Domenici Floor Remarks on RFS Amendment

December 10, 2007
05:53 PM
WASHINGTON – U.S. Senator Pete Domenici, ranking member of the Senate Energy and Natural Resources Committee, today introduced a Renewable Fuel Standard amendment to the Farm Bill.   
            Below is the prepared text of the Senator’s remarks:
“Mr. President, I rise to call up amendment number 3614.  A couple of weeks back, there was much talk from the Majority about the need to keep only relevant amendments in order on this Farm Bill.  While there was much left to interpretation of what exactly a relevant amendment means, there can be no question that the Senate should debate and vote on my amendment.
Mr. President, this Farm Bill is called the Food and Energy Security Act of 2007.  I cannot think of an amendment more relevant to the economic security of the American farmer and the energy security of the American people, than an amendment to increase the renewable fuel standard.  Since we passed the first-ever renewable fuels standard in the Energy Policy Act of 2005, we have seen a surge in ethanol jobs and a surge in the construction of plants.  In 2006 alone, the U.S. ethanol industry supported the creation of 160,000 new jobs while producing 5 billion gallons of ethanol.  These are American farm jobs which help produce American fuels that help reduce our dependence on foreign oil.
My bipartisan amendment would set annual requirements for the amount of renewable fuels used in motor vehicles, homes and boilers.  It would require that our nation use 8.5 billion gallons of renewable fuels in 2008 and progressively increase to 36 billion gallons by 2022.
Beginning in 2016, an increasing portion of renewable fuels must be advanced biofuels.  Advanced biofuels include cellulosic ethanol, biodiesel and other fuels derived from unconventional biomass feedstocks, like sorghum.  The required amount of advanced biofuels begins at 3 billion gallons in 2016 and increases to 21 billion gallons in 2022. 
Advanced biofuels do not have many of the challenges that conventional ethanol does.  The inclusion of advanced biofuels strikes a balance that will allow America to begin diversifying our fuel supply both in the short term and the long term.  That is why when supporting these same provisions in the Energy Bill, the Renewable Fuels Association said that they “strike the right chord” noting that “such an investment in our nation’s energy future promises to spur the creation of new, good paying jobs across the country.”
  Mr. President, the amendment that I seek to offer consists of the very same provisions passed by the Senate in June during consideration of an energy bill.  Some may ask then, why do I seek to offer this amendment on the farm bill.  My answer is three-fold:
 First, it is clear that the energy bill has slowed down largely because the House has passed two major provisions – tax increases and a renewable portfolio standard - that are untenable to many in the Senate.  Second, the House energy bill in many respects weakens the renewable fuel standard passed in the Senate energy bill.  Besides, if the Senate makes progress on passing the energy and getting it signed into law, there would be nothing to prevent a conference from simply removing this then-unnecessary provision.  Third, this amendment is relevant to the Farm Bill and necessary NOW to re-invigorate an ethanol industry that is looking to Congress to extend this mandate as soon as possible. 
Mr. President, in one sense, we have been a victim of our own success.  Thanks to the 2005 Energy Bill, rural America has answered the call for increased ethanol production.  In fact, we have now exceeded the original mandated amount in our fuel mix.  For example, in 2006, the ethanol standard was 4 billion gallons and, in fact, our domestic production of ethanol was 5 billion gallons.  We can do more and the American farmer is looking for Congress to do more. 
Over the last year, the price of ethanol has dropped nearly 40 percent.  The reason for this is simple economics.  We have an increased supply and diminished demand in the marketplace.  As a result, the construction of new plants has been delayed meaning new job growth has been diminished and rural communities are looking to us to take action.  We cannot wait for the energy bill while rural communities are losing their opportunities.
Mr. President, this amendment is not simply relevant to the Farm Bill.  It is necessary.  I ask my colleagues to support this bipartisan amendment, and ask that the committee go to work on the energy bill that went to the House with this biofuel for energy security and transportation.  It was sent back to us, not as a bill, but rather as a message.  It does not do justice to the biofuels for energy.  They ought to fix that, and at the same time take the taxes and the 15 percent electricity mandate out of the bill. 
I sincerely ask that the leader, our distinguished leader, to take the lead and see that it is done quickly.  I yield the floor.”
Concerns with House RFS:
In Title 2, Section 202, subsection F, the Pelosi Energy bill allows the EPA Administrator to completely cancel the RFS after 2016! 
The Pelosi energy bill grants broad waiver authority to the EPA Administrator to waive at least 20% of the mandate in 2016 and 2017, or 50% of the mandate in 2016.
If the Administrator does either of those two things, he (or she) can then modify the mandate however he wishes. 
That’s because the authority to grant waiver is dependent on “significant renewable feedstock disruption or other market circumstances.”  In other words---the EPA Administrator has total discretion.
These provisions are significant because the whole point of an extended RFS is to give the market certainty.  In the area of advanced biofuels, significant investments must be made in order to meet the standard.  The market, however, will not be eager to invest in new technology if there is a significant possibility that the EPA Administrator could simply cancel the mandate.
And that’s not all.
Both the original Senate RFS and the new House RFS have a 20% reduction in greenhouse gas emissions compared to petroleum as a requirement.  The Pelosi RFS, however, adds a rule that says that transportation and land usage must be taken into account in order to meet the mandate.
Since oil is transported via pipeline, there are no emissions.  Ethanol, however, is transported by truck. Trucks produce emissions. Therefore, the Pelosi RFS has the effect of punishing ethanol because we currently lack the infrastructure to move it through pipes. 
The same is true for land usage.  To grow corn, you need water, fertilizer, and resources.  The Pelosi RFS includes these items as part of the 20% reduction.