Daily News Update, Feb. 8, 2008

Concerns arise as Senate reviews new RFS increase

The Senate Energy and Natural Resources Committee held a hearing Feb. 7 to listen to testimony on the energy market effects of the Renewable Fuel Standard (RFS) increase, which was included in the energy bill signed into law on Dec. 19, 2007.

Committee Chairman Jeff Bingaman (D-N.M.) acknowledged potential flaws with the RFS increase. "I am particularly concerned about three aspects of the RFS: first, early year biofuel requirements could be too aggressive; second, mandates for specific technologies and feedstock could prove to be overly prescriptive; finally, the environmental restrictions may be too narrow," said Bingaman.

NCBA actively opposed increasing the RFS and urged Congress to take a market-based approach to ethanol development. The new law calls for the production of 15 gallons of grain-based ethanol by 2015, up from a total requirement of 7.5 billion gallons under the previous RFS.

"The law favors certain technologies and feedstocks with individual mandates. This kind of micromanagement is likely to make government policy look foolish in the long run," said Bingaman. "If we cannot produce enough ethanol and biodiesel to meet these aggressive mandates, while maintaining food and fuel prices that consumers can afford, taxpayers will blame Congress, as they should."