The US House of Representatives is planning to vote next month on a major biofuel policy reform bill after months of delays on an issue important for crop demand and fuel prices.
The chamber will vote on a standalone biofuel bill on 13 May, Agriculture Committee chair Glenn Thompson (R-Pennsylvania) said on the House floor Thursday, after an earlier plan to pass the bill and merge it with a larger farm policy package sputtered.
The latest proposal would remove summertime limits on gasoline with up to 15pc ethanol (E15), potentially encouraging broader sales of the typically-cheaper blend. It would also standardize the often-unpredictable process by which some oil refiners can win exemptions from a separate program that requires annual biofuel blending.
The plan for a House vote is just the latest turn for E15 legislation, which has struggled to pass Congress for years now despite strong backing from farm-state lawmakers of both parties and a recent push from President Donald Trump. A council of Republican lawmakers had hoped to have biofuel legislation ready for a House floor vote in February, but a bloc of refiners has resisted.
The latest proposal, while offering small companies automatic partial exemptions from biofuel quotas, would cut off some larger enterprises that today can win relief for smaller units they own. Under current rules, refineries that process 75,000 b/d or less of crude can request hardship exemptions — but under the proposal, only companies with no more than 75,000 b/d of collective gasoline and diesel refining capacity could win relief.
There is a limited carveout in the proposal for some facilities that can prove they are at risk of closing and a system to compensate some unnamed small refinery owners for past compliance by giving them special program credits that do not expire.
The framework is backed by not just farm advocates but also oil majors, who have been frustrated footing the bill for blending biofuels while some of their smaller competitors skirt the requirements. Some independent refiners remain hotly opposed, including those that would lose their ability to win exemptions and others that want deeper reforms to the biofuel mandate to temper costs.
The cost to comply with the program has spiked to all-time highs, according to Argus calculations based on current credit pricing, after the Trump administration last month set blend mandates at record-high levels.
It is unclear whether lawmakers will consider new changes to the existing E15 proposal — especially after oil and farm groups alike reacted coolly to the House task force's prior ideas — or if the planned vote will be punted yet again. Some Democrats have endorsed the latest deal, seeing it as a way to help out corn farmers and temper pump prices that are soaring because of war in the Middle East, and criticized Republicans for their infighting.
"Forgive my skepticism, but this certainly looks like every time we have a deal for a vote on year-round E15, there is an uprising in the Republican caucus," said House Agriculture Committee ranking member Angie Craig (D-Minnesota).
There are also significant obstacles to any biofuel proposal in the US Senate. Agriculture Committee chair John Boozman (R-Arkansas), who has major power over the Farm Bill that biofuel advocates hope an E15 bill could be added to, has opposed efforts to restrict mandate exemptions that have benefited a refinery in his state. While the legislation would allow but not mandate year-round sales of E15, some longtime critics of biofuels in the chamber see the proposal as a stepping stone to steeper blend requirements.
"Time to end ethanol tyranny," senator Mike Lee (R-Utah) said.
E15 is not sold at the vast majority of retail fuel stations in the US, which ethanol advocates blame on regulatory uncertainty deterring retailers from investing in higher-blend infrastructure. The Trump administration last month issued emergency waivers allowing continued E15 sales this summer, but permanent access requires legislation.
