WASHINGTON – The U.S. House Energy and Commerce Committee’s Subcommittee on Energy and Power wrapped up its two-day hearing this week on “Overview of the Renewable Fuel Standard (RFS): Stakeholder Perspectives.” The hearing continued the committee’s bipartisan oversight of the RFS, following the release of a series of bipartisan white papers and a previous subcommittee hearing examining government implementation of the statute. The subcommittee heard from 16 different stakeholder witnesses who offered varying perspectives on the current law.  

Members of Congress who sit on the subcommittee heard testimony from three panels of witnesses representing fuel marketers, developers and representatives from the agricultural and environmental communities. Panelists discusses a range of topics, including the Renewable Fuel Standard’s potential effect on fuel and food prices, blend wall and compatibility issues, and impacts on the nation’s agricultural sector and the environment. 

Joe Petrowski, CEO of The Cumberland Gulf Group, spoke on behalf of NACS and SIGMA and summarized the industry’s position:

1. NACS and SIGMA do not support the repeal of the RFS at this time. The groups do, however, support the RFS being administered in a manner that reflects the realities of the market as it actually exists today, rather than how Congress in 2007 projected it would.
   
2. The motor fuels market in the United States is on the cusp of hitting the so-called “blend wall,” when the RFS’s annual volume obligations exceed the volume of renewable fuel the market can reasonably absorb. This could cause gasoline and diesel prices to increase, generating severe economic harm throughout the United States.
   
3. The Environmental Protection Agency possesses and should exercise its statutory waiver authority to adjust volume obligations to avoid hitting the blend wall.
   
4. It is incumbent on Congress to determine whether the Agency will use its waiver authority; if it will not, legislation may be necessary. 
   

Several subcommittee members made it clear that the interested parties have to come to the table with constructive ideas to fix the problems with the RFS and that calling for “repeal” or “leave the RFS alone” are not constructive solutions. Many members, even those who support repeal, acknowledged there was insufficient support to completely repeal the program. NACS has been meeting with members of the House and Energy and Commerce Committee about fixing the program, which will enable it to respond to changing market conditions and protect consumers from unnecessary increases in costs.

House Energy and Commerce Committee Chairman Fred Upton (R-MI) added: “In my view, the current system cannot stand. I hope we can start a discussion that considers a host of potential modifications and updates to the RFS, with the end goal being a system that works best for the American people. I am absolutely committed to ensuring we deliver workable reforms.” 

The RFS was last revised in 2007, and in the years since the nation’s energy landscape has transformed dramatically. As a result of these changes in the nation’s energy mix and other unforeseen circumstances, several implementation challenges have emerged. In some respects, the RFS has unfolded as expected, but in others it has not.