News & Ideas

RFS Field Hearing Testimony from ACE Executive Vice President Brian Jennings

The full comments from ACE Executive Vice President Brian Jennings during the RFS Field Hearing on June 25, 2015

Thank you, my name is Brian Jennings, and I’m the Executive Vice President of the American Coalition for Ethanol.  I’m pleased to report that more than 100 people representing ACE member companies will testify at today’s hearing, as well as several retailers who are overcoming the E10 blend wall by offering E15 and flex fuels to consumers.

My comments focus on the methodology EPA is using to set the 2015 and 2016 Renewable Volume Obligations (RVOs).

Today, obligated parties may protest that EPA is “breaking the blend wall in 2016.”  But you need to separate the signal from the noise.  EPA’s proposed RFS methodology actually enables oil companies to stockpile more than 2 billion gallons of carryover RINs by 2016.  So in reality, your proposal continues to limit ethanol blending to E10.

According to Bruce Babcock of Iowa State University, because obligated parties control 80 percent of refined-product terminals, they decide the level of ethanol blending that will, or will not, occur.  That’s why Congress enacted the RFS.  Left to their own devices, oil companies won’t allow consumer access to E15 and flex fuels.  Left to their own devices, oil companies won’t reduce the carbon intensity of gasoline.  They’ve earned the label “obligated parties” based on their refusal to innovate 

The legislative history is clear.  Congress struck the phrase “distribution capacity” from the final statute out of concern that oil companies would exploit it to confine ethanol blending to E10. 

It appears EPA is conflating the broad discretion you have under the Cellulosic Waiver authority with the very narrow and clear General Waiver provisions of the RFS, and legal precedent dictates that when the statutory language is clear, EPA must adhere to the statute.

No matter how many times EPA says it; the definition of “inadequate domestic supply” is not ambiguous.  It clearly refers to renewable fuel supply, and with U.S. ethanol production capacity exceeding 15 billion gallons, supply is more than adequate.

The farmers and biofuel producers who are trying to help EPA succeed in fulfilling the goals of the RFS are mystified that you are siding with oil companies who mock the President’s efforts to reduce GHG emissions and take EPA to court every time you roll out new renewable fuel blending targets.

EPA cannot take a passive approach with parties whose ultimate goal is to repeal the RFS.  Doing so turns a program designed to promote innovation and clean air into one that chokes innovation and increases pollution.

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