The Renewable Fuels Standard, Energy Security, and Clean Air

The Renewable Fuels Standard, Energy Security, and Clean Air

The Natural Resources Defense Council (NRDC) supports eliminating the use of MTBE in gasoline, eliminating the oxygenate mandate, and expanding the role of biofuels in our transportation system. We believe that a sound and sustainable approach to biofuels has the potential to make a critical contribution to reducing U.S. oil dependence and global warming pollution from vehicles without interfering with attainment of critical air quality standards. Based on very productive discussions over the last several months with the Governor’s Ethanol Coalition, Renewable Fuels Association, the American Council for Ethanol, the American Lung Association and the Northeast States for Coordinated Air Use Management (NESCAUM), we are convinced that it is possible to craft a broadly-embraced renewable fuels standard that ensures biofuels production from a variety of biomass resources and protects air quality. Such an approach has the potential to overcome regional tensions that have undermined past efforts to enact a renewable fuels standard and would merit overwhelming support in the Senate.

Ethanol produced from corn and other conventional crops contributes to reducing America’s oil dependence and results in a modest reduction in global warming pollution. The energy security, environmental, and economic development benefits of renewable fuels can be increased dramatically by producing fuels from a wider variety of biomass resources, including agricultural waste, wood waste, and energy crops such as switchgrass. Producing ethanol from such “cellulosic” materials turns waste streams into resources, allows renewable fuel to be produced with less than half as much fossil fuel input, and allows competitive ethanol production to occur in all regions of the United States. The Cantwell amendment adopted by the Energy Committee provides a strong foundation for stimulating the development of a commercially competitive cellulosic ethanol industry. It should be complemented with enhanced research and development on processes to convert cellulosic biomass into ethanol more cost-effectively and with deployment incentives for the first few commercial-scale production facilities.

Unfortunately, for jurisdictional reasons, the Energy and Natural Resources Committee was unable to consider the critical air and water quality protections that must accompany any acceptable renewable fuels standard (RFS). In the absence of these protections expanded use of ethanol will seriously exacerbate ozone smog, which makes the air unhealthy to breathe for millions of Americans. NRDC strongly opposes enactment of a renewable fuels standard unless it is accompanied by adequate air and water quality safeguards. Furthermore, the provision adopted by the Energy Committee structures the RFS to be administered by the Department of Energy, a non-regulatory agency which has no previous experience administering or enforcing this type of program. The refining industry, ethanol industry, environmental community and most other interests would agree that the EPA is far and away the more appropriate agency to properly administer the RFS program. Regretfully, NRDC must therefore oppose the Talent amendment to establish an 8 billion gallon renewable fuels standard.

Over the past three months, representatives of the nation’s governors, farm organizations, renewable fuels industry, state environmental and agricultural officials, environmental and public health advocates have been working to bridge the divisions that have undermined previous efforts to develop consensus support for the nationwide use of ethanol, including establishment of a national Renewable Fuels Standard (RFS).

Together, the provisions negotiated by this group will provide a sound future for domestically produced, clean alternative fuels, address lingering issues of public acceptance of ethanol as it becomes a truly national fuel, improve our national energy security and improve air quality. In doing so, we will overcome the regional tensions that have undermined past efforts to build a national consensus behind establishment of the RFS.

The core elements of this package include:

An 8 billion gallon national renewable fuel standard (RFS) to be phased in between 2006 and 2012;
an additive cellulosic ethanol RFS phased in to 1 billion gallons by 2016
a credit trading program administered by EPA that would provide flexibility as to when and where ethanol is used
eliminating the 2% oxygen mandate in the current federal reformulated gasoline (RFG) program
phasing out the use of MTBE as a fuel additive as soon as possible
federal loan guarantees for capitalization of cellulosic ethanol plants
updating EPA air quality models and adopting performance-based fuel specifications
using the most recent data to establish baselines for toxics anti-backsliding rules and applying them to all reformulated gasoline produced
allowing any state with an area(s) in non-compliance for ozone smog to opt into the RFG program and allowing states in the ozone transport region to opt in statewide
ensuring that seasonal use requirements do not hinder compliance with air quality standards
no special liability protection for ethanol or MTBE

In addition to NRDC, the Governors Ethanol Coalition, the National Farmers Union, and the Northeast States for Coordinated Air Use Management believe that it is necessary to adopt the elements of this package in order to create an effective, environmentally protective and nationally acceptable renewable fuels program. We are committed to working with the Senate as it considers energy legislation to see these provisions become law and request your support for this carefully crafted compromise.

Fact sheet courtesy of National Resources Defense Council