US Senate group starts up “seed to wheel” review of US Renewable Fuel Standard
Coalition of the Unwilling
The same coalition was responsible for an all-out lobbying offensive that resulted in the repeal of the ethanol blender’s tax credit in 2011, although pro-ethanol groups such as Growth Energy had abandoned the tax credit in hopes of shifting financial support to programs such as blender pumps that would open up the market to higher blends of ethanol.
While generally united against the expanded corn ethanol targets in the revised RFS2 that was passed during the Bush Administration, the coalition may find itself fracturing over the question of support for advanced biofuels. Food giant Tyson Foods is a joint venture partner in the largest producer of advanced biofuels in the US, Louisiana-based Dynamic Fuels.
In addition, BP, Shell, Total, Chevron, Marathon Oil and ConocoPhillips have invested substantial amounts in advanced biofuels producers. Major oil refiners such as Valero and Tesoro have invested in numerous advanced biofuels ventures.
Among environmental groups, the National Wildlife Federation has taken a leading role in the Roundtable of Sustainable Biofuels, and NWF senior policy advisor Barbara Bramble is chair of that multi-stakeholder, international organization.
BP has been working closely with Dupont, Novozymes and other companies in industrial biotechnology in an effort to “maintain the RFS”, and the split in the industry over the RFS, in some ways, reflects the reaction by individual companies, following passage of the revised RFS in 2007.
BP: “Galvanized into action by RFS2″
BP Biofuels CEO Philip New said, in an address at the Advanced Biofuels Leadership Conference last month in Washington that “the passage of RFS2 galvanized us into action,” and BP’s global biofuels workforce, 4,000 strong, now represents 6 percent of the oil giant’s global workforce.
The working group plans to look at hot button issues, including efforts by companies such as Celanese to permit natural gas-to-ethanol conversion to be included under the RFS, the E10 blend wall, the introduction of E15 ethanol blending. The group also proposes to look in-depth at the financial instruments required to scale up an alternative fuels industry, including venture capital, the role of large strategic investors, tax equity investment, debt financing, and the structure of customer off-take agreements.
Among environmental topics, soil quality, water quality, air quality and biodiversity are on the topic list, while RFS mechanics such as the cellulosic waiver, trading irregularities in renewable fuel credits (known as RINs), and product liability will be examined by the group.
The bottom line
This is going to be a critical forum for the RFS2. Here in Digestville, we can’t think of anything more mission critical for the industry to figure out how to effectively participate, than this.