Charles T. Drevna, president of the American Fuel & Petrochemical Manufacturers (AFPM),
is calling on the US Congress to repeal the nation's Renewable
Fuel Standard (RFS), saying the program was based on erroneous
Drevna testified Tuesday at a House Subcommittee on Energy
and Power hearing titled Overview of the Renewable Fuel
Standard: Stakeholder Perspectives."
Drevna characterized Congress enactment of the Energy
Independence and Security Act of 2007 as a contract with the
American people -- one which promised steps toward energy
independence and national security, along with
added environmental protections.
He said that one major component of this energy legislation was
the RFS, which called for massive amounts of renewable
fuels to be blended into the nations transportation fuel
In 2013, we now know that the RFS is a program based
upon erroneous market assumption, obstacles that prevent the
safe consumption of ethanol at increasing mandated levels, and
many other unintended negative consequences, Drevna said.
In short, Congress should declare the contract null and
void and repeal.
One of the most urgent problems with the RFS, according to
Drevna, is the E10 blendwall, which represents the maximum
amount of ethanol that can be blended safely into gasoline
without damaging engines.
This year, consumer consumption will fall short of meeting the
mandated volumes of ethanol that are required to be blended
into the fuel supply, he said. And, while refiners are often
not the party blending ethanol into gasoline, they are the
obligated party responsible for ensuring that all mandated
levels of ethanol are introduced into US fuel supply.
When the gasoline supply contains the maximum amount of ethanol
it can handle, as is expected this year, refiners must purchase
ethanol credits or Renewable Identification Numbers (RINs), to
make up the shortfall and show compliance with the RFS.
Drevna told the subcommittee that this blendwall has driven the
price of RINs from 4 to 7 cents in January to as much as $1.48
for the week of July 15, forcing refiners to make difficult
When refiners are unable to purchase sufficient RINs
for compliance, they may be left with only bad options, which
force them to reduce the amount of fuel they supply to the US
market. Likewise, importers of gasoline, also obligated
parties, will look elsewhere to market their product,
Drevna said the AFPM trade group is not anti-ethanol or
anti-biofuels, adding that both can play an important role in
the fuel mix if safely integrated into the fuel supply and
accepted by consumers.
"AFPM does, however, oppose mandates and subsidies because
they limit consumer choice, stifle innovation, and in the case
of the RFS, are harmful to consumers, he said.