On December 18, 2013, President Obama announced that he will nominate Senator Max Baucus (D-MT) to be the next Ambassador to China. The nomination is expected to pass quickly and without much opposition. Senator Baucus serves as the Chair of the Senate Committee on Finance, the tax writing Committee. When he leaves the Senate, current Senate Committee on Energy and Natural Resources Chair Ron Wyden (D-OR) is expected to assume the chairmanship.
These moves will impact the fate of incentives for the biofuels and renewable chemicals and products industries, including whether and when the Senate considers a tax extenders package, or tax reform, among other tax policies impacting the industry.
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.
Attendees at the Society for the Commercial Development of Industrial Biotechnology's (SCD-iBIO) 2nd Annual "Commercializing Global Green" forum in Philadelphia this week participated in a practical, in-depth three-hour workshop presented by the Biobased and Renewable Products Advocacy Group (BRAG™) on the critical policy, legislative, and regulatory issues impacting the commercialization of renewable chemicals. Lynn L. Bergeson, Managing Partner of Bergeson & Campbell, P.C. (B&C®) and Of Counsel with BRAG, shared the latest developments from Capitol Hill on the Chemical Safety Improvement Act of 2013 (CSIA) (S. 1009), in what she referred to as a "groundbreaking legislation" with bi-partisan support. Ms. Bergeson cautioned that "many difficulties remain and the likelihood of success is unclear." Ms. Bergeson also emphasized the need for the biochemical industry to engage with the U.S. Environmental Protection Agency (EPA) and identified strategies for companies to move successfully new chemicals through the regulatory process with EPA under the current version of the Toxic Substances Control Act (TSCA).
Kathleen M. Roberts, Executive Director of BRAG, updated workshop attendees on BRAG's efforts to petition for partial reporting exemptions under the TSCA Chemical Data Reporting (CDR) rule, and other efforts BRAG is making to level the regulatory playing field for biobased chemical manufacturers. Attendees learned about the complexities surrounding byproduct reporting under the CDR. They also learned that a number of listed chemicals, mainly derivative of the petroleum process stream, are exempted from Part III reporting, but those from renewable feedstocks are not, so the renewable chemicals may face higher regulatory hurdles than manufacturers anticipate. BRAG will be petitioning EPA early in 2014 for exemptions using a list of Chemical Abstract Service (CAS) numbers provided by members, and Ms. Roberts urged renewable chemical manufacturers to contact her to be included on this list.
Copies of BRAG's workshop presentations are available by contacting Chad Howlin at Tags: TSCA, workshop
On October 30, 2013, the Conference Committee selected to merge the House and Senate versions of the next five-year Farm Bill met to begin formal negotiations. This Farm Bill Conference Committee is comprised of 41 bi-partisan Members of the U.S. House and Senate.
Though Farm Bill Conference Committee negotiations are expected to be difficult, pressure is on Members of Congress to pass a final version of the next five-year bill by the end of this year. If it fails to do so, farm policy will be governed by an outdated supply-side permanent law from 1949. In that situation, milk prices would be expected to increase sharply, among other things. In addition, the old law includes nothing to cover or help promote renewable energy, including biofuels and renewable chemicals.
Earlier this year, the U.S. Senate passed its version of the next five-year Farm Bill, S. 954, including funding for farm, nutrition, and energy programs. Importantly, the Senate bill continues and provides mandatory funding for existing Farm Bill energy programs and extends eligibility to renewable chemicals. It includes $4 billion in cuts to nutrition programs. After failing to pass a combined bill, the U.S. House of Representatives passed a "farm-only" bill this summer and then a separate "nutrition-only" bill cutting $40 billion in food stamps. The House farm-only Farm Bill contains an energy title without mandatory funding that will instead be subject to annual appropriations, and it does not extend the energy programs to renewable chemicals.
The biofuels and renewable chemicals industries continue efforts to gain support for an energy title that would support their development and include mandatory funding in the final version of the next Farm Bill.
On October 29, 2013, hundreds of parents and children participated in a "stroller brigade" on Capitol Hill during which they lobbied Senate offices to provide greater protections against harmful chemicals during reform of the Toxic Substances Control Act (TSCA). The stroller brigade also joined actress Jennifer Beals at a press conference on TSCA reform sponsored by the Safer Chemicals, Healthy Families Coalition.
Following the July 31, 2013, Senate Environment and Public Works hearing on TSCA reform, Committee Members reportedly continue negotiations on S. 1009, the bi-partisan TSCA reform bill sponsored by Senator David Vitter (R-LA) and the late Senator Frank Lautenberg (D-NJ). The Biobased and Renewable Products Advocacy Group's (BRAG™) previous report on the bill and hearing is available online.
Also on October 29, 2013, the Center for Progressive Reform released a report critical of TSCA and the two current Senate bills designed to reform it, S. 1009 and S. 696, which is sponsored by the late Senator Frank Lautenberg (D-NJ). The report, "TSCA Reform: Preserving Tort and Regulatory Approaches," makes several specific recommendations for reform, including making it easier for EPA to obtain toxicity data from chemical manufacturers. A copy of the report is available online.
Biofuels supporters and opponents remain heavily engaged in RFS policy issues. Last week, we reported on a news report that one advanced biofuels trade association, the Advanced Biofuels Association (ABFA), may be working with the American Petroleum Institute (API) on potential legislative language that would provide additional RIN credit for advanced biofuels under the federal RFS program. Since then, ABFA and API have both denied the accuracy of the story. In addition, DuPont announced that it has relinquished its membership in the ABFA and reaffirmed its commitment to advocating that the RFS is working as intended to promote the investment in and development of biofuels and should not be altered in any way through legislation at this point in time.
James C. Greenwood, current President and CEO of the Biotechnology Industry Organization (BIO) and former Member of Congress, sent a letter to the leaders of the House Committee on Energy and Commerce and the Senate Committee on Environment and Public Works asserting that the broad consensus among the biofuels industry, including the advanced biofuels industry, is that now is not the time to legislate on the RFS.
API has continued its opposition to the RFS by announcing that it plans to sue EPA if it fails to issue the final rule setting the 2014 RFS renewable volume obligations (RVO) by November 30, 2013. While the law mandates that EPA issue in final the following year's RVOs by November 30, EPA has consistently missed that deadline. This is the first time API has threatened to sue the Agency if it does not meet the November 30 deadline.