NPRA’s Drevna Testifies on 2007 Energy Bill Implications, RFS Provisions

Charles T. Drevna, President of NPRA, the National Petrochemical & Refiners Association, testified today before the Senate Energy and Natural Resources Committee expressing NPRA’s concerns with the renewable fuels standard (RFS) provisions of the 2007 Energy Independence and Security Act.

“Before Congress sent H.R. 6 to the President, the concerns about renewable fuels mandates and the unintended consequences for both American consumers and the environment were fully disclosed by a varied cross section of impacted interests,” Drevna told Committee members. “A new memorandum from U.C. Berkeley researchers to the California Air Resources Board warns of ‘indirect’ CO2 emissions increases greater than those of fossil fuels as a result of land use changes to accommodate a larger crop. Another report from a Nobel laureate warns that the use of crops ‘for energy production can readily lead to [nitrous oxide] emissions large enough to cause climate warming instead of cooling by “saved fossil CO2.”‘ Nitrous oxide is 300 times more potent than CO2 within the context of the climate debate. …

“The large volumes of renewable fuels mandated in the new law will essentially force fuel blends greater than E-10 into our nation’s gasoline supply. Preliminary analysis indicates these blends must be available to meet the mandate by as early as 2010 — less than two years away. The only vehicles capable of running such blends are E-85 vehicles. For blends between E-10 and E-85 to be viable in the fuel supply, automakers will have to certify that cars can run on these blends, and that consumers will have adequate warrantees. …

“The new law mandates the blending of 100 million gallons of cellulosic in 2010. The Food and Agriculture Policy Research Institute (FAPRI) estimates a shortfall of 73 million gallons for the 2010 cellulosic target. The safety valve or waiver provision of the RFS is inadequate. It provides for a ‘too little/too late’ retrospective attempt to address potential renewable supply shortfalls.

“Despite the challenges I’ve discussed, it’s the refiners and blenders who are liable under the new law, regardless of biofuel supply shortages. We are held responsible, but more importantly, the consumer ultimately pays if the renewable industry fails to produce. It’s hardly fair, but it’s the reality in the new law.”

NPRA members include more than 450 companies, including virtually all US refiners and petrochemical manufacturers. Our members supply consumers with a wide variety of products and services used daily in their homes and businesses. These products include gasoline, diesel fuel, home heating oil, jet fuel, lubricants and the chemicals that serve as “building blocks” in making everything from plastics to clothing to medicine to computers.