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McNerney Opening Remarks at Biofuels Hearing

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Date:
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Rep. Jerry McNerney delivered the following remarks at a Subcommittee on Environment hearing on "Advanced Biofuels Under the Renewable Fuel Standard: Current Status and Future Prospects:"

Good morning.

An important goal of the Renewable Fuel Standard program is to promote fuel diversity and lower consumer and environmental costs of transportation fuels. Until Congress created the RFS program, the transportation sector relied exclusively on fossil fuels. Our over-dependence on these fuels has made consumers and our economy vulnerable to price spikes and supply disruptions at various times in the past. Decades of fossil fuel use have unleashed massive volumes harmful air pollutants and carbon emissions. Developing cleaner fuels must be part of the solution to these on-going challenges.

Growth in the use of advanced biofuel falls far short of what Congress anticipated when this program was expanded in 2007. The industry has made progress, but technical and economic challenges are still holding back greater use of these fuels. I believe the witnesses here today will be offering some suggestions on how we can improve the investment and marketing climate for advanced renewable fuels.

The advanced biofuel program is very important to California. This federal program helps California to meet its goals for low carbon fuels. Regulatory programs like California's low carbon fuel standard and the federal RFS program provide the early market incentives needed to spur investment in cleaner fuels. Biodiesel, biogas, and cellulosic ethanol are needed to reduce carbon emissions and other harmful air pollutants from the transportation sector.

Reducing carbon emissions from the transportation sector is a big challenge. But, it is one we must take on since the emissions in this sector continue to grow. The good news is that, despite the challenges, investments in alternative fuels are being made. And, these investments are creating jobs and increasing the supply of alternative fuels in California. There are several facilities in my district and a new biogas facility is under construction now as well. If we want to see these investments continue, investors must be convinced there will be a market for these fuels.

The uncertainty created through EPA's delays in rulemakings and in the approval of new biofuel pathways are among the challenges with the RFS program that affect advanced biofuel investments. Clearly, the management of the program is an important factor in ensuring steady progress for new fuel technologies. Unfortunately, it appears that Administrator Pruitt has used waiver authority to create additional uncertainty in the renewable fuel markets. The Administrator's decisions to grant unprecedented numbers of waivers to some refiners through a process with no transparency calls into question the target amount of biofuel that the market and its participants will be using.

Conventional ethanol still makes up the bulk of the renewable fuel market. But, I suspect that in reducing the number of refineries obligated to blend biofuel will affect the market for all biofuels -- including biodiesel and advanced biofuels.

Whatever the faults of the RFS program, manipulating markets through a secret waiver process that calls the program into question is not the way to address those faults. Our Committee should be looking into this and ensuring the Administrator is managing the program in accordance with the law.

I want to thank all the witnesses for participating in the hearing today. I look forward to your testimony.


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