There have been several efforts in the last few weeks to convince the Obama Administration to reconsider its proposal to reduce the 2014 Renewable Fuel Standard (RFS) statutory renewable volume obligations (RVO) for advanced and total renewable (corn ethanol) biofuels, and to maintain in 2014 and 2015 the status quo for biodiesel. Senators David Vitter (R-LA) and Benjamin Cardin (D-MD) are expected to introduce a bill in the coming weeks, which would amend the RFS and reduce its corn ethanol targets.
On December 18, a group of 16 Senators met with EPA Administrator Gina McCarthy to urge EPA to maintain the statutory 2014 RFS RVOs for advanced and total renewable fuels. They argued that the proposed reductions are unnecessary given expected production and that they would harm their respective state economies and the energy diversity and security of the United States. On the same day, Senator Heidi Heitkamp (D-ND), who had attended the meeting, sent a letter to Administrator McCarthy expressing her concerns about EPA's RFS proposed rule. A copy of the letter is available online.
Also on December 18, 2013, 54 Members of the House of Representatives from 24 states sent a letter to the leaders of the EPA, U.S. Department of Agriculture (USDA), and Office of Management and Budget urging that the RFS final rule increase the required volumes of biodiesel. A copy of the letter is available online.
On December 20, 2013, the Governors of six Midwestern states sent a letter to President Obama expressing their concerns about the RFS proposed rule. They also urged the Administration to maintain the statutory RFS RVOs for total renewable fuel and raise the biodiesel requirements for 2014 and 2015. A copy of the letter is available online.
LignoTech Developments Ltd. subsidiary Xylemer BioProducts of New Zealand will soon open a new facility in Kearney, Nebraska. The facility will produce biomass-based resins. Distillers grains will be the first feedstocks used, likely followed by sugar beet pulp and rice hulls.
On December 19, 2013, Cortec Corporation headquartered in St. Paul, Minnesota, announced its Patent Pending BioPad® product. The company states that BioPad® "is a unique flexible corrosion inhibiting device constructed from 100% biobased non-woven material, containing 66% biobased content. BioPad® provides an eco-friendly sustainable packaging option for corrosion inhibition and has been awarded USDA BioPreferredSM designation. It is specially designed with Vapor phase Corrosion Inhibitors (VpCI®) impregnated throughout the substrate." A copy of Cortec's press release is available online.
On December 31, 2013, Ironridge Global Partners, LLC, an institutional investor based in Los Angeles, California, announced that it has launched a green initiative designed to fund sustainable businesses, including emerging growth companies focused on environmental sustainability and environmentally-friendly products and services. As part of the initiative, Ironridge has provided over $6 million to Cereplast, Inc., a leading manufacturer of proprietary biobased, compostable and sustainable bioplastics, and its creditors. A copy of the press release is available online.
On December 23, 2013, the U.S. Department of Energy (DOE) announced that it was ending its funding of BlueFire Renewable's cellulosic production facility project in Fulton, Mississippi. DOE took this action because the company reportedly failed to meet deadlines related to financing the project. This news comes as the cellulosic industry continues to be under attack for failing to live up to expectations under the federal RFS.
Just before adjourning for its winter recess, the U.S. House of Representatives approved on December 13, 2013, by voice vote an extension of the 2008 Farm Bill through January 31, 2014. The vote is considered symbolic because Senate Majority Leader Harry Reid (D-NV) has asserted that the Senate will not consider an extension. Senator Debbie Stabenow (D-MI) and Representative Colin Peterson (D-MN), two of the principals leading Farm Bill negotiations, have reportedly stated that an extension is unnecessary since they expect to prepare in final a framework for the next Farm Bill to be passed by Congress before the end of January. Although the U.S. Department of Agriculture will be required, absent a new Farm Bill, to set up a supply-side management program after December 31, 2013, it is expected that Congress will pass a new five-year Farm Bill by the end of January 2014, when such a program would effectively be up and running.
It has been reported that the U.S. House of Representatives Energy and Commerce Committee's Subcommittee on Energy and Power Chair John Shimkus (R-IL) has listed reform of the 1976 Toxic Substances Control Act (TSCA) among his top priorities for 2014. Chair Shimkus has stated publicly that the House is still determining how best to draft and move TSCA reform legislation, but he expects a House TSCA reform bill to be introduced by the spring, with action on it likely next summer.
Chair Shimkus reportedly has also indicated that he expects no action on the Renewable Fuel Standard (RFS) in the House before the U.S. Environmental Protection Agency (EPA) promulgates its 2014 RFS rule. The oil and gas industry has been advocating for legislative action to repeal the RFS in spite of EPA's proposed 2014 RFS rule that would reduce required volume obligations for cellulosic biofuels, as well as advanced biofuels and corn ethanol. The biofuels industry has argued that no legislative action is needed given EPA's regulatory flexibility to modify gallon requirements as needed under the law.
On December 12, 2013, Representative Scott Peters (D-CA), Chair of the House Algae Caucus, introduced H.R. 3758, a bill to extend the $1.01/gallon second generation biofuel producer credit and the special allowance for second generation biofuel plant property. These incentives are among several currently set to expire at the end of the year.
Members of the House and Senate have sent letters to the Chairs and Ranking Members of their respective tax writing Committees -- the House Ways and Means Committee and the Senate Finance Committee -- urging the extension of ten clean energy incentives as soon as possible. Biofuels and biodiesel incentives are among those identified in the letter as important to extend until any broader tax reform legislation is passed.
The House is currently out on its winter break and will not return until January. There are promising signs that the House and Senate will work to pass retroactive extensions of incentives for the biofuels industry when they resume legislative business early next year.
Currently, there are two nearly identical proposals before Congress to provide a business related tax credit for the production of renewable chemicals. S. 1267, the Qualifying Renewable Chemical Tax Production Act of 2013, was introduced on June 27, 2013, by Senator Debbie Stabenow (D-MI). The bill has one co-sponsor, Senator Al Franken (D-MN). H.R. 3084, a bill by the same name, was introduced on September 12, 2013. It currently has five bi-partisan co-sponsors, including Representatives Richard Neal (D-MA), Scott Peters (D-CA), Linda Sanchez (D-CA), Allyson Schwartz (D-PA), and Steve Stockman (R-TX). A copy of S. 1267 is available online. A copy of H.R. 3084 is available online.
Iowa Governor Terry Branstad (R), Lieutenant Governor Kim Reynolds, and State Secretary of Agriculture and Land Stewardship Bill Northey led an effort to send a letter to EPA requesting it to convene a field hearing in Iowa on the Agency's proposed 2014 RFS rule. The letter was signed by the entire Congressional delegation from Iowa. A copy of the letter is available online.
EPA's proposed 2014 RFS rule would reduce the 2014 statutory gallon requirements for cellulosic biofuels, advanced biofuels, and corn ethanol. Governor Branstad testified at EPA's recent hearing in Arlington, Virginia, on the proposed rule that it would have detrimental effects on the biofuels industry and rural economy in his state and other Midwestern states. The Iowa delegation expresses in the letter the same concern, and argues that EPA should hold a field hearing in Iowa to hear from Midwestern farmers and producers who could not attend the Virginia hearing and who would be disproportionally impacted by the proposed reductions.