There is some optimism for the biofuels industry in the nation’s capital, in spite of the current election environment, attendees of the Christianson Biofuels Finance Conference learned in Minneapolis on Oct. 18.

Minnesota Rep. Collin Peterson predicted the renewable fuel standard (RFS) will remain in place, in his remarks to the group, suggesting the positions of those opposing the RFS are not that far removed from those supporting it. The gridlock in Congress is possible to overcome, he said, pointing to the willingness of Speaker Paul Ryan to let the committees do the work on some issues. Legislation dealing with the contentious GMO (genetically modified organism) issue and a five-year highway bill both were successfully addressed in committee and made it through Congress. If the leadership lets the committees work through such issues, more progress will be made, he predicted, though there are groups on both the Republican and Democratic sides of the aisles that want to obstruct anything supported by the other side. The commerce committee where energy legislation is worked on has been more politicized, he added, but he is hopeful that can change, and more progress can be made there.

Looking at the presidential candidates, Peterson said both have said they support the RFS. Trump has no understanding of agriculture, should he become president, so Peterson said it will depend upon him putting good people in charge. Coming from Arkansas, the Clintons could not have succeeded without an understanding of agriculture, he added.

The lame duck Congress offers the next best chance for some movement on one issue important to the ethanol industry, said Brian Jennings, executive vice president of the American Coalition for Ethanol, in his remarks to the biofuels finance group. Industry supporters are working to get relief on the Reid vapor pressure issue for E15 included in the must-pass budget bill. Jennings reported more than 50 cosponsors on the House side and 20 cosponors on the Senate side are supporting the language. “We’re trying to build as much momentum as we can.”  

The volumes for the RFS are due to come out on time this year, Jennings said. That will most likely be after the election in November, but before the end of the month. There is an outside chance the U.S. EPA will increase ethanol volumes marginally, he said, based on higher gasoline usage and the progress in the use of higher blends like E15. “We’re working with the administration to push that adjustment.” 

The litigation regarding EPA’s interpretation of its waiver authority used to adjust past renewable volume obligations (RVO) is moving painfully slowly, Jennings said. Eight organizations have sued the EPA. Legal briefs are now being exchanged and oral arguments likely to be scheduled for March or April. He did predict a final decision may come in the spring.

The next challenge for industry advocates is to work through the 400-page renewable enhancements and supports rule recently proposed by the EPA. While the intention is to improve the RFS, some details are problematic, Jennings said. Changing the language on flex fuel for blends from E16 to E30 include some details that could create problems, he explained, and ratcheting down the sulfur content allowance for natural gasoline widely used as a denaturant could hurt the sale of higher blends. Comments are expected to be due in December he added, with the agency signaling it will take most of the year to evaluate. A final rule is not expected until January 2018.

About 100 attended the biofuels finance conference, most from the ethanol industry, with a lighter representation from the biodiesel industry. Besides the keynote speakers addressing legislative and regulatory issues, other sessions covered risk management, meaningful reports, strategic planning, internal controls and other finance topics.