Sunday, July 28, 2013

Renewable Fuel Standard May Change

National Journal:
House Energy and Commerce Committee Chairman Fred Upton, R-Mich., has tasked four GOP members of his panel to take the lead on reforming a federal biofuels mandate.
The four members represent districts that crisscross the diverse industries with a stake in this complicated and contentious debate, including oil refineries, corn growers, livestock farmers, and biofuels producers.
Rep. John Shimkus, R-Ill., a senior member of the committee who represents a state that is No. 2 in corn production, will lead the unofficial GOP team. The others are Reps. Cory Gardner of Colorado, Lee Terry of Nebraska, and Steve Scalise of Louisiana.
The eight-year-old renewable-fuels standard requires increasingly large amounts of biofuels—mainly ethanol made from corn—to be blended with gasoline each year. Since the devastating drought that sent corn prices soaring last year, the policy has come under intense scrutiny by Republican and Democratic lawmakers alike.
Among the four Republicans, Scalise from oil-rich Louisiana is the only one who has advocated for repeal of the RFS, as favored by the oil, livestock, and food industries. The other three lawmakers take more-nuanced positions because they represent constituencies that have a stake in maintaining the standard, including producers of corn and advanced biofuels that come from nonfood products such as cellulose but that are not coming to market as quickly as Congress initially envisioned.
The group will work on policy actions that reform but don't repeal the mandate, which was established in the 2005 energy law and strengthened by Congress two years later.
You have to change what doesn't work, and trying to meet cellulosic ethanol standards when the technology isn't there yet, and trying to meet higher ethanol requirements when producers have hit the blend wall just won't work. They won't get rid of the mandates entirely, but making fuel from food is just really bad policy, and $4 a pound hamburger is some of what you get from it.

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