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Hearing Focused on Renewable Fuels

The Senate Environment and Public Works Committee held a hearing this week focusing on Oversight of Domestic Renewable Fuels.  In prepared testimony, Brooke Coleman, Executive Director of the Advanced Ethanol Council said advanced ethanol will expand rapidly upon the market foundation being built by existing ethanol production if government policies allow advanced ethanol technologies to compete. Coleman warned against "backsliding" on current investments in domestic ethanol production and challenged the misperceptions of America's ethanol industry.

Coleman called for a stable and long-term commitment to increase market access and competitiveness in the U.S. liquid fuel marketplace. Such commitment would involve permanently eliminating the so-called ethanol "blend wall" by first and foremost incentivize the production of flexible fuel vehicles. Also needed are forward-looking policies that expand the installation of ethanol fueling infrastructure, such as blender pumps offering a wide range of ethanol blends like E40 or E85.

USDA Secretary Tom Vilsack rebuffed numerous criticisms of ethanol and the blender's credit from the panel and repeatedly tried to clear up misinformation about ethanol's impact on food inflation.

But, perhaps his most significant statement came when Committee Chairwoman Barbara Boxer, D-Calif., asked if the ethanol credit expires when the nation reaches, under the renewable fuels standard, 15 billion gallons of production

"You've actually I think time-limited it this year, it expires at the end of this year," Vilsack said. "My hope is that you think not about creating a cliff but creating a glide path. Phasing this out over a period of time and frankly phasing out the tariff over a period of time, but utilizing those incentives to grow this industry and to make the supply more convenient with more blender pumps.

But the deck already seemed 'stacked' in the Environment and Public Works Committee as Senators repeatedly questioned ethanol's efficiency, impact on engines, food prices and subsidy cost to taxpayers.

Ranking Member James Inhofe, R-Okla., has proposed a bill to allow states like his, to opt out of the ethanol requirement, but said he'd back off, if flex fuel blender pumps included 'clear' or 100% gasoline. 

Secretary Vilsack also spent time explaining that U.S. farmers and ethanol are not to blame for tight grain supplies and high food prices.

"To suggest ethanol is the reason when you have increased productivity of the U.S. farmer, when you have so little of the food dollar going to the farmer, when you have multiple reasons outside of the United States that are responsible for any shortages that might exist, to me it's just not fair," Vilsack said.

Vilsack pointed to an earlier study that corn ethanol's responsible for just one-tenth of food inflation and suggested soaring oil prices are the real culprit.