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MARKET WATCH

State and Federal Legislation Targets Renewable Fuel Standards

Posted by LeAndra Spicer on June 7, 2013

Legislation Florida Governor Rick Scott signed last week repealed Florida’s Renewable Fuel Standard. Passed in 2008, the standard required gasoline sold within the state to contain nine to 10 percent ethanol.

Representative Matt Gaetz, who has pushed to repeal the mandate nearly since its inception, sponsored the bill. He reportedly involved himself in this cause after constituents complained ethanol caused damage to boat engines. HB 4001 passed the House on April 12 and the Senate (SB 320) on April 24.

Supporters argued the government should not mandate the types of fuels sold in the free marketplace.

Opponents fear the action will discourage biofuels investment within the state, however. President and CEO of the Renewable Fuels Association Bob Dinneen and CEO of Growth Energy Tom Buis issued a joint statement voicing their concerns, “All this bill has done is put politics and oil industry profits ahead of economic opportunity and jobs in the state. The only result of this legislation will be a loss of jobs and economic opportunity in Florida.”

Governor Scott, on the other hand, took the stance that the regulatory burden imposed by the state ethanol mandate worked against economic investment and job creation. “Consistent with this intent, it is important that this legislation signal to businesses around the world that Florida welcomes their investment and jobs.”

What is certain is the repeal will have no effect on the makeup of gasoline sold within the state. Florida remains subject to the 10 percent ethanol mandate per the federal Renewable Fuels Standard (RFS).

Part of the Clean Air Act of 2007, the RFS requires refiners, blenders and importers to mix 16.6 billion gallons of renewables into the fossil fuel supply this year. One billion gallons of those renewables must include cellulosic biofuels derived from non-food crops such as wood biomass.

Representative Bob Goodlatte (R –VA) would like to see the federal standards repealed as well. While the Florida legislature was debating the merits of a repeal that would eventually become law,  Goodlatte was busy introducing not one, but two, bills aimed to eliminate or severely limit the RFS.

The Renewable Fuel Standard Elimination Act (HR 1461) would repeal the federal ethanol mandate. The Renewable Fuel Standard Reform Act of 2013 (HR 1462) would reduce the size of the RFS by 42 percent over the next nine years, in part by eliminating corn ethanol from inclusion as a renewable, and abolishing the existing biofuels mandate. Each bill has been referred to the House Subcommittee on Energy and Power.

Further up the east coast, lawmakers in Maine have passed a bill that prohibits the sale of gasoline that contains more than 10 percent ethanol.  The law would take effect only if two other New England states pass similar legislation. This measure is aimed to protect consumers from a jump in fuel prices likely to occur if Maine refiners were required to custom blend fuel.

Another bill that prohibits the sale of gasoline containing any amount of ethanol altogether appears on its way to becoming state law after passing both the House and Senate. The original bill contained a provision that mirrored that the aforementioned two-state requirement before the law could take effect. Perhaps anticipating conflict between the state and federal laws, the Maine Senate amended the bill to take effect contingent upon 10 states with a collective population of at least 30 million citizens to place the same ban.

To date, a bill to ban ethanol blending in New Hampshire did not make it past the state Senate. Similar bills, to our knowledge, are not on the table in Connecticut, Massachusetts, Rhode Island or Vermont. The Maine legislative session will adjourn on June 19, so any further action is expected within the next two weeks.

Topics: renewable fuel standard

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