Politics

GOP may attach ethanol mandate reform to debt ceiling package

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Michael Bastasch Energy Editor

House Majority Leader Eric Cantor may attach legislation to reform the ethanol mandate to a debt ceiling package, the Oil Price Information Service (OPIS) reports.

Cantor’s comments were made during a July 25 meeting with top oil industry executives and lobbyists from organizations, including  Valero, Phillips 66, Chevron, and ExxonMobil.

“The Majority Leader listed a number of options to fix this issue [of the Renewable Fuel Standard]… then maybe we could try attaching it to a must-pass bill like the debt ceiling,” Cantor spokeswoman Megan Whittemore told OPIS. She did not say which other options were being considered.

Legislation to reduce or repeal the federal Renewable Fuel Standard (RFS) has already been introduced in the House, and the Energy and Commerce Committee is working on a bipartisan compromise to fix the controversial program.

“[A] handful of House Energy and Commerce Committee members have been working on possible RFS compromise options. Once Congress returns early next month, those lawmakers will ‘put together a policy framework of options to fellow energy committee members’… The options will likely run the gambit from full repeal to compromise reductions,” reports OPIS.

A source close to the issue told OPIS that during the August recess “a handful of House Energy and Commerce Committee members have been working on possible RFS compromise options” and will “‘put together a policy framework of options’ to fellow energy committee members” which could range from full repeal to reducing the mandate.

This may not be enough for refiners and the oil industry, which advocate for a complete repeal of the RFS. This year, refiners began to hit the “blend wall” — the point at which refiners are reluctant to blend more ethanol into the fuel supply for safety reasons — which sent prices for renewable fuel credits skyrocketing and led critics to blame the RFS for raising food and fuel prices.

The White House has publicly supported the RFS, reports OPIS, as White House energy and climate adviser Heather Zichal said that “[t]he backbone of the [climate] policy is the RFS” and that “calls to repeal the RFS are nothing but short sighted.”

Zichal did not say how the White House would treat efforts to reduce the federal blending requirements.

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