On March 26, 2015, Representative Todd Young (R-IN) introduced H.R.
1665, the Alternative Fuel Tax Parity Act, to amend the Internal Revenue Code
of 1986 to equalize the excise tax on liquefied natural gas (LNG) and liquefied
petroleum gas (propane). This legislation would attach federal tax
parities for LNG and propane to the Alternative Fuel Tax Credit (AFTC) that
currently covers alternative fuel mixtures, alcohol fuel, and biodiesel. The
AFTC has expired and is awaiting renewal. If H.R. 1665 is attached to the AFTC,
LNG and propane would be taxed based on their energy output rather than volume,
changing the tax on LNG from 24.3 cents-per-gallon to 14.1 cents-per-gallon and
the tax on propane from 18.3 cents-per-gallon to 13.2 cents-per-gallon. The
bill is intended to level the playing field by taxing LNG and propane at the
same energy based rate as gasoline. Gasoline is currently taxed at 18.3
On March 26, 2015, Senators Rand Paul (R-KY) and Chuck Grassley
(R-IA) introduced S. 899, the
Fuel Choice and Deregulation Act of 2015, a bill to provide
regulatory relief to alternative fuel producers and consumers. The bill would
require EPA to provide a volatility waiver to E15, allowing the higher ethanol
blend to be sold year round. Fuels have volatility limits in the summer to prevent
excess evaporation that results in smog. Some areas cannot obtain the
lower-volatility gas that would be able to be mixed with the ethanol and sold.
Because of this situation, E15 cannot be sold in the summer in some areas.
Also, to avoid consumer confusion and investment in infrastructure in a product
that has limited sales, many retailers choose not to carry E15 at all. A
similar waiver is already granted for E10 that allows the fuel to be sold
through the summer even if it exceeds volatility limits.
On March 30, 2015, the U.S. Environmental Protection Agency (EPA) withdrew
a Direct Final Rule for Partial Exemption of Certain Chemical Substances from
Reporting Additional Chemical Data. The direct final rule, issued
in January 2015, would have exempted manufacturers of six biobased diesel
chemicals from reporting processing and use information for the compounds under
the Chemical Data Reporting (CDR) rule. It resulted from a regulatory petition
filed by the Biobased and Renewable Advocacy Group (BRAG®). The EPA
decision to withdraw the rule was in response to a single comment posted during
the short comment period.
Kathleen Roberts, BRAG's Executive Director, stated: "Albeit
disappointing, the response is not unexpected given the strict procedures
associated with direct final rules. EPA has stated it plans to proceed with a
proposed rulemaking to list the chemicals soon and we will urge them to move as
quickly as possible. Our hope is EPA can complete the rulemaking process in
time for the next reporting CDR cycle, which starts in June 2016."
Until the new rule is completed, manufacturers of the six affected
biobased diesel chemicals should be prepared to submit processing and use
information under the CDR in 2016.
EPA is accepting public comments through May 26, 2015, on two
proposed information collection requests (ICR) published in the Federal
Register on Tuesday, March 24, 2015. The proposed ICRs concern projected
cellulosic biofuels volumes and gasoline containing greater than 10 volume
percent ethanol up to 15 volume percent ethanol (E15). Comments received will
assist EPA as the agency prepares to submit the final ICRs to the Office of
Management and Budget (OMB) for its official approval and dissemination.
In the first proposed ICR on "Cellulosic
Production Volume Projections and Efficient Producer Reporting,"
EPA is seeking to collect information from potential cellulosic biofuel
producers to aid in determining the annual volume standards. In the second
proposed ICR on "Recordkeeping
and Reporting Related to E15 (Renewal)," EPA is seeking
comment on recordkeeping and reporting items related to the legal use of E15 in
On March 12, 2015, Christopher Grundler, Director of EPA's Office
of Transportation and Air Quality, signed the Notice
Of Opportunity to Comment on an Analysis of the Greenhouse Gas Emissions
Attributable to Production and Transport of Pennycress (Thlaspi Avense) Oil for
Use in Biofuel Production. This notice states that biofuels
produced from pennycress oil could qualify as biomass-based diesel or advanced
biofuel when they are produced using typical fuel production process
technologies. The notice is the result of an analysis of the greenhouse gas
(GHG) emissions that come from the production and transport of pennycress oil.
According to the analysis, pennycress oil has less than or equal GHG emissions
per ton of oil than soybean oil when accounting for crop inputs, crushing,
extraction, and direct and indirect land use change. Soybean oil and pennycress
oil are expected to also have the same fuel yield per pound of oil. This means
that pennycress oil-based biofuels could produce less GHG than soybean
oil-based biofuels. The notice has not yet been published in the Federal
Register, but once posted will be found at the soon to be opened Docket No.
EPA-HQ-OAR-2015-0091. Comments will be open for 30 days after publication.
Coalition of Minnesota is advocating strongly for two bills in the
state that if passed would result in a two-year, $5 million production
incentive for producers, and a capital loan equipment program. The bills, HF
536 and SF
517, would benefit companies that develop biochemicals, advanced biofuels,
and anaerobic digestion projects. There is concern, however, that the
legislation would increase the production of corn rather than encourage the
production of crops that do not require the same heavy use of fertilizer as
corn. Citing concerns about fertilizer runoffs in the river, combined with corn
being an easy source to convert to biofuel, the Minnesota Environmental Partnership
and Friends of the Mississippi River
have suggested amending the bills to: (1) require biofuel refineries receiving
the production incentive to have at least 50 percent of their feedstock come
from perennials; and (2) pay incentives to farmers who switch from corn to
perennials. HF 536 has already been changed to include a 20 percent bonus for
the use of perennials over corn. It is likely that both bills will continue to
change to reflect continued concerns about water quality in Minnesota.
On March 7, 2015, the 2015
Iowa Ag Summit brought together several
Republican Presidential hopefuls to discuss agricultural issues,
including the Renewable Fuel Standard (RFS), in the United States. The
potential candidates present at the summit included former Governor Jeb Bush
(R-FL), Governor Scott Walker (R-WI), Senator Ted Cruz (R-TX), Senator Lindsey
Graham (R-SC), former Governor George Pataki (R-NY), former Governor Mike
Huckabee (R-AR), former Senator Rick Santorum (R-PA), and former Governor Rick
Perry (R-TX). Walker, Bush, and Graham all stated that they supported the RFS,
with Walker stating that he "believes in a free and open market ... but it
is an access issue, so it is something that I am willing to go forward on,
continuing the RFS." Graham also appreciated how the RFS has improved the
United States' energy independence. Cruz and Perry both support biofuels but
Cruz does not think that the federal government should allow the market to
dictate what renewable energy sources succeed, while Perry stated that biofuels
are more of a state issue than a federal issue. Generally, the potential
candidates seemed to be pro-biofuels, a stance that was very popular at the
Iowa Ag Summit. Many Iowa farmers produce crops that are used as biomass to
make biofuels and renewable chemicals. While many of the possible candidates
indicated their support for biofuels, they were generally more restrained in
their support for the RFS, with some suggesting that the RFS should only be
used in the short term or that the RFS should be re-worked on a state level, or
changed so that implementation was encouraged but voluntary.