December 19, 2016

What Does the Future Hold for the Renewable Fuel Standard?

The Renewable Fuel Standard (RFS) is one of many policies facing an uncertain future as power changes hands in the federal government. While it’s impossible to know exactly what to expect from President-Elect Trump and the new Congress, activity during the transition and pre-election attitudes toward the RFS provide valuable context in looking ahead. At FaegreBD Consulting’s recent Insights Luncheon, a group of staffers from Capitol Hill weighed in on the factors that may shape the future of the RFS.

As was discussed at the luncheon, the Trump administration and the new Congress will both play a role in determining the future of the RFS program. The president-elect has made two nominations germane to the RFS. Oklahoma Attorney General Scott Pruitt, Trump’s nomination for administrator of the Environmental Protection Agency (EPA), does not have a history of supporting the RFS. Iowa Governor Terry Branstad, who has been nominated for the U.S. ambassador to China, is a big proponent of ethanol exports.

On the congressional side, the overarching change will be an increased appetite for legislating. However, this Congress will feature new chairs for the committees that have jurisdiction over the RFS program in both chambers of Congress: the House Committee on Energy & Commerce and the Senate Committee on Environment & Public Works.

There remains a desire to pass energy legislation that was not completed prior to the close of the 2016 legislative session. The agriculture committees will begin working on a new Farm Bill for 2018 and are expected to be holding hearings on a variety of topics that impact biofuel production. All of these factors set the stage for potential deliberation and reform of the RFS—a program that has faced scrutiny since its inception. Among the topics discussed were the recently issued renewable volume obligations and speculation as to where the Trump administration would fall in terms of the annual implementation of this program moving forward. In addition, there is a push from some in the oil industry to change the point of obligation of the program. While the EPA denied that petition, it could be resubmitted under the new administration or pursued legislatively. Similarly, there will be legislative attempts to further bolster the biofuel industry as it looks to push beyond the E10 blendwall and continue to build out significant volumes in the advanced biofuel sector.

Held December 6, the Insights Luncheon featured Luke Tomanelli from the office of Sen. Vitter (R-LA), Jessica Clowser from the office of Sen. Fischer (R-NE) and Darin Guries of the Senate Committee on Agriculture, Nutrition & Forestry – offering different perspectives on the program.

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