After biofuel quotas furor, EPA grilled by Senate

Reuters News
Posted: Jun 18, 2015 1:50 AM

By Chris Prentice

WASHINGTON (Reuters) - U.S. lawmakers will grill the nation's environmental regulator over its handling of a controversial renewable fuels program at a hearing on Thursday, the first since new biofuels targets provoked a furor among corn farmers and oil refiners.

The much-anticipated hearing by the Senate subcommittee on regulatory affairs and federal management will likely increase congressional attention to the pitfalls of the decade-old biofuels policy as it faces a fresh wave of criticism from policymakers, the oil industry and environmentalists.

But many experts say a major legislative overhaul, which would need approval in Congress, is unlikely with an election less than two years away.

Still, senior Environmental Protection Agency (EPA) official Janet McCabe will likely face tough questions from senators about years-long delays to the biofuels quotas and the future of the decade-old Renewable Fuels Standards (RFS), which critics say has inflated prices of food and fuel at the pump.

They will be the EPA's first public comments since the agency unveiled late last month long-awaited targets for the amount of corn-based ethanol and other biofuels that must be used in the nation's motor fuel supply.

Ahead of the hearing, Republican Senator James Lankford, who chairs the subcommittee, said he wants "clarity" from the Obama administration on its biofuel mandates, which he says are unattainable and artificially push corn-based ethanol into the motor fuel stream without environmental benefits.

"After a decade of implementation, we must ask ourselves if the RFS goals of yesterday are worth the increased costs to our food, gas and the environment," said the senator from Oklahoma, an oil-rich state, in opening remarks at the hearing.

Introduced in 2005 and a pillar of two presidential administrations, the RFS was aimed at cutting America's dependence on foreign oil and shift the nation to cleaner energy sources.

Supporters refute claims that the policy increases costs and the EPA said last week it sees no net increase in fuel prices from the program.

Oil companies including Tesoro Corp have threatened legal action to fight the latest proposal. For corn-based ethanol producers, like Archer Daniels Midland Co, the rules do not go far enough.

Questioning is also expected to address the possibility of resetting quotas laid out by Congress in 2007. Critics say the agency has overstepped its authority in setting the latest targets below those levels.

(Editing by Josephine Mason, Lisa Shumaker and Jeffrey Benkoe)