No Rules? No Renewable Fuel

Monday, March 13, 2017

Midwestern politicians, such as Sen. Rob Portman of Ohio, usually love mandates to blend more and more ethanol into our gasoline. In fact, Portman cites ethanol as one way to “lower gas prices and create jobs.”

So it’s surprising that Portman is leading efforts to subject all new rules to an unrelenting gauntlet of regulatory roadblocks. He is leading Senate efforts to pass the Regulatory Accountability Act, which could require endless studies of potential alternatives to regulations and subject new rules to layers upon layers of judicial review and congressional approval.

It’s not just health, safety, and worker and consumer protection rules that would be blocked by legislative efforts to – in the words of Trump's chief strategist Steve Bannon – “deconstruct the administrative state.”

One of the likely victims of Portman’s regulatory roadblocks would be the Renewable Fuel Standard. Every year, the Environmental Protection Agency is required to set the amount of ethanol allowed to be blended into gasoline through a Renewable Volume Obligation.

But if the Senate passes the House version of the Regulatory Accountability Act, it’s likely that the EPA will never be able to implement the Renewable Fuel Standard.

That’s because the EPA would have to consider scores of alternatives before setting the annual Renewable Volume Obligation – and then undergo two rounds of review by judges now charged with second-guessing the agency’s math.

If the EPA manages to clear those hurdles, the annual volume obligation would also have to be approved by both the House and the Senate. Even under the best of circumstances, the EPA has frequently failed to meet the deadlines imposed by the Renewable Fuel Standard, riling biofuel markets. In addition, most annual volume obligations have been subject to legal challenges.

Now Portman’s bill would add even more layers of agency, court and congressional review to the dysfunctional Renewable Fuel Standard process.

Why would an Ohio senator who claims to support pro-ethanol legislation work to make it harder to implement the Renewable Fuel Standard? Could it be that passage of the Regulatory Reform Act is a big priority for oil companies that want to eliminate the standard?

Rules are not just good for consumers. Good rules that provide regulatory certainty are also good for business. While there certainly are important reforms needed for the Renewable Fuel Standard, making it harder to produce annual Renewable Volume Obligations is not one of them.


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