WASHINGTON, D.C. – At today’s Senate Homeland Security and Governmental Affairs Committee hearing entitled, “Re-examining EPA’s Management of the Renewable Fuel Standard Program,” U.S. Senator Joni Ernst (R-IA) highlighted the proven success of RFS to encourage innovation in renewable fuels, drive investment in research and development, increase consumer choice, and boost production and infrastructure critical to Iowa.

Senator Ernst pressed the Environmental Protection Agency (EPA) Office of Air and Radiation Assistant Administrator Janet McCabe on an unanswered invitation for the EPA Administrator to visit Iowa and see the impact of the agency’s decisions firsthand. The Iowa Senator also asked Ms. McCabe for an explanation of the agency’s willingness to overlook congressional intent in setting renewable volume obligations (RVOs) within RFS.

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TRANSCRIPT

SENATOR ERNST: Mr. Chair, thank you Ranking Member Heitkamp for this wonderful discussion we will be having this morning. I appreciate the opportunity. And thank you Ms. McCabe for joining us today. I would like to start off by saying thanks so much. We do know that you are working very hard in this area, so I appreciate that. I appreciate your testimony. And I believe personally that this is not only an economic issue, but of course a national security issue as well.  This Committee does have a history of working together across the aisle on security and good governance matters, and I look forward to working with my colleagues on this important topic. Clean and renewable energy is a topic that everyone in America can get behind.  And over the years, the RFS has proved successful at driving innovation and effective options for consumers at the pump. And, as many of you may know, Iowa leads the nation in biofuels creation, producing 3.8 billion gallons of clean burning ethanol and 230 million gallons of biodiesel, and that’s from our 2013 numbers. We are also home to two state of the art cellulosic ethanol facilities, with another coming into production later this year.  Additionally, we boast retailers across the state that offer affordable ethanol and biodiesel blends to consumers.  When passed by Congress, the original intent of the RFS was to create consumer choice for clean fuel, by spurring investment in research, production and infrastructure.  Unfortunately, the EPA is now using the lack of infrastructure as an excuse for setting biofuels levels lower than originally mandated, which flies in the face of the law. This issue is of critical importance to the state of Iowa, as well as the nation.  Ensuring our domestic energy security and promoting innovation in the next generation of biofuels is crucial as we move forward. As you may know, Ms. McCabe, in February I invited EPA Administrator Gina McCarthy to visit Iowa and to see the impact of the delayed release of the RFS volumes. Additionally, last week, the entire Iowa delegation – Republican, Democrat – everyone, sent a letter to the Administrator urging her to hold a hearing on the RFS levels in our state. Can we expect either of these to happen?

MS. McCABE: Thank you Senator. I can’t speak for the Administrator’s schedule, but I can certainly take back to her that you raised this, this morning. And her office can respond.

SENATOR ERNST: Thank you.

MS. McCABE: In terms of the hearing, as I mentioned, we are holding a public hearing in Kansas City, Kansas. We have a regional office there. There’s great interest in this issue across the country, and it’s always a challenge for us to choose the location for the limited number of hearings that we’re able to have. And in this case, we felt that having a hearing in Kansas City was well located for many states that are very interested in this issue, and we have the support of our local office there. And we have, as of yesterday, I think we had about 250 people signed up, including a number of people from Iowa, so we’ll look forward to a very good attendance and robust attendance there.

SENATOR ERNST: Thank you, and if you would just please emphasize to her that that is an open invitation because we do want to see the EPA Administrator in Iowa to just experience some of the difficulties we have had with the lack of action on part of the EPA. If we could move on to infrastructure and congressional intent, in your testimony you cite lack of “available refueling infrastructure” as justification for not setting the RVOs higher. However, when Congress passed the RFS in 2005, only two types of waivers, waiver authorities were included and that was lack of supply and severe economic harm.  That conference committee rejected “available refueling infrastructure,” which would have severely limited consumer choice and the ability to get more of those biofuels into the marketplace. Despite a clear direction from Congress, EPA has now decided to use “available refueling infrastructure” as a condition to waive the standard even though Congress expressly rejected that when they set the law.  Can you explain why EPA is blatantly overlooking the law?

 MS. McCABE:  Sure, I’d be happy to discuss this. And of course, this an issue on which there are many views as well. I’m happy to explain ours. The language in the statute as you observe gives two reasons for EPA to waive the standards, and the one that we’re looking at here is the one that says, “inadequate domestic supply.” And I understand that there are some activity, there was activity in finalizing those words, but in fact those words are very simple in the statute. And do not, explicitly, say exactly what that means. And is often the case, it’s EPA’s job to reasonably interpret congressional language in implementing the statute. We lay this out at some length in our proposal, and I’d be happy to share that with you if you haven’t seen it. 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. That is where the value in greenhouse gas reduction and diverse energy supply, and as you say consumer choice, comes. And so when you have a situation where the fuels cannot in fact be delivered to consumers on the time frame that was set out in the statute, and Congress provided this waiver authority, we believe it’s a reasonable interpretation for us to reduce the volumes to a level that still will comply with Congress’ intent to drive the fuels. This was a big thing that Congress did in the RFS. It was calling for big and significant change and the program stretches out over a number of years. And in order to change a system in this dramatic a way, it is taking time. As we believe that looking over the history of this program in 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. 

SENATOR ERNST: I thank you. I know my time has expired. I would argue that we are caught in a very vicious cycle with the producers not knowing what that volume will be, so we actually delayed production and research, and the furthering of those types of fuels. So without the standards being set, we don’t know where to go. So I just continue to state we need reliable energy sources for all of our consumers. We would like them to make that choice. But thank you very much, Mr. Chair.

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