WASHINGTON, June 24, 2015 –Members of a Senate subcommittee on regulatory affairs took issue with the EPA’s management of the Renewable Fuel Standard (RFS) at a hearing last week, saying the agency is misinterpreting a key part of the program’s statutory intent.
The lawmakers peppered Janet McCabe, EPA’s acting assistant administrator for the Office of Air and Radiation, with questions about a host of issues, including the delay in finalizing 2014 volume requirements – six months into 2015. Last month, the agency released proposed requirements, which are below levels set by statute.
Some of the questions, primarily offered by Heidi Heitkamp, D-N.D., the subcommittee’s ranking member, and Iowa Republican Joni Ernst, dealt with EPA’s interpretation of the supply waiver included in the legislation – allowing volume requirements to be set lower than called for in the law -- as an infrastructure waiver, which is not part of the RFS statute. This confounded the senators, who pointed out that there is no infrastructure waiver in the RFS, meaning EPA was out of line with congressional intent.
McCabe said this decision comes from EPA’s requirement to “reasonably interpret” congressional intent.
“The bottom line, Senator, is that our interpretation of that term is that Congress intended for these fuels not only to be produced but to be used,” McCabe said in response to a question from Ernst. “We believe that looking over the history of this program over the last few years and what we can project forward, to set the standards at the statutory volumes would simply not be appropriate. There is too far a way to go. And so the waiver provision is there for EPA to use in its considered judgment to set ambitious, but responsible levels.”
Under the statute, EPA is authorized to issue a waiver that sets blending requirements for renewable fuels lower than the statutory levels included in the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007, the pieces of legislation responsible for the RFS. The only two waivers available under the law are those for “inadequate domestic supply” and if “implementation of the requirement would severely harm the economy or environment of a State, a region, or the United States.”
In her opening statement, Ernst said the use of infrastructure as a waiver “flies in the face of the law.” While Ernst and other senators took issue with McCabe’s points about “reasonable interpretation,” Heitkamp pointed out the conflicting issues with the RFS’ legislative history and EPA’s interpretations. She noted that when the RFS was originally being considered, the House version of the bill contained a waiver for infrastructure issues, but the Senate version did not. The waiver was removed in the conference committee, thus not being put into law.
“If you’re going to – I think – broadly read the language ‘inadequate domestic supply,’ and read it in what I would consider a fairly twisted way, you should look to the legislative history. That’s what lawyers do; that’s what judges do,” Heitkamp said, stating she felt it wasn’t the intent of Congress to include an infrastructure waiver.
The senators are upset about more than just twisted Congressional language; the inclusion of an infrastructure waiver could be seen as further cementing EPA’s acknowledgement of the “blend wall.” The agency had acknowledged the blend wall restriction in the past, saying it had to take heed of the possibility that the American consumer can only purchase and use a certain amount of renewable fuels without mixing renewable fuels – specifically corn ethanol – at higher blends such as E15 or E85. Most gasoline is now blended with 10 percent ethanol.
Renewable fuel advocates contend that the blend wall is an artificial construct created by oil companies due to their heavy control over distribution channels and their hesitation to offer higher blends of fuel.
The discussion over volume requirements set below statutory levels is likely to carry over into future years, as McCabe said the view of many - both in and out of EPA - is that the statutory levels set out to 2022 aren’t levels that are “achievable.” A public hearing to review last month’s multiyear RFS announcement is scheduled for Thursday in Kansas City, Kansas.
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