Wednesday, September 13, 2006

Senate Hearing On Federal Renewable Fuels Programs

Sep 6: The Senate Committee on Environment and Public Works, Chaired by Senator James Inhofe (R-OK), held an oversight hearing on the Federal Renewable Fuels Programs. Opening statements were delivered by Senators Inhofe, Isakson (R-GA), Jeffords (I-VT), Baucus (D-MT), Lieberman (D-CT) and Obama (D-IL). Witnesses testifying included representatives from U.S. EPA, U.S. Department of Energy (DOE) and U. S. Department of Agriculture (USDA). The Renewable Fuels Standard (RFS) passed as part of the Energy Policy Act (EPAct) last year, requires the use of 4 billion gallons of ethanol and biodiesel in 2006. By 2012 that requirement rises to 7.5 billion gallons.

Inhofe indicated, "This is the first of what will be a series of hearings on renewable fuels, especially given the level of bi-partisan interest in the topic and EPA’s continued work on the renewable fuel standard implementation... Several politicians, including the President, and other interest groups have stressed the security implications of importing oil from unstable parts of the world. Yet, corn cannot be the answer. Even under the most extreme hypothetical - if the entire 2005 corn production of 11.1 billion bushels were dedicated to ethanol, the resulting 30 billion gallons of ethanol would represent only 14.5 percent of gasoline use (Congressional Research Service). Corn ethanol proponents must understand that natural gas is a key feedstock in ethanol production. Therefore, policymakers could de facto substitute foreign oil for foreign natural gas. Continuing my earlier example, processing the entire 2005 corn crop of 11.1 billion bushels into ethanol would be approximately 1.5 trillion cubic feet of natural gas. Total U.S. natural gas consumption was 22 tcf in 2005 (CRS). That said, there are certain bright spots on the horizon when it comes to renewable fuels. Cellulosic biomass ethanol could be an important part of addressing domestic transportation fuel needs."

Senator Obama indicated, "I’ve said it many times but our dependence on foreign oil threatens not only our economic security but also our national security. As long as our economic fortunes are tied to the price of oil, our ability to grow our economy and raise the standard of living for our people is threatened. Equally troubling, a large portion of the $800 million we spend on foreign oil each day goes to countries with volatile governments -- places that breed turmoil and terrorism."

EPA testified that based on data of ethanol use so far in 2006, it is expected that in excess of 4.5 billion gallons of renewable fuels will be used in the US this year and therefore the Agency does not anticipate that any deficit will be required to be carried over into 2007, in order to comply with EPAct. On September 7, EPA proposed its RFS regulation projecting it would result in annual cuts up to 3.9 billion gallons in petroleum use and 14 million tons in greenhouse gas emissions.

Access the hearing website and links to all statements and testimony (click here). Access the WIMS article and links related to EPA's proposed RFS posted on the eNewsUSA Blog (click here). Access a related WIMS article, A Critical Look At The Future Of Bio-fuels (click here). [*Energy]