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Lawmakers want ethanol answers from EPA and DOE

A bipartisan group of senators who support ethanol will meet
with EPA Administrator Lisa Jackson and Energy Secretary Steven Chu Monday to
try to find out why industry requests for higher blends of the biofuel in
gasoline are being delayed.

 “They’re going to know how we feel, and I want to know who’s
really holding this up. Is it EPA or is it DOE?” Senator Tom Harkin (D-IA) told
Agriculture.com during a press conference Thursday.

 EPA is calling for more testing of the effects of a 15%
ethanol blend on car engines by the Department of Energy, delaying until
possibly the end of the year a final decision on a request by the ethanol trade
group, Growth Energy, to boost the ethanol blend level from 10% to 15%.

Energy Secretary Chu was quoted in a trade publication last
fall saying that he personally would prefer to develop electric cars instead of
more reliance on biofuels.

 This week, another strong supporter of ethanol, Senator
Richard Lugar (R-IN) told the Fort Wayne Journal Gazette, “The Environmental Protection Agency has
taken extra time to make their decision on raising the allowable ethanol blend
level. More than adequate attention has been paid to concerns that might arise.
Further delay is unwarranted.”

 Lugar is also planning
to be at the meeting, along with Senator Tim Johnson (D-SD) and others.

“He continues to be an advocate for moving toward E15 and
new vehicles being flex fuel so they can use up to E85,” Lugar’s spokesman,
Andy Fisher told Agriculture.com.

Pressure to
increase ethanol blend levels is just one of several ways that Harkin and Lugar
are fighting to boost ethanol demand.

The two senators
are sponsoring an amendment to  an
energy bill expected to come up for debate next week as well. The amendment
would mandate production of flex fuel vehicles capable of burning up to 85%
ethanol, require the installation of blender pumps to dispense several levels
of ethanol blends, and create a federal loan guarantee program for ethanol
pipelines.

 Harkin said he
won’t support an energy bill without those provisions.

“Ethanol is still
one of the best, fastest ways to cut down on imported oil,” he said.

 Another key to
ethanol support is the 45 cent-a-gallon tax credit that goes to fuel blenders.
It expires at the end of this year. 
That’s not on the agenda Monday, and could be delayed for months.

 “Right now this
is not a part of the energy bill…I don’t think it ought to be in the energy
bill. It will be looked at as part of a broader tax bill later on, but not part
of the energy bill,” Harkin said.

 That tax bill,
Harkin said, will be debated after the election. It could be as late as
December.

 That wouldn’t be
good news to groups like the Renewable Fuels Association, which is saying that
up to 40% of the ethanol industry could be shut down if the tax credit isn’t
extended, a fate similar  to what
has already happened to the biodiesel industry after a larger $1-a-gallon
credit expired last year. The biodiesel tax credit still hasn’t been renewed.

 “Our preference would
be to extend the tax incentives sooner rather than later.  That would
allow the market and the industry to make investments in infrastructure and
technology with some level of confidence,” said Matt Hartwig, a spokesman for
RFA. “Given the dysfunctionality of Congress, it is possible that these tax
incentives and a host of other issues may have to be addressed yet again in a
lame duck session.“ 

 Even the
Harkin-Lugar amendment faces uncertainty. It would be added to an energy bill
put together by Senate Majority Leader Harry Reid (D-NV).

“This bill didn’t
come out of the Energy Committee. This is something Reid just put together,”
said Tom Buis, CEO of Growth Energy. Reid’s bill has no provisions for ethanol
or any renewable energy, including wind, Buis told Agriculture.com

 Growth Energy has
proposed shifting part of the tax credit to financing new infrastructure such
as blender pumps, which would give ethanol greater access to the market,
especially if EPA ever approves 15% blends.

 “We’ve got this
barrier and the barrier we face is access to the marketplace because we’re
capped at 10%,” Buis said.

 Buis said that when
Growth Energy asked EPA to approve higher blends, it submitted more data than
any similar request. And it all shows that cars of any model year can burn 15% ethanol
without harmful effects, he said.

 “We’re producing
more than we’re allowed to put in the nation’s fuel supply, and we’re spending
a billion dollars a day on imported oil,” he said. 

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