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Legislation for Year-round High Ethanol Blends Stalls

The combined weight of several amendments under discussion ultimately sank the bill.
October 9, 2017

​WASHINGTON – Legislation that would allow year-round sales of higher ethanol blends will not move through the U.S. Senate’s Environment and Public Works Committee this year, after it attracted amendments that targeted major environmental laws, reports Politico.

Committee Chairman John Barrasso (R-WY) and Sen. Deb Fischer (R-NE), co-authors of S. 517, told the news source that their bill lacked the votes necessary to move out of committee and onto the Senate floor. Sen. Jim Inhofe (R-OK), who opposed the bill, said it would have weakened the Clean Air Act, while other senators expressed concern about the legislation and industry sources said Democrats had a string of their own plans to try to address concerns about higher food prices and increased air pollution. The combined weight of the amendments under discussion ultimately sunk the bill.

"The original sponsor said the votes aren't there; I don't expect to see it this year," Barrasso said. Fischer agreed that the bill would not come up for a vote this year.

Ethanol producers have long argued that allowing year-round sale of gasoline with 15 percent ethanol would help increase the number of credits that refiners must use to comply with the Renewable Fuel Standard — and ultimately drive down prices. But the oil industry sees the RFS as "broken," and major producers have no interest in small tweaks, especially one that would cut into the sale of their product.

Fischer won committee time in May for her bill, which would waive a Clean Air Act provision that prevents summer sales of E15 in some states after a last-minute scramble for votes on a resolution to kill an Obama-era rule limiting methane leaks by gas producers. Barrasso agreed to give her bill a hearing and a markup vote in exchange for votes from Fischer, Sen. Chuck Grassley (R-Iowa) and other corn-state Republicans. The methane resolution ultimately failed.

Ethanol producers had hoped to sway Democrats by touting the fuel's lower greenhouse gas profile than gasoline, and the hope that allowing E15 to be sold all year would create higher demand for advanced biofuels with even lower emissions, a top concern for longtime RFS supporter Sen. Ed Markey (D-Mass.).
The committee also has five senators among its members thought to be considering running for the Democratic nomination for president in 2020: Sens. Bernie Sanders (I-Vt.), Cory Booker (N.J.), Kirsten Gillibrand (N.Y.), Kamala Harris (Calif.) and Jeff Merkley (Ore.). Ethanol remains a key issue in Iowa, and a "yes" vote could have been a boost to a primary bid.

But industry sources say that Democrats, along with the Sierra Club, which opposed the bill, had concerns about the potential for higher food prices and air pollution. A biofuels and a refining industry source said Democrats wanted an amendment to cap ethanol volumes if food prices ran too high, and some Democrats worried that the air waiver, which has to do with fuel evaporation provisions, would create air pollution problems.

Though Fischer had sought a rifle shot that would address only the Clean Air Act waiver, the legislation ultimately "ricochets all over the place," said a refining industry source who opposed the bill.

"I think what happened [was] it looked like we were really going to do this. So we loaded the box up with every Clean Air Act amendment we could think of," he said.

Inhofe had his sights on the Clean Air Act, and he had planned a host of amendments, including killing the Clean Power Plan and the Waters of the United States rule, and sunsetting the conventional biofuel requirement that is typically filled by ethanol. The amendments would be hard for Republicans to oppose but would have been virtually impossible for Democrats to support, if any got attached to the bill.

"We think it is very unfortunate that this bill has been caught up by unrelated issues," John Fuher, senior director for government affairs for Growth Energy, an ethanol group, said in a statement. "We continue to believe that this legislation is necessary, as it would lift an outdated, unnecessary restriction on retailers who want to offer their customers the choice of a cleaner, more affordable fuel option year-round."

Oil groups who opposed the legislation were more upbeat.

"We are pleased that E15 waiver is not moving," said Frank Macchiarola, downstream director for the American Petroleum Institute. "We think it reflects a broad bipartisan consensus that, first, E15 is not ready for the market place, and second, the RFS needs to be addressed holistically with significant reforms based on free market fundamentals that protect the American consumer."

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