SENATE COMMITTEE HOLDS HEARING ON THE EFFECTS OF RENEWABLE FUEL STANDARD

As you may know, President Bush has pushed for increased production and distribution of ethanol in gasoline. The Senate recently held hearings to discuss the Renewable Fuel Standard included in the 2007 Energy Bill.

Senator Bingaman (D-NM), Chairman of the Senate Energy and Natural Resources Committee, raised concerns over the recently passed energy bill, H.R. 6, which drastically increases the Renewable Fuel Standard (RFS) to 36 billion gallons by 2022. The chairman stated that the mandates might be too aggressive and questioned the availability of biofuels to meet the new mandates since cellulosic ethanol plants are just getting started and are not commercially ready for use.

Senator Bingaman was concerned that the EPA would have difficulties implementing rules to achieve the aggressive mandates and stated that technical corrections to the RFS expansion will likely be needed. New regulations have to be in place within one year of the energy bill’s passage, which is going to be extremely hard to accomplish given the circumstances. Charles Drevna, President of the National Petrochemical and Refiners Association, highlighted to the Committee that all the talk about how ethanol will solve our nation’s dependency on foreign oil is not the final answer. He cited that it costs 13 to 18 cents a gallon to transport ethanol compared to conventional gasoline, which only costs three to five cents.