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Ranking Member Vitter Hearing Summary Statement
U.S. Senate Committee on Environment and Public Works Subcommittee on Clean Air and Nuclear Safety “Oversight Hearing on Domestic Renewable Fuels”
December 11, 2013

Click here to read Sen. Vitter's letter to Administrator Adam Sieminski of the U.S. Energy Information Administration in lieu of the EIA's absence in today's hearing

Thank you, Chairman Boxer and Chairman Carper for convening today's hearing. I would also like to thank our witnesses for being here as well. With this limited opportunity for review of the program I'd like to commend you for being selected to testify.

Not present today are other stakeholders, like poultry producers, food products manufacturers, boat owners, motorcycle enthusiasts, small engine manufacturers, biodiesel producers, gas station owners, conservation groups, and even bakers. Many of these groups have sent letters that I ask be included in the record.

Further highlighting my point is the absence of the Energy Information Administration (EIA). We asked that the EIA be invited to testify and our request was denied. In an effort to conduct meaningful oversight we sent a letter to EIA this morning asking for their input.

The people who wrote the RFS had laudable goals in mind at the time, but it's time to admit that the RFS is a fundamentally flawed program that limps along year after year benefiting a small sector of our economy committed to government mandates, while simultaneously wreaking havoc on those required to participate...particularly the American consumer.

The USDA has said that the mandate played a part in driving up U.S. food prices 3 to 4% last year. The World Bank says that corn-based ethanol in the United States is driving up grain prices by as much as 8% worldwide.

So this program, which consumes approximately 40% of the corn we grow, leads directly to higher food prices. Even the EU figured this out -- in September they limited the amount of fuel that can be developed from food-based crops to 6%.

Automakers have announced that fueling your car with higher than 10 percent ethanol blends will void warranties. The American Automobile Association warns consumers not to fill up their cars with E15. So this program is a bad deal for people who drive in the United States as well.

While the program was intended to enhance our domestic energy security, it turns out its structure sometimes means that domestic corn ethanol made here in the U.S. is traded for imported Brazilian sugarcane ethanol. This ethanol shuffle happens not only at the federal level but also at the state level under California's low carbon fuel standard.

Each year since enactment, the lack of production of advanced biofuels in any meaningful volumes has forced EPA to reduce the cellulosic volume requirements. Still EPA exaggerates production, leaving refiners to either purchase more of a product that doesn't exist or pay a fine: That doesn't make sense.

Earlier this year, some in Congress, including myself, asked EPA to use their considerable flexibility under the statute to waive the required amounts of biofuels to be blended into our gasoline and diesel, thus avoiding the ethanol blendwall. Predictions made in 2007 of increasing fuel demand turned out to be just the opposite: demand is actually decreasing.

With the proposed 2014 Renewable Volume Obligations, EPA admitted the program is irretrievably broken, recognized the blendwall, and illustrated the RFS needs to be legislatively restructured from top to bottom.

In an honest attempt to help the drivers, low-income families, and consumers who suffer when corn prices are high, some propose changing the law to strike the requirement to blend corn-based ethanol into the gasoline supply.

That is commendable, but it is a half answer. The RFS includes four different mandates. Eliminating, limiting, or reducing only one will solve one problem, while potentially exacerbating or creating a host of others.

Taking a holistic approach at reviewing and restructuring the program is a bipartisan, multi-region approach Senator Cardin and I have discussed and continue to develop, fully expecting to craft a long-term policy solution to this outdated and increasingly burdensome mandate. We are building support along the way in discussions with Democrats and Republicans. We expect to accomplish this task very soon - early in the new year.

So the RFS program is a disaster for everyone affected by the program, including those trying to put food on the table. We need to address all components of the program. Failing to thoroughly reform the RFS could further lead to the unintended consequences that so often accompany a program mandated by politicians, implemented by bureaucrats, and foisted on consumers.

Again, I would like to thank Chairman Boxer for this hearing, and I look forward to hearing from all of our witnesses.

 

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