four Republican members of the House subcommittee to form a taskforce to explore possible ways to reform the RFS. The other three are Reps. Cory Gardner of Colorado, Lee Terry of Nebraska, and Steve Scalise of Louisiana.

Steve Tomaszewski, press secretary for Shimkus, reiterated that right now there is no single direction the group is moving towards. "But the Congressman has stated that everybody has to move a little. Each needs to bring us some ideas from different perspectives, otherwise it will get forced down on you," he said.

It's clear that there aren't the votes for a full repeal on the House side. During the hearing Shimkus went after oil industry executives as well as renewable fuel industry lobbyists about what solutions are workable. But in today's talking point-driven atmosphere, each quickly redirected to their talking points instead of looking at the issue objectively.

"If you keep these positions, nothing is going to get done, and nobody is going to be happy." Shimkus told the four executives of the American Petroleum Institute, the American Fuel & Petrochemical Manufacturers, the Renewable Fuel Association and the Advanced Biofuels Association in the hearing.

While the witnesses hedged initially, they eventually agreed to work with the committee on a new RFS amendments package.

Shimkus challenge is not only to find a sweet spot between deeply divided thoughts, but also help educate his Republican colleagues about the mandate. Half of the members in office now weren't in Congress in 2005 and 2007 when the first and second RFS were first passed. The entrenched positions of interest groups on both sides of the issue have come out in full force and have made finding a middle ground even more difficult.

The House is more open to the idea of changing the RFS through the legislative process. However, the Senate too will begin to take a closer look at the rule. The Senate Environment and Public Works Committee reported that it will hold a hearing on the RFS this fall. Some Democrats on the Environment and Public Works panel, such as Sens. Ben Cardin, D., Md. and Tom Carper, D., Del., have expressed concern about the increase ethanol targets under RFS2.

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