S. HRG. 113–739 

OVERSIGHT HEARING ON 

DOMESTIC RENEWABLE FUELS 

JOINT HEARING 

BEFORE THE

SUBCOMMITTEE ON CLEAN AIR 

AND NUCLEAR SAFETY 

OF THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

AND THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

DECEMBER 11, 2013 

Printed for the use of the Committee on Environment and Public Works 

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys 
OVERSIGHT HEARING ON 

DOMESTIC RENEWABLE FUELS 
U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

96–025 PDF 2015

S. HRG. 113–739 

OVERSIGHT HEARING ON 

DOMESTIC RENEWABLE FUELS 

JOINT HEARING 

BEFORE THE

SUBCOMMITTEE ON CLEAN AIR 

AND NUCLEAR SAFETY 

OF THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

AND THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

DECEMBER 11, 2013 

Printed for the use of the Committee on Environment and Public Works 

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys 
(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

BARBARA BOXER, California, Chairman 

MAX BAUCUS, Montana 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

SHELDON WHITEHOUSE, Rhode Island 

TOM UDALL, New Mexico 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

CORY A. BOOKER, New Jersey 

DAVID VITTER, Louisiana 

JAMES M. INHOFE, Oklahoma 

JOHN BARRASSO, Wyoming 

JEFF SESSIONS, Alabama 

MIKE CRAPO, Idaho 

ROGER WICKER, Mississippi 

JOHN BOOZMAN, Arkansas 

DEB FISCHER, Nebraska 

BETTINA POIRIER, Majority Staff Director 

ZAK BAIG, Republican Staff Director 

SUBCOMMITTEE ON CLEAN AIR AND NUCLEAR SAFETY

THOMAS R. CARPER, Delaware, Chairman 

MAX BAUCUS, Montana 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

SHELDON WHITEHOUSE, Rhode Island 

TOM UDALL, New Mexico 

BARBARA BOXER, California (ex officio) 

JEFF SESSIONS, Alabama 

JOHN BARRASSO, Wyoming 

MIKE CRAPO, Idaho 

ROGER WICKER, Mississippi 

JOHN BOOZMAN, Arkansas 

DAVID VITTER, Louisiana (ex officio) 
(III) 

C O N T E N T S 

Page 

DECEMBER 11, 2013 

OPENING STATEMENTS 

Boxer, Hon. Barbara, U.S. Senator from the State of California ........................ 1 

Vitter, Hon. David, U.S. Senator from the State of Louisiana ............................ 2 

Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland ................ 57 

Barrasso, Hon. John, U.S. Senator from the State of Wyoming .......................... 61 

Fischer, Hon. Deb, U.S. Senator from the State of Nebraska ............................. 67 

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 68 

Wicker, Hon. Roger, U.S. Senator from the State of Mississippi ........................ 70 

Carper, Hon. Thomas R., U.S. Senator from the State of Delaware ................... 71 

Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode Island ......... 72 

Sessions, Hon. Jeff, U.S. Senator from the State of Alabama ............................. 73 

Udall, Hon. Tom, U.S. Senator from the State of New Mexico, prepared 

statement .............................................................................................................. 141 

WITNESSES 

Grundler, Christopher, Director, Office of Transportation and Air Quality, 

Office of Air and Radiation, U.S. Environmental Protection Agency .............. 74 

Prepared statement .......................................................................................... 76 

Responses to additional questions from: 

Senator Boxer ............................................................................................ 86 

Senator Baucus .......................................................................................... 88 

Senator Carper .......................................................................................... 90 

Senator Cardin .......................................................................................... 92 

Senator Gillibrand ..................................................................................... 98 

Senator Vitter ............................................................................................ 99 

Senator Wicker .......................................................................................... 102 

Senator Fischer ......................................................................................... 104 

Chalk, Steven, Deputy Assistant Secretary for Renewable Power, U.S. Department of Energy ..................................................................................................... 106 

Prepared statement .......................................................................................... 108 

Responses to an additional question from: 

Senator Boxer ............................................................................................ 113 

Senator Carper .......................................................................................... 114 

Responses to additional questions from: 

Senator Cardin .......................................................................................... 115 

Senator Fischer ......................................................................................... 124 

Clark, General Wesley K. (Retired), Co-Chairman, Growth Energy ................... 145 

Prepared statement .......................................................................................... 147 

Responses to additional questions from: 

Senator Boxer ............................................................................................ 167 

Senator Cardin .......................................................................................... 168 

Senator Vitter ............................................................................................ 169 

Response to an additional question from Senator Wicker ............................ 171 

Collins, James C., Jr., Senior Vice President, DuPont Polymers and Industrial 

Biosciences, E.I. DuPont de Nemours and Company, Inc. ............................... 173 

Prepared statement .......................................................................................... 175 

Drevna, Charles T., President, American Fuel and Petrochemical Manufacturers .......................................................................................................................... 199 

Prepared statement .......................................................................................... 201 

Response to an additional question from Senator Carper ............................ 216 
Page

IV 

Drevna, Charles T., President, American Fuel and Petrochemical Manufacturers—Continued 

Responses to additional questions from: 

Senator Gillibrand ..................................................................................... 217 

Senator Vitter ............................................................................................ 219 

Senator Barrasso ....................................................................................... 223 

Holzfaster, Jon, Owner and Operator, Holzfaster Farm ...................................... 225 

Prepared statement .......................................................................................... 227 

Response to an additional question from Senator Vitter .............................. 236 

Faber, Scott, Senior Vice President for Government Affairs, Environmental 

Working Group ..................................................................................................... 237 

Prepared statement .......................................................................................... 239 

Responses to additional questions from Senator Cardin ............................... 246 

Response to an additional question from Senator Vitter .............................. 250 

Responses to additional questions from Senator Barrasso ........................... 251 

Response to an additional question from Senator Wicker ............................ 253 

Coleman, Brooke, Executive Director, Advanced Ethanol Council ...................... 254 

Prepared statement .......................................................................................... 256 

Responses to additional questions from: 

Senator Boxer ............................................................................................ 273 

Senator Carper .......................................................................................... 280 

Senator Cardin .......................................................................................... 286 

Response to an additional question from Senator Gillibrand ....................... 292 

Responses to additional questions from Senator Vitter ................................ 294 

ADDITIONAL MATERIAL 

LETTERS

Open letter to Congress, Eliminate the Corn Ethanol Mandate, from 

ActionAid USA et al. ............................................................................................ 384 

Letter to Senators Barbara Boxer and David Vitter from ActionAid USA 

et al. ...................................................................................................................... 385 

Letter to Wayne Allard, American Motorcyclist Association, from the Air 

Resources Board ................................................................................................... 387 

Letter to Representatives Ralph Hall and Eddie Bernice Johnson from the 

Alliance of Automobile Manufacturers et al. ..................................................... 389 

Letters to Senator John Barrasso from: 

American Frozen Food Institute ..................................................................... 390 

American Highway Users Alliance ................................................................. 392 

Americans for Prosperity ................................................................................. 393 

National Boating Federation ........................................................................... 394 

National Marine Manufacturers Association ................................................. 395 

Letter to Senators John Barrasso, Mark Pryor, and Pat Toomey from the 

National Taxpayers Union .................................................................................. 396 

Letter to Adam Sieminski, U.S. Energy Information Administration, from 

Senator David Vitter ............................................................................................ 397 

PRESS RELEASES

American Bakers Association, Bakers Continue Pressing for Changes to the 

Corn-Based Ethanol Program ............................................................................. 400 

American Fuel & Petrochemical Manufacturers, AFPM Endorses Renewable 

Fuel Standard Repeal Act ................................................................................... 401 

American Lamb Council et al., Sheep Industry Joins Sen. Barrasso in Move 

To Repeal Renewable Fuels Standard ................................................................ 403 

American Petroleum Institute, API welcomes bipartisan Senate proposal to 

end unworkable biofuels mandate ...................................................................... 404 

Growth Energy, Clark: Foreign Oil Threatens America’s National Security ..... 406 

National Cattlemen’s Beef Association, Livestock and Poultry Groups Urge 

Congress to Repeal the Renewable Fuel Standard ........................................... 408 

National Cattlemen’s Beef Association et al., Livestock and Poultry Groups 

Urge Congress to Repeal the Renewable Fuel Standard .................................. 410 

National Chicken Council, Livestock and Poultry Groups Urge Congress to 

Repeal the Renewable Fuel Standard ................................................................ 411 

National Council of Chain Restaurants, National Council of Chain Restaurants Lauds Senate RFS Repeal Bill ............................................................ 412 
Page

V 

Wyoming Petroleum Marketers Association, Wyoming Petroleum Marketers 

Support Barrasso Bill Repealing Renewable Fuel Standard ............................ 414 

ARTICLES

ActionAid USA, Biofuels, Food Security and Land Grabs ................................... 416 

Financial Times, The US must halt biofuel production to prevent a food 

crisis ...................................................................................................................... 418 

Food and Agriculture Organization of the United Nations, Biofuel development should not compromise food security, says CFS ...................................... 420 

Proceedings of the National Academy of Sciences, Recent land use change 

in the Western Corn Belt threatens grasslands and wetlands ........................ 422 

Rolling Stone, The Ethanol Scam ........................................................................... 430 

USA Today, The Editorial Board, Ethanol quotas pump money from your 

pocket: Our view .................................................................................................. 435 

The Wall Street Journal, Review and Outlook, Big Ethanol Finally Loses ....... 437 

The Washington Post, Editorial Board, Ethanol takes policy blow from the 

Environmental Protection Agency ...................................................................... 439 

STATEMENTS

The Alliance of Automobile Manufacturers ........................................................... 441 

The Association of Equipment Manufacturers ...................................................... 449 

The Society of Independent Gasoline Marketers of America and the National 

Association of Convenience Stores ...................................................................... 453 

REPORTS

ActionAid International USA, Biofueling Hunger: How US Corn Ethanol Policy Drives Up Food Prices in Mexico .................................................................. 462 

Committee on World Food Security, 40th Session, Rome, Italy, 7–11 October 

2013 ....................................................................................................................... 477

National Renewable Energy Laboratory, High Ethanol Fuel Endurance: A 

Study of the Effects of Running Gasoline with 15% Ethanol Concentration 

in Current Production Outboard Four-Stroke Engines and Conventional 

Two-Stroke Outboard Marine Engines ............................................................... 497 

MISCELLANEOUS

Approximate schedule for December 5 RFS hearing ............................................ 552 

(1) 

OVERSIGHT HEARING ON DOMESTIC 

RENEWABLE FUELS 

WEDNESDAY, DECEMBER 11, 2013 

U.S. SENATE, COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, SUBCOMMITTEE ON CLEAN AIR AND NUCLEAR SAFETY, 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, Washington, DC. 

The Committees met, pursuant to notice, at 9 a.m. in room 406, 

Dirksen Senate Office Building, Hon. Barbara Boxer (chairman of 

the full Committee) presiding. 

Present: Senators Boxer, Vitter, Carper, Sessions, Cardin, 

Whitehouse, Udall, Merkley, Inhofe, Barrasso, Crapo, Wicker, 

Boozman, and Fischer. 

OPENING STATEMENT OF HON. BARBARA BOXER, 

U.S. SENATOR FROM THE STATE OF CALIFORNIA 

Senator BOXER. The hearing of the EPW Oversight Hearing on 

Domestic Renewable Fuels will come to order. We changed the 

time, I really appreciate everybody’s cooperation, out of respect for 

a memorial service for Nelson Mandela. 

We are going to end this hearing at 11 a.m. So, I am going to 

be tough with the gavel, ask everybody to do a 3-minute opening 

statement, and you can stick to your 5 but I will use a hard gavel. 

So, after members, wherever we are at 10:15 a.m., we will call up 

the second panel so that we will have adequate time to hear from 

them. 

This oversight hearing is going to focus on the critically important Renewable Fuels Standard Program and EPA’s recent 2014 renewable fuel volumes. Congress created the RFS to promote a 

strong domestic renewable energy industry, reduce our dependence 

on foreign oil and cut dangerous emissions of carbon. 

In 2005, Congress established the program and set goals for the 

use of renewable fuels and in 2007 we expanded these goals and 

called for the increased use of renewable fuels such as cellulosic 

ethanol and advanced biofuels which can turn waste into fuel. The 

RFS is designed to promote the use of renewable fuels as transportation or jet fuel and home heating oil. 

The requirement to increase the use is designed to provide a 

clear and consistent market demand for these fuels. Congress also 

designed the RFS to be managed in a flexible way. So, the EPA 

issues rules to set annual volumes. It is important to note that the 

RFS uses tradable credits, or RINs, for each gallon of renewable 

biofuel produced in or imported into the United States. So, petro-
2 

leum companies can buy biofuel and obtain the RINs to demonstrate their compliance. 

So, it is a flexible program. And, according to the EPA, by 2022 

the RFS will displace over 13 billion gallons of gas and diesel, cut 

oil imports by more than $41 billion and reduce carbon pollution 

by 138 million metric tons. 

I think those are exactly the kinds of goals our country should 

be focused on, energy independence by expanding domestic production of renewable fuels and reducing dangerous pollution. And 

President Obama has recognized the importance of the RFS and he 

said ‘‘Biofuels have an important role to play in increasing our energy security, fostering rural economic development and reducing 

greenhouse gas emissions from the transportation sector.’’ 

I certainly agree with that statement. Advanced and cellulosic 

biofuels play a very important role in the RFS. And I personally 

believe that the Federal Government should promote their use. 

This industry got started during the most severe economic downturn in our Nation’s history and now, with sustained commitment 

to support renewable fuels, EPA projects that five companies in the 

U.S. will produce commercial scale cellulosic ethanol by 2014. And 

we know that several other companies are working to construct 

commercial scale cellulosic ethanol plants in 2015 and beyond. 

So, I am looking forward to this oversight hearing, to hearing 

from you on how this, how the new volumes effect you, whether 

you think it was a fair role for the EPA to play. And I think we 

have a lot to learn about this. But to me, the fundamental point 

is we need to be energy independent. We need to clean up the air, 

get dangerous carbon pollution out of the air. Those things say to 

me, we are on the right track. 

With that, I will call on Senator Vitter. 

OPENING STATEMENT OF HON. DAVID VITTER, 

U.S. SENATOR FROM THE STATE OF LOUISIANA 

Senator VITTER. Thank you, Chairman Boxer, for convening today’s hearing. And I also want to thank our witnesses for being 

here as well. Unfortunately not invited were many significant 

stakeholders like poultry producers, food products manufacturers, 

boat owners, motorcycle enthusiasts, small engine manufacturers, 

biodiesel producers, gas station owners, conservation groups. But 

many of these groups have sent letters and so I would ask unanimous consent that they be included in the record. 

Senator BOXER. Absolutely. 

[The referenced information follows:] 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 
45 
46 
47 
48 
49 
50 
51 
52 
53 
54 
55 

Senator VITTER. OK. Further highlighting my point is the absence of the Energy Information Administration. We asked that the 

EIA be invited to testify but, unfortunately, that request was denied. So, in an effort to conduct meaningful oversight, we sent a 

letter to EIA this morning asking for their input and certainly will 

receive that and make that part of the overall record. 

Senator BOXER. Yes. 

[The referenced information was not received at time of print.] 

Senator VITTER. The folks who wrote the RFS had laudable goals 

in mind at the time. But I believe it is really time to admit that 

the RFS is fundamentally flawed and limps along year after year, 

mostly benefiting a small sector of our economy committed to Government mandates while also causing real damage and dislocation 

to others, including the American consumer. 

A few facts. The USDA has said that the mandate played a part 

in driving up U.S. food prices 3 to 4 percent last year. The World 

Bank says that corn-based ethanol in the U.S. is driving up grain 

prices by up to 8 percent worldwide. The program consumes about 

40 percent of the corn we grow so, clearly, that drives higher food 

prices. Even the EU figured this out. In September, they limited 

the amount of fuel that can be developed from food-based crops to 

6 percent. 

Automakers have announced that fueling your car with higher 

than 10 percent ethanol blends will void warranties. The American 

Automobile Association warns consumers not to fill up their cars 

with E15. So, this program is really dangerous for folks who drive 

as well. Just a quick picture says that better than I can. It is now 

a real marketing push to advertise gasoline with no ethanol. 

Certainly the program was intended to enhance energy security. 

Certainly we all agree with that goal. But it actually turns out that 

its structure sometimes means that, for instance, domestic corn 

ethanol made here in the U.S. is actually traded for imported Brazilian sugarcane ethanol. 

Each year since enactment the lack of production of advanced 

biofuels in meaningful volumes has forced EPA to reduce the cellulosic volume requirement. Still, EPA, I think, exaggerates production, leaving refiners to either purchase more of a product that 

does not exist or pay a fine. And that is bad for consumers. 

Earlier this year, Congress, including myself, asked EPA to use 

their flexibility under the statute to waive the required amounts of 

biofuels to be blended into our gasoline. They have taken some action, but I am very concerned that is a temporary Band-Aid and 

we really need some more wholesale look at this law. 

So, I look forward to doing that, to that more holistic approach. 

[The prepared statement of Senator Vitter follows:] 

STATEMENT OF HON. DAVID VITTER, 

U.S. SENATOR FROM THE STATE OF LOUISIANA

Thank you, Chairman Boxer and Chairman Carper for convening today’s hearing. 

I would also like to thank our witnesses for being here as well. With this limited 

opportunity for review of the program I’d like to commend you for being selected 

to testify. 

Not present today are other stakeholders, like poultry producers, food products 

manufacturers, boat owners, motorcycle enthusiasts, small engine manufacturers, 

biodiesel producers, gas station owners, conservation groups, and even bakers. Many 

of these groups have sent letters that I ask be included in the record. 
56 

Further highlighting my point is the absence of the Energy Information Administration (EIA). We asked that the EIA be invited to testify and our request was denied. In an effort to conduct meaningful oversight we sent a letter to EIA this morning asking for their input. 

The people who wrote the RFS had laudable goals in mind at the time, but it’s 

time to admit that the RFS is a fundamentally flawed program that limps along 

year after year benefiting a small sector of our economy committed to government 

mandates, while simultaneously wreaking havoc on those required to participate— 

particularly the American consumer. 

The USDA has said that the mandate played a part in driving up U.S. food prices 

3 to 4 percent last year. The World Bank says that corn-based ethanol in the United 

States is driving up grain prices by as much as 8 percent worldwide. 

So this program, which consumes approximately 40 percent of the corn we grow, 

leads directly to higher food prices. Even the EU figured this out—in September 

they limited the amount of fuel that can be developed from food-based crops to 6 

percent. 

Automakers have announced that fueling your car with higher than 10 percent 

ethanol blends will void warranties. The American Automobile Association warns 

consumers not to fill up their cars with E15. So this program is a bad deal for people who drive in the United States as well. 

While the program was intended to enhance our domestic energy security, it turns 

out its structure sometimes means that domestic corn ethanol made here in the U.S. 

is traded for imported Brazilian sugarcane ethanol. 

Each year since enactment, the lack of production of advanced biofuels in any 

meaningful volumes has forced EPA to reduce the cellulosic volume requirements. 

Still EPA exaggerates production, leaving refiners to either purchase more of a 

product that doesn’t exist or pay a fine: That doesn’t make sense. 

Earlier this year, some in Congress, including myself, asked EPA to use their considerable flexibility under the statute to waive the required amounts of biofuels to 

be blended into our gasoline and diesel, thus avoiding the ethanol blend wall. Predictions made in 2007 of increasing fuel demand turned out to be just the opposite: 

demand is actually decreasing. 

With the proposed 2014 Renewable Volume Obligations, EPA admitted the program is irretrievably broken, recognized the blend wall, and illustrated the RFS 

needs to be legislatively restructured from top to bottom. 

In an honest attempt to help the drivers, low-income families, and consumers who 

suffer when corn prices are high, some propose changing the law to strike the requirement to blend corn-based ethanol into the gasoline supply. 

That is commendable, but it is a half-answer. The RFS includes four different 

mandates. Eliminating, limiting, or reducing only one will solve one problem, while 

potentially exacerbating or creating a host of others. 

Taking a holistic approach at reviewing and restructuring the program is a bipartisan, multi-region approach Senator Cardin and I have discussed and continue to 

develop, fully expecting to craft a long-term policy solution to this outdated and increasingly burdensome mandate. We are building support along the way in discussions with Democrats and Republicans. We expect to accomplish this task very 

soon—early in the new year. 

So the RFS program is a disaster for everyone affected by the program, including 

those trying to put food on the table. We need to address all components of the program. Failing to thoroughly reform the RFS could further lead to the unintended 

consequences that so often accompany a program mandated by politicians, implemented by bureaucrats, and foisted on consumers. 

Again, I would like to thank Chairman Boxer for this hearing, and I look forward 

to hearing from all of our witnesses. 

Senator BOXER. Senators, we are going to put your full statements in the record. We are speaking each 3 minutes. We must end 

this at 11 a.m. So I am going to, after we speak and the first panel, 

at 10:15 we will move to the second panel. 

I wanted to just say, to clear the record up, that three of the next 

six panelists were, in fact, supported by the Republicans, the minority, which is what we always do. So, your witnesses will be 

heard. We cannot hear from 25 witnesses, but you did choose three 

witnesses. 

We are going to go to Senator Cardin. 
57 

OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, 

U.S. SENATOR FROM THE STATE OF MARYLAND 

Senator CARDIN. Thank you, Madam Chair. 

I am a strong supporter of the Renewable Fuel Standards. It is 

important for energy security, for our environmental concerns. I am 

a strong supporter of the Clean Air Act and it is important for our 

economy. 

But I have serious concerns about our current program. I know 

that Senator Vitter has already put into the record some of the 

statements from other interests. The National Chicken Counsel 

and the American Bakery Association have concerns because of 

corn-based ethanol and its disruption to the cost of corn. 

As Senator Vitter pointed out, 40 percent of the domestic production of corn goes to fuel, and the poultry industry is very dependent 

upon the corn stock for the cost of the production of poultry in this 

country. Seventy percent is based in corn. The ethanol guaranteed 

market is there, but there is no guaranteed market for poultry. 

Poultry has to compete with other foods such as meat and pork, as 

well as on a global basis. 

I also will bring out concerns that we have under the current policy with the National Marine Manufacturing Association. I would 

like to introduce a copy of their statement as it relates to E15 and 

safety issues. 

There is a better way to structure the RFS program. It needs to 

be better balanced, for energy security, food security and motor 

safety. There are more efficient renewable energy sources in the 

advanced biofuels and that is where we should be focusing our attention. 

I join with Senator Vitter in concern in the way the EPA exercised its waiver authority on the blend wall issue. It also included 

the advanced biofuels in reducing volume which I thought made no 

sense whatsoever since the blend wall problem is concerning corn 

ethanol. 

I have been trying and working for change under the current 

law. At the 112th Congress, I introduced legislation that would 

make the volume cap sensitive to the market conditions of corn. 

This year, I am working with Senator Vitter to look for a practical 

way that we can preserve the Renewable Fuel Standard Program, 

more aggressive reductions on the volume mandates for corn-based 

ethanol, continued incentives for advanced biofuels in addressing 

the motor safety issues. 

Madam Chairman, our goal is to mitigate the concerns of fuel 

safety for all consumers and restore market fairness for traditional 

corn users and assure steady growth and opportunity for truly advanced biofuels from feedstock that do not compromise our food security. 

[The referenced statement follows:] 
58 
59 
60 
61 

Senator BOXER. Thank you, Senator. 

Senator Barrasso. 

OPENING STATEMENT OF HON. JOHN BARRASSO, 

U.S. SENATOR FROM THE STATE OF WYOMING 

Senator BARRASSO. Thank you, Madam Chairman. 

In my view, this hearing is long overdue. The Renewable Fuels 

Standard, the RFS, is among the most shortsighted energy policies 

that Congress has ever enacted. The RFS has left a wake of economic and environmental harm that must be put to an end. It has 

increased food prices for American families, it has increased fuel 

prices for American motorists, it has contributed to a dirtier environment and now the RFS threatens to cause widespread damage 

to engines, to fuel systems and our transportation fuel infrastructure. 

In June, I, along with Senators Pryor and Toomey, introduced S. 

1195, the Renewable Fuel Standard Repeal Act. This is a bipartisan bill and it would repeal the RFS in its entirety. To date, 17 

Senators have co-sponsored the bill, including Senators Boozman, 

Crapo and Inhofe, who are members of this Committee. 

I am pleased that a diverse coalition of stakeholders supports 

this bill including the National Cattlemen’s Beef Association, the 

National Chicken Council, the National Turkey Federation, the 

American Sheep Industry Association. I would also note that the 

editorial boards of USA Today, the Washington Post and the Wall 

Street Journal have all called for the repeal of this mandate. 

The debate over the RFS is not a debate between the oil industry 

and environmentalists. It is a debate between those who recognize 

that the RFS is fundamentally broken and those who do not. Environmental organizations such as the Environmental Working 

Group, which is represented here today, recognize that the RFS is 

broken. Global hunger organizations such as OXFAM and Action 

Aid also recognize the RFS is broken. 

Even the EPA recognizes the status quo cannot continue. Last 

month, the EPA took a small but historic step. The EPA proposed 

reducing the total volume of biofuels that suppliers must make 

available under the RFS. The EPA has proposed this reduction to 

address issues surrounding the so-called blend wall. The blend wall 

is the amount of ethanol that can be safely added to the Nation’s 

fuel supply. I applaud the EPA for taking this step and encourage 

the agency to make further reductions in its final rule. 

But make no mistake. The EPA cannot fix the Renewable Fuel 

Standards. Congress must weigh in and repeal this broken program once and for all. We must repeal the mandate that diverts 

corn away from kitchen tables and into gas tanks. This mandate 

has not only increased food costs for American families but has increased food costs for the world’s poor. This is why the Director 

General of the United Nations Food and Agricultural Organization 

called on EPA to suspend the RFS last year. 

In addition, we must repeal the mandate for biofuels that are not 

commercially available. For years, we have heard that the RFS 

would result in large scale production of advanced biofuels, but this 

has not happened. 
62 

And I am sorry that we are limited because I wanted to quote 

Democratic Senator Chuck Schumer on his concerns about this as 

well. 

So, with that I would like to put into the record my full statement, including the comments by Senator Schumer. 

[The prepared statement of Senator Barrasso follows:] 

STATEMENT OF HON. JOHN BARRASSO, U.S. SENATOR FROM THE STATE OF WYOMING

Thank you, Madam Chairman. And thank you for holding this important hearing. 

In my view, it’s long overdue. 

The Renewable Fuel Standard or the RFS is among the most short-sighted energy 

policies that Congress has ever enacted. 

The RFS has left a wake of economic and environmental harm that must be put 

to an end. 

The RFS has increased food prices for American families. 

The RFS has increased fuel prices for American motorists. 

The RFS has contributed to a dirtier environment. 

And—now—the RFS threatens to cause widespread damage to engines, fuel systems, and our transportation fuel infrastructure. 

In June, I—along with Senators Pryor and Toomey—introduced S. 1195, the Renewable Fuel Standard Repeal Act. This bipartisan bill would repeal the RFS in its 

entirety. To date, 18 Senators have cosponsored the bill, including Senators 

Boozman, Crapo, and Inhofe—members of this Committee. 

I’m also pleased that a diverse coalition of stakeholders supports this bill, including the National Cattlemen’s Beef Association, the National Chicken Council, the 

National Turkey Federation, and the American Sheep Industry Association. I would 

also note that the editorial boards of USA Today, the Washington Post, and the 

Wall Street Journal have all called for the repeal of this mandate. 

The debate over the RFS is not a debate between the oil industry and environmentalists. It’s a debate between those who recognize the RFS is fundamentally broken and those who don’t. Environmental organizations, such as the Environmental 

Working Group—which is represented here today—recognize the RFS is broken. 

Global hunger organizations, such as Oxfam and Action Aid, also recognize the RFS 

is broken. 

Even EPA recognizes the status quo cannot continue. Last month, EPA took a 

small, but historic step. EPA proposed reducing the total volume of biofuels that 

suppliers must make available under the RFS. EPA has proposed this reduction to 

address issues surrounding the ‘‘blend wall.’’ The ‘‘blend wall’’ is the amount of ethanol that can be safely added to the Nation’s fuel supply. I applaud EPA for taking 

this step, and I encourage the agency to make further reductions in its final rule. 

But make no mistake, EPA cannot fix the RFS. Congress must weigh in—and repeal this broken program once and for all. We must repeal the mandate that diverts 

corn away from kitchen tables and into gas tanks. 

This mandate has not only increased food costs for American families, but has increased food costs for the world’s poor. This is why the Director-General of the U.N. 

Food and Agricultural Organization called on EPA to suspend the RFS last year. 

In addition, we must repeal the mandate for biofuels that are not commercially 

available. For years, we have heard that the RFS would result in large scale production of ‘‘advanced biofuels’’—such as cellulosic ethanol. But this has not happened. 

It’s absurd to fine businesses for failing to purchase a product that doesn’t exist. 

Likewise, we should not require businesses to petition EPA—or the courts—for relief from this mandate year after year. We need sound energy policies—not artificial 

markets for fantasy fuels. 

Madam Chairman, the gig is up. The RFS may have seemed like a good idea in 

2005 or 2007. But it is nothing short of a colossal failure. 

The senior Senator from New York predicted this would happen years ago. He 

stated that the RFS would ‘‘haunt every one of us,’’ and ‘‘turn[ ] out to be a big disaster.’’ 

He compared the RFS to ‘‘a catastrophic illness . . . that should really have a skull 

and cross bones label on it.’’ 

He explained, ‘‘[t]here is no sound public policy reason for mandating the use of 

ethanol.’’ And that ‘‘[o]ur citizens’ health and environment are being held hostage 

to the desire of the ethanol lobby.’’ 

Madam Chairman, these aren’t my words. These are the words of the senior Senator from New York. 
63 

Madam Chairman, it’s time for this Committee to become relevant in this debate. 

It’s time for this Committee to take up legislation to repeal the RFS. It’s the right 

thing to do for American families, American motorists, and the environment. 

I thank the witnesses for taking the time to be here today. I look forward to your 

remarks. 

Senator BOXER. I think Senator Schumer will make his own voice 

heard very well on this matter. 

Senator BARRASSO. Well, I welcome that opportunity. 

[The referenced information follows:] 
64 
65 
66 
67 

Senator BOXER. With you. With you. OK. 

We are going to turn to Senator Merkley now. 

Senator MERKLEY. Madam Chair, I am happy to get right to our 

testimony. 

Thank you. 

Senator BOXER. Thank you very much. 

We will turn to Senator Fischer. 

OPENING STATEMENT OF HON. DEB FISCHER, 

U.S. SENATOR FROM THE STATE OF NEBRASKA 

Senator FISCHER. Thank you, Madam Chairman. 

I was pleasantly surprised to find out that a Nebraska farmer, 

Jon Holzfaster, would be among today’s witnesses. I appreciate 

Jon’s willingness to come to Washington to share his views and 

would like to offer him a warm welcome. 

Nebraskans certainly understand the importance of the Renewable Fuel Standard. Our State has answered the call to invest in 

domestic renewable fuel production. Nebraska has 24 active ethanol plants and an annual production of 2.3 billion gallons. These 

plants represent more than $5 billion in capital investment in the 

State and provide direct employment for approximately 1,200 Nebraskans. 

On a national scale, the RFS is working to enhance domestic energy supplies and reduce our dependence on foreign oil. Adding 

more than 13 billion gallons of domestic ethanol to the U.S. fuel 

supply in 2012 displaced the need for 465 million barrels of foreign 

oil at a savings of $47.2 billion to the U.S. economy. This is roughly 

the equivalent of 12 percent of total U.S. crude oil imports. The 

RFS also helps to support more than 380,000 American jobs and 

lower fuel prices for consumers. 

During the short time that the RFS has been in place, we have 

only become more efficient both at production of the biofuels themselves but also of the feedstocks for these fuels. Coming from the 

Cornhusker State, I am especially proud of our farmers’ ability to 

continually produce more while using less land, less water and less 

fertilizer. Through careful stewardship of our natural resources and 

the adoption of innovative technologies, our farmers are able to 

produce an abundant supply of food, feed and fuel in an environmentally sustainable manner. 

At such a time of this innovation and growth potential for the 

biofuels industry, it is concerning that EPA is now proposing a significant rollback in the RFS. EPA’s proposal essentially waives 

RFS requirements beyond a 10 percent blend of ethanol, eliminating the incentives to invest in the infrastructure necessary to 

bring higher blends to the marketplace and meet the goal of future 

biofuels growth. 

With that, I would like to have the rest of my comments put in 

the record, Madam Chair. 

Thank you. 

[The prepared statement of Senator Fischer follows:] 

STATEMENT OF HON. DEB FISCHER, U.S. SENATOR FROM THE STATE OF NEBRASKA

Chairman Boxer and Ranking Member Vitter, thank you for holding today’s oversight hearing on domestic renewable fuels. I am pleased that the Committee is tak-
68 

ing time to review our Nation’s biofuels policy and to scrutinize recent administrative action with respect to the Renewable Fuel Standard. 

I am glad that we will be hearing from witnesses who can share the perspective 

of many across our Nation who have made significant investments with the RFS in 

mind. I was pleasantly surprised to find out that a Nebraska farmer, Jon 

Holzfaster, would be among today’s witnesses. I appreciate Jon’s willingness to come 

to Washington to share his views and would like to offer him a warm welcome. 

Nebraskans certainly understand the importance of the Renewable Fuel Standard. Our State has answered the call to invest in domestic renewable fuel production. Nebraska has 24 active ethanol plants and an annual production capacity of 

2.3 billion gallons. These plants represent more than $5 billion in capital investment 

in the State and provide direct employment for approximately 1,200 Nebraskans. 

On a national scale, the RFS is working to enhance domestic energy supplies and 

reduce our dependence on foreign oil. Adding more than 13 billion gallons of domestic ethanol to the U.S. fuel supply in 2012 displaced the need for 465 million barrels 

of foreign oil, at a savings of $47.2 billion to the U.S. economy. This is roughly the 

equivalent of 12 percent of total U.S. crude oil imports. The RFS also helps to support more than 380,000 American jobs and lower fuel prices for consumers. 

During the short time that the RFS has been in place, we have only become more 

efficient—both at production of the biofuels themselves, but also of the feedstocks 

for these fuels. Coming from the Cornhusker State, I am especially proud of our 

farmers’ ability to continually produce more while using less land, less water, and 

less fertilizer. Through careful stewardship of our natural resources and the adoption of innovative technologies, our farmers are able to produce an abundant supply 

of food, feed, and fuel in an environmentally sustainable manner. 

At a time of such innovation and growth potential for the biofuels industry, it is 

concerning that EPA is now proposing a significant rollback in the RFS. EPA’s proposal essentially waives RFS requirements beyond a 10 percent blend of ethanol, 

eliminating the incentives to invest in the infrastructure necessary to bring higher 

blends to the marketplace and meet the goal of future biofuels growth. 

Lowering renewable fuel targets will jeopardize years of progress in the biofuels 

industry. I appreciate that EPA took the time to hear from so many stakeholders 

at its listening session on the RFS last week. I am hopeful that EPA will give careful consideration to the comments it receives and the economic impacts of its proposal. 

There is much at stake for America’s energy future. Ensuring the successful operation of the Renewable Fuel Standard is an important part of realizing greater domestic energy security. I look forward to today’s discussion. Thank you. 

Senator BOXER. Without objection. Thank you. 

Senator Inhofe. 

OPENING STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA 

Senator INHOFE. Yes, I agree with the comments that this is 

overdue. We had a hearing on this 2008. The one before that was 

2006 and that was when I chaired this Committee. And it is overdue. 

We can all remember the RFS was expanding back in 2007 and 

one of the main arguments was to improve our national security. 

I know that General Wes Clark is going to be on the next panel, 

and he has been on the dime at the ethanol industry now for several years. He has repeatedly accused the U.S. Government of 

fighting wars simply for foreign sources of oil, and in one of his 

interviews he quipped, put quite simply, that is what people fight 

wars about. 

Last Saturday was December 7th, and every year we remember 

the attack on Pearl Harbor. And for good reason. That is what 

drew us into World War II. Americans fight wars to protect their 

fellow Americans from evil harms. Period. That would mean that 

energy security and national security are disconnected. But if want 
69 

to have a conversation about that, we should look no further than 

the domestic oil and gas industry. 

Since 2008, the energy market has been turned upside down. The 

combination of precision drilling and hydraulic fracturing has 

opened up the Shale Revolution that no one saw coming. In 2007, 

oil production was down and we were in the middle of building 

massive terminals to import liquefied natural gas. Since then, oil 

production is up over 50 percent and we have so much natural gas 

that we are converting the import terminals into export terminals. 

And the news just keeps getting brighter. In October, the EIA 

published a report stating that the U.S. will overtake Russia this 

year as the largest oil and natural gas producer in the world. In 

November, the EIA reported that by 2035, we will be able to meet 

all of our energy requirements from domestic sources. I would say 

that it would be even sooner than that, quite a few years sooner 

than that, if we would start developing our resources on national 

land. General Clark should know quite a bit about this because he 

also is the Director of BNK Petroleum which is an oil and gas operation all over the world, including my State of Oklahoma. 

Last month, the EPA announced the 2014 volume requirements 

for the RFS mandate and for the first time ever the agency lowered 

the mandate levels across the board and, in doing so, the EPA has 

admitted the mandate is completely broken. I think we talked 

about that. No one believes that it is running right. I have been 

highlighting the mandate’s problem for a long time, and it is clear 

that the chorus of agreement is growing louder every day. 

Oklahomans of all stripes understand that the RFS is a bad deal 

and our drivers are particularly aware. Before I run out of time, 

put that chart up. All throughout Oklahoma, this is the marketing. 

If you can sell no ethanol and it is clear gas, they buy it. 

So, I have got a lot more to say here in this statement but let 

us roll with letting the market determine what we are doing. That 

is what I would hope this would come to. 

Senator BOXER. Well, we will put this in the record. And I hope 

people can refrain from attacking people. 

Senator INHOFE. I am not attacking anyone. 

Senator BOXER. If I might conclude? I would like people to refrain from personal attacks on people who believe that what they 

are doing is good for their country. There is just a disagreement. 

I do not think we need to attack each other. So, that is just an 

opinion. 

Senator INHOFE. And I agree. 

[The referenced statement was not received at time of print.] 

Senator BOXER. Thank you very much. 

And also for the record, let the record show that we had a hearing on this particular subject on April 13, 2011, where Secretary 

Vilsack was our main person who was the witness at that particular time. 

And we will move forward now to Senator Crapo. 

Senator CRAPO. Thank you, Madam Chairman. I will help to 

move this along and waive my opening statement. 

Senator BOXER. Thank you, Senator. 

Senator Wicker. 
70 

OPENING STATEMENT OF HON. ROGER WICKER, 

U.S. SENATOR FROM THE STATE OF MISSISSIPPI 

Senator WICKER. I believe Senator Crapo just yielded his 3 minutes to me, and I certainly appreciate that. 

[Laughter.] 

Senator WICKER. Thank you, Madam Chair, and Ranking Member Vitter. I look forward to the witnesses’ testimony on some of 

the significant problems many industries face because of the Renewable Fuel Standards. The sheer number of the parties concerned about the impacts of this legislation is a testament to the 

fact that this Committee and Congress should act to correct some 

of the consequences of renewable mandates. 

It says a lot that EPA recently was forced to lower the overall 

renewable volumes for 2014. Clearly the assumptions made in 2007 

regarding gas consumption have proven inaccurate. The mandates 

based on those assumptions are not feasible and should be modified. 

Allowing EPA flexibility to adjust RFS each year leads to one of 

the greatest problems with Government interference in the marketplace, uncertainty in the very industries that actually produce our 

country’s advanced technologies and products. These industries 

must be able to continue to move our country forward and create 

jobs needed to strengthen our economy. 

I agree with Senator Cardin about the effect fluctuating corn 

prices have had in recent years. High demand for corn ethanol 

caused by the RFS has led to higher costs for livestock and poultry 

producers, an unintended and adverse consequence of this program. This directly causes American families to face higher bills at 

the grocery store and in restaurants. America’s energy policy 

should promote efficiency and value. It should not hurt consumers 

or cause them to bear unnecessary costs. It is clear that the RFS 

falls short of this fundamental principle of U.S. lawmaking. 

In addition, regulatory action by the Administration disregards 

the facts and is shortsighted. In an ill-advised stop-gap rule, EPA 

has on several occasions waived the 10 percent limit of ethanol that 

can be blended into gasoline. Studies conclude that gasoline with 

15 percent ethanol, or E15, can cause premature engine damage 

and reduce fuel efficiency. These detrimental effects can force drivers to endure added maintenance costs and refuel more frequently. 

Last year, AAA raised these concerns when urging the Obama 

administration and gasoline retailers to stop the sale of E15. In addition, a number of auto manufacturers have already said that E15 

does not meet their fuel requirements and that warranty coverage 

would not apply to vehicle damage resulting from gasoline with the 

higher blend of ethanol. 

In February, I introduced legislation to prohibit EPA from allowing gasoline blends with E15 to be used in passenger cars and 

trucks. And finally, Madam Chair, I believe my legislation should 

be included in the necessary reforms of RFS. This legislation would 

protect consumers and not allow the Administration to make fictional fixes to ethanol mandates that are clearly not good for the 

public nor solve the actual problem. 

Thank you. 
71 

Senator BOXER. Thank you, Senator. We are going to—Senator 

Whitehouse has graciously said Senator Carper could go first because he is chairing a very important proceeding. Please proceed. 

OPENING STATEMENT OF HON. THOMAS R. CARPER, 

U.S. SENATOR FROM THE STATE OF DELAWARE 

Senator CARPER. Thank you so much. Sheldon, thank you, and 

to our witnesses. Thank you, Madam Chair, for giving me a chance 

to say a few words. We are having a business meeting of the Homeland Security and Government Affairs Committee to vote the nomination of the President’s nominee to be Deputy Secretary of Homeland Security. And it starts in about 6 or 7 minutes. So, thank you 

very much. 

First of all to our witnesses, thank you for joining us. Panel No. 

1, panel No. 2, especially Jim Collins who is out there somewhere, 

I think, one of my constituents from Delaware who does great work 

on BAF at DuPont Company and really for all of us. So, thank you, 

Jim. 

In 2007, our Nation’s energy future was not as bright as it is 

today. Consumption of gasoline and diesel was expected to grow exponentially, and feeding this growth was oil from other nations 

many of which, frankly, did not like us a whole lot and still do not. 

That is why in 2007 Congress took a number of steps, along with 

the Bush administration, to try to change our energy future. 

For example, Congress increased the Fuel Efficiency Standard for 

cars, trucks and vans for the first time in 32 years. As someone 

who worked very closely with Senators like Ted Stevens, Dianne 

Feinstein, Dick Durbin and others to help us find an agreement, 

I am very proud of this achievement. I know that our efforts laid 

the groundwork for future efficiency increases by the current Administration. 

In 2007, Congress also mandated a Clean Air Act by more than 

doubling the domestic biofuel mandate to 36 billion gallons by 

2022. We included new incentives for advanced fuels that were better for the environment and that were not derived from the food 

we eat or from the food that our chicken and our cattle eat, too. 

Since 2007, we have seen a change in the energy trend lines and 

our energy future looks a whole lot better than it has in decades. 

Today, for the first time in two decades, we are producing more oil 

than we are importing. I did not think I would be serving in the 

Senate when we could say that, but I am pleased to say that we 

are. That is because production at home has increased, consumption has gone down and biofuel use has increased replacing oilbased fuels. 

And finally today we are seeing the first commercial-scale advanced biofuel facilities that are being built providing an alternative to traditional corn ethanol. 

To keep us on the path toward a brighter, greener energy future, 

I believe it is important for this country to continue to invest in 

biofuels, especially in advanced biofuels. I believe the Renewable 

Fuel Standard is a crucial policy tool to keep these investment 

flowing. 

Biofuels done right are crucial to our energy security but we cannot ignore the unintended consequences of increasing our biofuel 
72 

mandates. Supporting investments in the next generation of renewable fuels while still protecting our environment and economy is no 

small feat. But it can be achieved. I look forward to today’s discussion once I return to see how we can strike that balance. 

On that note, I want to thank again our witnesses and thank 

you, Madam Chair, for giving me this opportunity. And I will be 

back a little bit later. 

[The prepared statement of Senator Carper follows:] 

STATEMENT OF HON. THOMAS R. CARPER, U.S. SENATOR FROM THE STATE OF DELAWARE

In 2007, our Nation’s energy future did not look good. Consumption of gasoline 

and diesel was expected to grow exponentially, and feeding this growth was oil from 

other nations—many of which didn’t like us very much. 

That’s why in 2007, Congress took several steps to try to change our energy future. For example, Congress increased the fuel efficiency standards for cars, trucks 

and vans for the first time in 32 years. As someone who worked very hard with Senators Feinstein and Stevens to help us find an agreement, I am very proud of this 

achievement. I know our efforts laid the groundwork for future efficiency increases 

by the Administration. 

In 2007, Congress also amended the Clean Air Act by more than doubling the domestic biofuel mandate to 36 billion gallons by 2022. We included new incentives 

for advanced fuels that were better for the environment and were not derived from 

the food we eat or the food our chickens and cattle eat. Since 2007, we have seen 

a change in the energy trend lines—and our energy future looks better than it has 

in decades. 

Today, for the first time in two decades we are producing more oil than we are 

importing. That’s because production at home has increased, consumption has gone 

down and biofuel use has increased—replacing oil-based fuels. And finally today, we 

are seeing the first commercial scale advanced biofuel facilities being built—providing an alternative to traditional corn ethanol. 

To keep us on the path toward a brighter, greener energy future, I believe it is 

important for this country to continue to invest in biofuels—especially in advanced 

biofuels. I believe the Renewable Fuel Standard is a crucial policy tool to keep these 

investments flowing. Biofuels done right are crucial to our energy security, but we 

cannot ignore the unintended consequences of increasing our biofuel mandates. 

Supporting investments in the next generation of renewable fuels, while still protecting our environment and economy is no small feat, but it can be achieved. I look 

forward to today’s discussion to see how we can strike that balance. 

And on that note, I look forward to having an open and thoughtful dialog with 

our witnesses and colleagues today. 

Senator BOXER. Senator, thank you so much. 

And finally, Senator Whitehouse. 

OPENING STATEMENT OF HON. SHELDON WHITEHOUSE, 

U.S. SENATOR FROM THE STATE OF RHODE ISLAND 

Senator WHITEHOUSE. Thank you, Madam Chair. 

Rhode Island has some exciting companies that operate in this 

space. We have Newport Biodiesel, which takes basically restaurant waste and turns it into useable fuel. We have BioProcess 

Algae which is running a plant right now in Shenandoah, Iowa and 

it grows algae off of the carbon waste of an ethanol plant and it 

can turn either into more fuel for ethanol manufacture or, if the 

algae is right, you can grow lipid rich algae that can actually be 

pressed out for oil that can be turned into fuel. So, there is great 

opportunity here in very exciting technologies, and I look forward 

to the hearing. 

I am glad that we stuck with the E10. I join with Senator Roger 

Wicker in supporting that. Rhode Island has a marine economy and 

the marine engines simply do not operate well at higher levels of 
73 

ethanol, and when you are out in the ocean that is no time to be 

messing around with your engine. So, I thank the EPA on their responsiveness on that. 

I do think we need to reconsider the value of ethanol, particularly ethanol produced in coal-fired facilities as a carbon value as 

opposed to adding to our carbon hazard. And I am looking forward 

to discussing the diesel standards which seem improbably low and 

I look forward to an explanation as to how EPA got there. 

So, thank you for holding the hearing. This is an area where I 

think technology is going to open up vast new markets and opportunities and we need to make sure we are setting the rules in a 

way that supports those emerging technologies. 

Thanks. 

Senator BOXER. Thank you very much, Senator. 

Senator Sessions, we are glad you joined us. 

OPENING STATEMENT OF HON. JEFF SESSIONS, 

U.S. SENATOR FROM THE STATE OF ALABAMA 

Senator SESSIONS. Good morning. 

I believe that we do need to evaluate where we are with ethanol. 

I have supported that in the past and was very confident about cellulosic research and development possibilities. Things like algae 

and other products of that kind I thought were going to be coming 

on line sooner than they have. In fact, we had some prospects in 

Alabama I was very excited about, talked to President Bush about. 

But they were not accurate, they did not produce and it is not 

workable. 

Those numbers, actually, from that process were utilized by energy, I guess, or EPA energy, to estimate what we could receive 

from cellulosic ethanol. Cellulosic has an advantage because it does 

not utilize the kind of crop land that corn-based ethanol does. AP 

has had a very thorough article within the last few weeks in which 

it raises fundamental questions about the environmental benefits 

of corn-based ethanol. 

You just have to look at that. You break up land. I know where 

I grew up in Alabama land that was in timber is now being returned to farmland because of prices and, I assume, ultimately 

driven by some of the ethanol requirements. 

So, I think it is time for us to review these regulations. I support 

backing off the higher numbers and I wonder really whether we 

can sustain the mandates that we have and maybe we should look 

to phase those out and the subsidies in the time to come. That 

might be the best thing environmentally, it might be the best thing 

economically. 

Madam Chairman, this is an important issue. Thank you for 

having the hearing and I look forward to really learning more because I do not pretend to know all the answers. 

Senator BOXER. Senator, thank you. That is a unique comment 

for a Senator to make. 

[Laugher.] 

Senator BOXER. It is very refreshing, to tell you the truth. 

We are going to now get started. We are going to end this panel 

at 10:15 a.m., so we will go as far as we can go with the questions. 

I hope colleagues will understand. If you do not get your question 
74 

answered, you will go first in asking a question to the next panel 

because we will have to stop at 11 a.m. 

So, we are going to get started with our panel No. 1, Mr. Chris 

Grundler, Director, Office of Transportation and Air Quality, 

United States EPA, and Mr. Steven Chalk, Deputy Assistant Secretary for Renewable Power, Office of Energy Efficiency and Renewable Energy, United States Department of Energy. 

So, welcome, Mr. Grundler. 

STATEMENT OF CHRISTOPHER GRUNDLER, DIRECTOR, OFFICE OF TRANSPORTATION AND AIR QUALITY, OFFICE OF 

AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION 

AGENCY 

Mr. GRUNDLER. Thank you very much, Chairman Boxer, Ranking 

Member Vitter and other members of the Committee. I appreciate 

the opportunity to testify today on the Renewable Fuel Standard 

Program. 

The RFS Program began in 2006, as has been mentioned, under 

the Energy Policy Act of 2005. The program’s requirements were 

then modified by the Energy Independence and Security Act of 

2007. EISA established new volume standards for renewable fuel, 

reaching a total of 36 billion gallons by 2022, including 21 billion 

gallons of advanced biofuels. 

The revised requirements also included a number of new provisions including greenhouse gas emissions thresholds. After an extensive notice and comment process, EPA finalized regulations to 

implement the EISA requirements. Those regulations went into effect in July 2010, and we have since been focused on implementing 

the program. 

EISA requires EPA to publish annual standards for four different 

categories of renewable fuels: total, advanced, biomass-based diesel 

and cellulosic. These standards apply to obligated parties which are 

typically refiners and fuel importers. 

On November 29 of this year, EPA published in the Federal Register a Notice of Proposed Rulemaking that would establish the annual RFS volume requirements for 2014. For reasons explained in 

detail in the notice, EPA is proposing to use authorities granted 

under the Clean Air Act to adjust the required total and advanced 

volumes for 2014 below the targets laid out in the statute. 

Our proposed rulemaking includes a detailed discussion of what 

is known as the ethanol blend wall. In the years between when 

Congress created the RFS Program and today, production and use 

of renewable fuels has grown rapidly. At the same time, however, 

fuel economy improvements and other factors have resulted in 

lower gasoline consumption than what was projected at that time. 

As a result, obligated parties are now facing the E10 blend wall 

where the country’s gasoline fuel pool is saturated with ethanol at 

the 10 percent level a few years earlier than initially projected. 

If gasoline demand continues to decline, as is currently forecasted, increasing the amount of ethanol used in the fuel pool will 

require greater use of gasoline blends with higher ethanol contents. 

Examples of such blends are E15 and E85. There are limitations 

in the market, however, to the increased use of these higher blends 
75 

including limits on fueling infrastructure and the number of vehicles that can operate on such fuel blends. 

In light of these factors, EPA is using authorities granted under 

the law to propose adjustments to the RFS statutory 2014 volume 

requirements. Our objective in doing so is to balance the broader 

goals of the program, including the long-term growth in renewable 

fuels, against these constraints that exist in the market and fuel 

system today. 

Our approach applies two different authorities in the law that 

permit EPA to reduce volumes of advanced biofuel and total renewable fuel below the statutory volumes. When the Administrator 

lowers the required volume of cellulosic biofuel below the target, 

EPA also has the authority to reduce the volumes of advanced 

biofuel and total fuel by the same or a lesser amount. The Administrator can also reduce the required volumes of renewable fuel 

under the general waiver authority under certain conditions, including if the Administrator makes a determination of inadequate 

domestic supply. 

Our 2014 proposal uses a combination of these two authorities to 

reduce volumes of both advanced biofuel and total renewable fuel. 

The proposed volumes for 2014 are as follows. For cellulosic biofuel, 

17 million gallons, biomass-based diesel, 1.28 billion, advanced 

biofuel, 2.2 billion gallons, and total renewable fuel, 15.21 billion 

gallons. 

The proposal also includes volume ranges for each biofuel category. Including these ranges reflects our recognition of the inherent uncertainty in developing projects for biofuel use as well as 

provide stakeholders the ability to comment and provide data on a 

range of volumes and any other factors that should inform these 

ranges. 

The 2014 proposal includes a lengthy discussion and analysis 

about the proposed adjustments to these categories and seeks public comment on several alternative approaches to setting the total 

and advanced fuel standards. We think that our proposed framework for determining appropriate volumes of total renewable fuel 

and advanced biofuel would simultaneously address the ethanol 

blend wall as well as the limitations in availability of qualifying renewable fuels. Our intent is that the approach would allow for 

long-term growth in renewable fuels while recognizing current constraints in the marketplace. 

The proposed rulemaking is now open for public comment. The 

comment period runs for 60 days from publication which ends January 28, 2014. 

Just last week we held a public hearing on the proposal where 

we heard testimony from over 130 stakeholders demonstrating the 

high amount of interest in this policy and the diversity of fuels. 

I see my time is up, so I am glad to be here and I look forward 

to your questions. 

[The prepared statement of Mr. Grundler follows:] 
76 
77 
78 
79 
80 
81 
82 
83 
84 
85 
86 
87 
88 
89 
90 
91 
92 
93 
94 
95 
96 
97 
98 
99 
100 
101 
102 
103 
104 
105 
106 

Senator BOXER. OK. And we will put the rest of your statement 

in the record. 

Mr. GRUNDLER. Thank you. 

Senator BOXER. Mr. Steven Chalk. 

STATEMENT OF STEVEN CHALK, DEPUTY ASSISTANT SECRETARY FOR RENEWABLE POWER, U.S. DEPARTMENT OF ENERGY 

Mr. CHALK. Thank you, Chairman Boxer, Ranking Member 

Vitter, Chairman Carper, Ranking Member Sessions and members 

of the Committee. Thank you for the opportunity to discuss the Department of Energy’s work on renewable fuels. 

As part of the President’s sustained all-of-the-above approach to 

American energy, the Department is working to develop a diversity 

of advanced fuel and vehicle technologies that can secure our energy future and provide consumers with greater choice with the 

goal of saving energy, reducing costs and addressing climate 

change. 

As Deputy Assistant Secretary in the Office of Energy Efficiency 

and Renewable Energy, I am responsible for overseeing DOE’s 

portfolio of renewable energy research, development, demonstration 

and deployment. The Department supports the goal of the Renewable Fuel Standard to increase biofuel production and use and is 

investing and research, development and demonstration to help 

bring next generation biofuels online. This an important component 

of the Department’s work to leverage partnership between the private and public sectors, to deploy cleaner fuels, including advanced 

batteries and fuel cell technologies, in every transportation mode. 

Today, I will address DOE’s Bioenergy Technologies Office’s role 

and progress in transforming our renewable biomass resources into 

commercially viable, high performance biofuels and bio-products. 

While the majority of the ethanol in the U.S. fuel market today 

is starch based, DOE is making important strides in the demonstration and early commercialization of non-food based cellulosic 

ethanol which can be used to displace gasoline for light duty vehicles. Over the past 10 years, breakthroughs in biomass 

pretreatment and enzymes have helped reduce the model costs of 

cellulosic ethanol from over $13 a gallon in 2001 to approximately 

$3.25 per gallon, and this is on a gasoline equivalent basis. 

This model costs reflects the current status of the technology and 

includes projected learnings and refinements that are validated 

through early commercialization-scale demonstrations. 

DOE and the bioenergy community are now leveraging the cellulosic ethanol research success to accelerate the cellulosic and 

algal drop-in biofuels that can be used to substitute for petroleumbased gasoline, diesel and jet fuel. Successful R&D investments in 

cellulosic ethanol have provided the foundational knowledge and 

capabilities at universities, national laboratories and industry to 

develop the more challenging bio-based hydrocarbon fuels. 

These drop-in hydrocarbon biofuels are advantageous because 

they are largely compatible with the existing infrastructure to deliver, blend and dispense the fuels. Also, drop-in fuels can be used 

in heavy duty vehicle applications, aviation, home heating oil and 
107 

other transportation modes to displace diesel and jet fuel in addition to gasoline. 

Through research and development demonstration, DOE seeks to 

contribute significantly to making cellulosic and algal-based dropin biofuels cost competitive with petroleum-based fuels. Our goal is 

to develop a sustainable pathway to achieve a model cost of $3 per 

gallon by 2017 and by 2022 validate multiple technology pathways 

which means various sustainable feedstocks and conversion processes. 

DOE’s biofuels demonstration and deployment activities focus on 

integrated bio-refineries. As of September of this year, we have 24 

active projects, 17 of which are either under construction or in operation. These competitively awarded projects are cost-shared by 

industry so that taxpayer investments are reduced. 

These first-of-a-kind projects at the pilot demonstration and pioneering commercial scales validate the key technical and economic 

performance parameters which inform our future R&D investments 

and provides information on the technologies’ commercial readiness. With the first pioneer-scale demonstration facility producing 

initial product in 2013, it is expected that additional commercialscale facilities will come online in 2014. 

DOE’s renewable fuels and transportation technologies portfolio 

benefits consumers, reduces greenhouse gases, reduces our dependence on oil and keeps America competitive and on the cutting edge 

of clean transportation energy technologies. 

Thank you for the opportunity to discuss these issues, and I welcome any questions. 

[The prepared statement of Mr. Chalk follows:] 
108 
109 
110 
111 
112 
113 
114 
115 
116 
117 
118 
119 
120 
121 
122 
123 
124 
125 
126 
127 

Senator BOXER. Thank you. In the interest of time, I am going 

to pass on my chance to question and turn to Senator Cardin. 

Senator CARDIN. Thank you very much, Madam Chairman. 

As I said in my opening statement, I am a strong supporter of 

the Renewable Fuel Standards. Mr. Grundler, I listened to your 

testimony very carefully. And I think you have made the strongest 

argument as to why Congress needs to act to reform the Renewable 

Fuel Standard Program. And let me explain and give you a chance 

to respond. 

You indicated the use of the waiver authority was used this year 

with the proposed change that is out there for comment in which, 

because of the blend wall, because of the problems of gas consumption in this country and production of fuels, that you need to reduce 

the overall limits because of the safe use of ethanol-based fuels, although I am somewhat puzzled as to why you also included reductions on the advanced fuels which are not part of the blend wall 

problem. You may want to explain that. 

But my main concern is why EPA did not act in 2012 when there 

was a request for waiver authority? When corn price hit $8 per 

bushel and it was clearly affecting our food security in this country. 

And yet, EPA did not exercise the waiver authority in 2012. You 

did it this year, and we understand why. I do not understand why 

you did it for the advanced fuels. 

But perhaps you could explain to the Committee why food security issues are not clear enough under the code and do we need to 

change the code in order to be able to give you the take action in 

regards to what happened in the food industries? 

Mr. GRUNDLER. Thank you, Senator. In 2012, when we received 

the waiver, requests for a waiver from a number of parties, the circumstances were different. We were suffering from a huge drought 

which had enormous consequences and damage for many parts of 

our economy and for our people. We worked very, very extensively 

with the Department of Agriculture and the Department of Energy 

and analyzed that situation very, very carefully, sought public comment, did a lot of analysis—— 

Senator CARDIN. But I am correct that it was 40 percent of the 

corn that year was used for fuels, 70 percent of the costs in the 

poultry industry is corn feedstock, I do not want to go through all 

of you analysis but it seems to me it is pretty clear at $8 per bushel 

that the demand for corn-based fuels was driving the costs of poultry to an uncompetitive level. 

Mr. GRUNDLER. The question before us in 2012, Senator, was 

whether or not the RFS was causing severe economic harm. 

Senator CARDIN. So, therefore, we need to change the statute if 

we want to protect food security in this country. 

Mr. GRUNDLER. Well, that is up to you, I am not here to comment on what Congress should do. 

Senator CARDIN. I understand it is up to us. But you do not have 

the authority to do that under the, as you have interpreted, under 

the current law? 

Mr. GRUNDLER. We have authority to change the standards 

under a number of conditions. The one condition in 2012 was 

whether or not the RFS was causing severe economic harm to a 
128 

State or the Nation or a region, and our conclusion was that it was 

not—— 

Senator CARDIN. And you based that basically on energy costs, 

not on food costs. 

Mr. GRUNDLER. Well, the first question we are trying to answer, 

Senator—— 

Senator CARDIN. Yes or no? I mean, I think it is a simple question. I mean, your analysis is based upon the energy sector, not 

upon the entire sector of this country. 

Mr. GRUNDLER. Our analysis was based on whether or not the 

RFS was, indeed, causing economic harm and we determined it was 

not because the oil industry was demanding ethanol, would have 

demanded ethanol with or without the RFS mandate under those 

circumstances. 

Senator CARDIN. I think you have answered the question. Your 

focus, and I understand that, you have interpreted the code to give 

you authority to deal with the blend wall issues and the energy 

issues. And we need to be concerned about the security of this 

country. 

Senator BOXER. Thank you, Senator. Senator Vitter. 

Senator VITTER. Thank you. Thank you all for testifying. Mr. 

Grundler, the EPA’s recent use of the waiver authority, I assume 

that means you all decided that hitting the blend wall was a real 

threat. Is that fair to say? 

Mr. GRUNDLER. We are recognizing that the blend wall has been 

reached. Correct. 

Senator VITTER. Correct. And would you agree that reaching the 

blend wall threatens a spike in gasoline prices? 

Mr. GRUNDLER. I do not know if I would agree with that statement. Reaching the blend wall clearly presents constraints to using 

more higher-ethanol quantities because of the infrastructure and 

other market limitations—— 

Senator VITTER. Because of that. You do not think reaching the 

blend wall is going to drive costs up? 

Mr. GRUNDLER. It is not clear what costs would be driven up. But 

the infrastructure clearly needs to adapt if we are going to use 

higher blend walls. And in the space of time between now and 

2014, we did not think that it would be feasible to use the amount 

of ethanol that the Congress required in 2014. 

Senator VITTER. And so, therefore, without a waiver, are prices 

not going to go up? 

Mr. GRUNDLER. We determined that it was simply not feasible 

for the system to absorb that much ethanol. It is not clear if the 

prices would go up or what choices the market would make—— 

Senator VITTER. Is your recent action based on the waiver authority a temporary or a permanent solution? 

Mr. GRUNDLER. We are exercising our waiver authority for 1 year 

as we set the 2014 standard. 

Senator VITTER. Would you expect that action this year to be a 

long-term solution? 

Mr. GRUNDLER. Well, what has been lost in a lot of the debate 

since we made our proposal, Senator, is the methodology that we 

are seeking input on, which provides a forward looking path to ad-
129 

dress both the realistic constraints that the current market conditions impose as well as providing the long-term growth over time. 

Senator VITTER. I do not know what that means, so let me reask the question. I am simple, I guess. Would you expect the action 

you took this year to be a permanent solution not requiring subsequent actions in subsequent years, whether legislative or administrative? 

Mr. GRUNDLER. Sir, the law requires us to establish volume requirements each year. So, in 2015, based on the methodology we 

are proposing, we would be proposing the volume standards for 

2015. And our methodology would take into account what is the 

reasonable amount of ethanol that can be used in this country in 

2015. We will make that determination as we propose the 2015 

standards. 

Senator VITTER. OK. Is there not a very strong possibility that 

your actions, once finalized, will be litigated? 

Mr. GRUNDLER. Well, I would hate to speculate, but certainly 

there are, people have been suggesting that. 

Senator VITTER. OK. If that happens, that would certainly perpetuate or increase uncertainty, is that fair to say? 

Mr. GRUNDLER. Yes. 

Senator VITTER. OK. A final question. On the cellulosic biofuel 

side, what was produced and available for compliance under the 

RFS in 2010, 2011, 2012 and so far in 2013? 

Mr. VITTER. So far in 2013 we expect that the biomass-based diesel production will reach between 1.6 billion and 1.7 billion gallons. 

Last year, I think it was closer to the standard level, 1.28—— 

Senator VITTER. We are talking about cellulosic biofuel? 

Mr. GRUNDLER. I am sorry, I thought you said biomass-based diesel. Cellulosic biofuel, our proposal is for 17 million to be produced, 

that it what our estimate is for 2014. For 2013 the standard is 6 

million gallons and I do not—— 

Senator VITTER. So, is your current estimate that that can be 

produced? 

Mr. GRUNDLER. In 2013? 

Senator VITTER. Yes. 

Mr. GRUNDLER. Yes. 

Senator VITTER. And just a final thought. Compared to that, 

what was the statutory mandate for 2013? 

Mr. GRUNDLER. For 2013, it is 2.75 billion for advanced, for cellulosic it is what? 2.75 billion, sir. 

Senator VITTER. For cellulosic I think it is 1 billion. Does that 

sound right? 

Mr. GRUNDLER. I am sorry, which, for 2013? 

Senator VITTER. Cellulosic biofuel for 2013. 

Mr. GRUNDLER. For 2013, 1 billion, yes. 

Senator BOXER. Thank you, Senator. We have to move. 

Senator VITTER. Pretty significant gulf—— 

Senator BOXER. We have to move on, Senator. Senator Merkley. 

Senator MERKLEY. Thank you, Madam Chair. And I wanted to 

continue the conversation on cellulosic. I have the EPA’s Federal 

Register analysis and it shows that there are five groups that are 

coming online with commercial cellulosic ethanol in 2013, 2014. 

But the estimates read, for the first plant, 0 through 18 estimate, 
130 

second plant, 0 through 2, the third, 2 through 5, then 0 through 

9, 0 through 6. In other words, they are coming online but the estimates are still 0 through something. 

Why is there so much uncertainty over what the plants, especially since at least one of them came on in 2013, two of them did 

actually, why is there so much uncertainty that they might actually produce no cellulosic ethanol? 

Mr. GRUNDLER. Well, sir, this is a new business. This is new 

technology. And as my colleague mentioned, there has been an 

enormous amount of research and development. But going from a 

laboratory to a pilot scale to commercial scale is challenging, and 

it is difficult and there are startup problems. And that is why we 

see such a broad range of values in our estimates. 

Senator MERKLEY. So, even for the plants that got online in 

2013, it is still very uncertain whether they can reach their commercial design potential in 2014. OK. That is helpful. You are just 

kind of dropping the goal into the middle. In other words you estimate currently that the companies with approved pathways can 

produce 8 to 30, and so you are saying well, somewhere in the middle is 17 so we will toss it in there. Well, where does the 17 come 

from? 

Mr. GRUNDLER. Sir, it is a little more sophisticated than that, I 

am pleased to say. We actually do what is known as a Monte Carlos Analysis where we try to look at the probabilities and select a 

mean based on what the most likely scenario is. 

Senator MERKLEY. So, let us compare that, say, to what was actually produced in 2013. Do you have a sense of how many million 

gallons actually were produced commercially? 

Mr. GRUNDLER. Well, we are still counting, sir. Our standard is 

6 million. I do not know if we have an estimate. We do not have 

a final number now. It is in the hundreds of thousands of gallons 

that have been produced so far. 

Senator MERKLEY. So, the 17 still represents a considerable draw 

forward in terms of encouraging the market. The reason I am raising this question is you have all of these plants and their potential 

production for next year is significantly above 17, and you have investors who have based their investments on the understanding 

that if the fuel is produced, they will be a purchaser. And so I am 

wanting to make sure that we are not aiming for a mark here that 

essentially leaves this whole effort stranded. 

Mr. GRUNDLER. I understand the question, sir, but under the 

law, and we have got recent guidance from the courts, that we have 

to base our projections on a neutral estimate of what can actually 

be produced in the future year and we are being fairly conservative. 

Senator MERKLEY. I want to turn to, in the 50 seconds left, to 

questions about corn ethanol when it is produced on new agriculture land that essentially is being plowed because of the production of corn. When you look at the life cycle analysis of the impact 

of additional acreage, the fertilizers, the tractors and the carbon released from the disturbance to the ground, is there actually a CO2

advantage to producing that extra acre of corn? 

Mr. GRUNDLER. Sir, that is a very complicated question. It really 

depends on how the corn is being produced, how the ethanol is 
131 

being processed, and we see a wide range of efficiencies in corn ethanol production today. To be counted as renewable biomass, it has 

to come from land that has been previously cultivated. So, the Congress established essentially two different bins, if you will, of 

biofuel and most of today’s corn production was grandfathered and 

does not need to meet the greenhouse gas thresholds of 20 percent. 

But when we set the standard—— 

Senator MERKLEY. My time is up. So, I’m going to stop you right 

there and I will look forward to continuing the conversation. Thank 

you. 

Mr. GRUNDLER. Thank you. 

Senator BOXER. Thank you, Senator. Senator Fischer. 

Senator FISCHER. Thank you, Madam Chair. 

At this time, I would like to ask if I could have included in the 

record a letter from the Renewable Fuels Association. 

Senator BOXER. Without objection. 

[The referenced information follows:] 
132 
133 
134 
135 
136 
137 

Senator FISCHER. Thank you very much. 

Mr. Grundler, the EPA’s proposed rule establishing the RVOs for 

2014. Your analysis supporting this proposal includes consideration 

of the availability of infrastructure in setting the volumes and it 

indicates that you plan to use this same approach in your 

rulemakings for the next several years. Is that correct? 

Mr. GRUNDLER. Yes, Madam. 

Senator FISCHER. OK. Given that infrastructure and investments 

are motivated by anticipation of more fuel entering the marketplace, not less fuel, how do you believe that your proposal is going 

to incentivize the installation of the infrastructure necessary to 

allow for the deployment of higher blends? 

Mr. GRUNDLER. In a number of ways. And, of course, the Renewable Fuel Standard is more than just about one kind of fuel. It certainly is about corn-based ethanol but the priority that the Congress set is for most of the growth in the future it is about these 

advanced biofuels that we have been talking about. And with respect to, for example, ethanol from these advanced sources like cellulosic, they get their own standard which is essentially walled off 

by the law. 

So, our cellulosic standard going into the future will be based on 

our estimate of what can actually be produced in that next year. 

And as my colleague from DOE described, there has been an enormous amount of progress in terms of the technology and its efficiency and its ability to produce these higher volumes. 

As for the market conditions that would incentivize more infrastructure, we are seeing that today and in fact, our proposal does 

imagine a volume that is above the blend wall. We are anticipating 

more E85 being sold next year than is being sold this year. And 

our estimates are based on that trend line and that pace of new 

E85 stations being built. 

Now, of course, we provide a range and we are asking for more 

information and data on whether or not we got that right or if we 

are being too conservative. I can tell you, having sat through 13 

hours of public testimony last week, that we got a very wide diversity of views and many people thought we got it wrong and that 

we had adjusted it too far. Others told us we did not adjust it 

enough. And a few people said we got it about right. 

So, what we emphasize at the hearing is please give us updated 

information on sales, on infrastructure, on our assumptions so that 

we can make the best decision we can with that information before 

we go final. 

Senator FISCHER. Earlier in your comments to Senator Cardin 

you said that the oil industry has a demand for ethanol. Could you 

continue then and say that there is an economic value of ethanol 

for the oil industry? 

Mr. GRUNDLER. Oh, without a doubt. The whole petroleum industry infrastructure has optimized around this 10 percent blend. It 

does have a value in terms of enhancing the octane of the gasoline 

as well as a volume extender up to a point. 

Senator FISCHER. You also mentioned that, when you talked 

about the blend wall, that reaching that blend wall does not necessarily drive up gas prices. Did I hear you correctly on that? 
138 

Mr. GRUNDLER. What I said, what I meant to say, certainly, is 

that is a very complicated equation. And so, it is not clear to me 

exactly what the impact would be and what the incremental marginal costs are for going above that blend wall. That is what we are 

trying to do in this proposal. We are trying to estimate what is the 

reasonable amount of higher-blend ethanols that today’s market 

and infrastructure can in fact—— 

Senator FISCHER. And you would say, my time is up, but you 

would say that gas prices fluctuate on a number of inputs, and I 

guess I would say ethanol would be a very small part of that. 

Would you agree with that? 

Mr. GRUNDLER. I would agree predicting gasoline prices is 

treacherous, and we try to avoid it. 

Senator FISCHER. Thank you so much. And thank you, Madam 

Chair. 

Senator BOXER. Senator Whitehouse. 

Senator WHITEHOUSE. Thank you, Madam Chair. I just have one 

question, and that is where you got your biomass-based diesel requirement? If you look at cellulosic biofuel, I have U.S. commercial 

production for that in 2012 as just over 20,000 gallons as compared 

to the Energy Independence and Security Act estimate that it 

would be 500 million gallons. Well, 20,000 is a long way from 500 

million, and you all have adjusted your volume requirement for cellulosic biofuels as a result. 

So, then you switch over to biodiesel, and my information is that 

the biodiesel industry has produced over 1.7 billion gallons just this 

year. And EPA proposes to set the 2014 biomass-based diesel at 

1.28 billion gallons, which is a, the same as the 2013 requirement, 

no change, and b, less than what I understand is already being produced by the industry. 

What is the logic to that? Why did you not make an adjustment 

reflecting the industry output for biodiesel the way you did for cellulosic? 

Mr. GRUNDLER. Thank you, Senator. That is a very good question. 

Senator WHITEHOUSE. Well, it is a pointed question because it 

will hurt businesses that are out actually doing this if you do not 

have this right. 

Mr. GRUNDLER. The requirements under the law for setting the 

cellulosic standard and for setting the biomass-based diesel standard are different. That is the short answer. 

You are right that we are keeping the standard the same. The 

law does not require us to increase the biomass-based diesel standard from year to year. I would note that this year the standard was 

1.28 and the industry over-achieved for a number of reasons relating to the market and to tax policy. So, projecting into next year, 

there are a number of uncertainties as to what those market conditions will be. 

But we look at the 1.28 standard as a floor. And when we constructed our advanced standard, which the biomass-based diesel 

standard is a part of, we did consider this broader range up to 1.6 

billion. And we made a policy choice that biomass-based diesel can 

compete within that advanced standard for that additional volume, 

just as they did very effectively this year. 
139 

Senator WHITEHOUSE. All I can tell you is that for the folks in 

the industry who I talk to, they do not see it as a floor, they see 

it as a target and as a number kind of around which the industry 

does not actually coalesce but it has an impulse in that direction 

anyway. And when you set it below existing levels, it seems to 

them that you are sending a message saying that what you are 

doing out there, despite all of the value of this biodiesel, is not 

worthwhile and we want less of it, we want to get back to a target 

of 1.28 billion. 

So, you need to make it a lot clearer your notion that this is a 

floor because I have never heard anybody express that until this 

moment. 

Mr. GRUNDLER. Thank you. And I heard directly from your constituent at the public hearing, one of the Rhode Island biodiesel 

producers, and heard that perspective. And we are specifically asking for comment on this question and did we consider the factors 

right and should we consider a higher standard specifically for biomass-based diesel and we are going to be looking forward to that 

information. 

Senator WHITEHOUSE. And if the biodiesel tax credit expires at 

the end of the year, if we cannot fix the tax extender problem 

which we have frequently failed at doing, this would then be the 

only market incentive remaining for that industry. Correct? 

Mr. GRUNDLER. I would not say it is the only market incentive 

because there is this RIN market which provides a value to biomass-based diesel. But our standard is based on the assumption 

that the tax credit is expiring. 

Senator BOXER. Thank you, Senator. Senator Inhofe. 

Senator INHOFE. Thank you, Madam Chairman. Luke, put up 

that blue chart, will you? I think Senator Whitehouse, Senator 

Cardin and Senator Fischer, all of them are asking kind of the 

same thing and I hesitate to get into that, but I think it is something that really is not understood. Now, if you were talking about 

something that we had a mandate that was five times or two times 

or even ten times what the standard would finally be, that would 

be of more understanding to me. 

This chart though, this chart shows that the blue, I say to my 

friend Senator Sessions, is that is the requirement spaced out over 

the years, all the way to 2022. And yet the anticipated projection 

of the availability of cellulosic is that red line that you can hardly 

see down there. 

And you know, I just wonder, what would be wrong with putting 

in legislation that had something that kind of referred to the total 

mandated amount cannot exceed say 2 to 1 over the previous year 

or something like that. What is your thinking on that? I mean, we 

are so far off here. I have a hard time explaining to people back 

home why I sit on this Committee, and at one time chaired this 

Committee, and we still have that disparity between mandates and 

availability. 

Mr. GRUNDLER. Well, I think Congress anticipated this possibility which is why it gave the Administrator the ability to waive 

the standard in circumstances—— 

Senator INHOFE. Yes, but that far off? Now I could understand 

that, you know, being off 2 to 1 or 3 to 1, but to me they are pass-
140 

ing something that does just the opposite. It allows the EPA to 

make a determination with no limit because the limit right there, 

look, you can see by the blue line, that is the reasoning, you give 

them the flexibility. 

Mr. GRUNDLER. My eyes are getting old but I think what you are 

describing as the limit are the statutory targets that were written 

into the law. 

Senator INHOFE. Yes, there we go. And that law should be repealed, I believe. Do you think it should be repealed? 

Mr. GRUNDLER. I do not have an opinion on that, sir, as you well 

know. 

Senator INHOFE. Let me mention one thing because you brought 

up the RINs, and that is kind of interesting because we went 

through this for 12 years now on cap and trade, and that is essentially what we are talking here, because you are allowing a system 

in place that would make up for the disparity. At least, this is what 

I see. And when I say that, I think it is interesting because that 

has been rejected for 12 years and there probably is not a third of 

the votes that would be supporting it. Just a concept. 

Do you see that there is any relationship between that program 

and the RIN Program, how that is working? The RIN started out 

at what? One or two cents? And they have gone up at high as 

$1.20. What do you think industry is thinking out there not knowing what that price is going to be with a disparity like that? Does 

that concern you? 

Mr. GRUNDLER. Well, I think most observers in this space anticipated a rise in the prices as this so-called blend wall was approaching and that is, indeed, what happened. They have fallen substantially since then. I do not see the connection that you are making 

though between the RIN market and cap and trade. 

The RINs were developed, by the way, in collaboration with the 

industry as a flexibility tool and as a means to measure compliance, and I think they have worked pretty effectively at doing that. 

The alternative would have been to force every refiner to blend 

every gallon of gasoline they produce with ethanol. This flexibility 

allows people to make choices in terms of how they reach the compliance. 

Senator INHOFE. Well, I think it is, and maybe it helps to make 

choices, but when you have a variable as we have in the RIN 

prices, I think that makes it more difficult for industry. Just a 

thought. 

You know, Mr. Grundler, I am not blaming you for this. It is 

something you kind of inherited and it is something you are dealing with and it is not easy. So, I have sympathy for you. But I 

think on this side of the table we should be looking at legislation 

so that we do not have the problems that Democrats and Republicans are all united in being concerned with. 

Thank you, Madam Chairman. 

Senator BOXER. So, I am going to now turn to Senator Udall. 

Senator UDALL. Thank you, Madam Chair. And Mr. Grundler, 

thank you for your work at EPA. 

Can you tell me more about EPA’s ability to meet the statutory 

deadline for finalizing RFS volume requirements each year by the 

end of November? EPA missed the deadline for 2013 by over 9 
141 

months, the agency is only now proposing requirements for 2014, 

again missing the deadline. 

And regardless of which side of the many sides to the RFS debate someone is on, it seems like something we can all agree on 

is that EPA needs to reliably perform its role to enable this policy. 

Uncertainty is a significant challenge to the outcome. What assurances can EPA give this Committee that they will finalize the volumes on time in the future? 

Mr. GRUNDLER. Do I get credit for proposing the 2015 standard 

ahead of time? 

[Laughter.] 

Senator UDALL. Well, if you do it on time that would be nice, yes. 

Mr. GRUNDLER. Well, we have proposed the 2015 standard last 

month for biomass-based diesel, Senator. 

I am not proud of our record here. I would like to be faster. The 

truth is that this has been a very challenging policy issue with a 

lot of diverse points of view as I heard last week and as we have 

heard today. This renewable fuels policy intersects with a lot of different parts of the Government, a lot of different kinds of policy beyond environmental policy, and that has made it challenging. 

I am hopeful, and our goal is certainly to finalize these 2014 and 

2015 standards by this spring and hopefully get back on track. Our 

whole intention here with this proposal is to put the RFS on a 

more manageable trajectory that provides for both growth over 

time of these fuels as well as recognizing the pace at which the 

market can respond to use them. And if we get it right, then perhaps the temperature will drop and people can unite behind our 

approach that we are laying out. 

Senator UDALL. Great. Thank you for that commitment. 

Mr. Chalk, thank you for your work at DOE. 

In your remarks today, you mentioned that one of DOE’s R&D 

goals was for cellulosic drop-in fuels. Can you tell me if there are 

other similar targets for algae drop-in and advanced biofuels which 

DOE is pursuing in fiscal year 2014, what challenges do algae R&D 

focus on, and what can innovators working in New Mexico, how can 

they partner with DOE to continue to work on these critical challenges in the future? 

Mr. CHALK. Thank you for that question, Senator. We are looking 

at cellulosic and advanced biofuels as well as algae. So, we are 

really neutral on the feedstock. All the feedstocks are non-food 

sources. So, we would include algae toward that goal if it can 

achieve that. 

We view that as a little longer-term pathway, but certainly we 

have three pilot demonstrations right now that are making very, 

very good progress toward that goal. So, we see the algae pathway 

as very important to achieving drop-in fuels which really get 

around this blend wall issue that we have because they are totally 

compatible with the infrastructure today. 

Senator UDALL. Great. I yield back, Madam Chair. 

[The prepared statement of Senator Udall follows:] 

STATEMENT OF HON. TOM UDALL, 

U.S. SENATOR FROM THE STATE OF NEW MEXICO

Good morning. Welcome, Mr. Grundler and Mr. Chalk, and our other distinguished guests serving on our second panel. 
142 

Thank you for being here today. And Senators Boxer and Vitter, I want to thank 

you for holding this hearing on renewable fuels. 

This is an important discussion. I have long said we need a ‘‘do it all, do it right’’ 

energy policy. Taking control of our energy security. Producing more energy here at 

home. And using a diverse portfolio of sources. 

How we manage to do this will have a huge impact. To our planet. To our security. And to our economy. 

The threat of global warming is real. That is not conjecture. That is science. The 

reality is we have to transition to a clean energy economy. This is a commitment 

we owe future generations. And it is a commitment that will not wait. 

So, we have to make that transition. And our goals are clear. To meet our energy 

needs. To reduce the impact of energy production on the environment. And to drastically cut the pollution of our air and water. 

Renewable fuels play an important role. For increased domestic energy production. For a sustainable energy mix. Moving our country and our economy forward 

in the future. 

Overall we are making progress. Market share of renewable fuels has increased. 

We’ve seen many success stories. Applying American innovation to meet our energy 

challenges. 

In my State of New Mexico, there are multiple examples of how innovation is successfully implementing solutions. 

Sapphire Energy is one example. Using algae feedstocks for green crude oil that 

flows with conventional crude oil all the way to the refinery for processing. 

Another company, Joule Unlimited, produces fuels directly and continuously from 

sunlight and waste CO2 in a novel, gas-to-liquid conversion process. 

And in both cases the end product is indistinguishable from conventional fuel. 

Our State also leads in biofuels research and development. Just last week I saw 

firsthand how important the R&D efforts of Los Alamos National Lab, the New 

Mexico Consortium, and each of their university partners, including UNM, NMSU, 

and NM Tech, are for the future of this industry. 

I am concerned that the proposed changes to the RFS could jeopardize near and 

long term growth in advanced biofuels, preventing innovative technologies in New 

Mexico from entering the pipeline for future production. 

We need the RFS to enable all these innovative fuel sources to develop side by 

side with conventional fuel. 

There are some areas where we can do better. First, the EPA rulemaking process 

needs to perform more reliably. When it does not, innovation is stifled. Business opportunities fall through. Investments fail. There is too much uncertainty. We need 

to change that. 

Second, we need to be more feedstock neutral. It shouldn’t matter whether the 

source is corn or algae. What matters is the final product. That fuels our economy. 

And that creates jobs. 

The RFS should do more. To push innovation and technology in the market. With 

advanced biofuels that are indistinguishable from conventional ones. 

In 2011, I introduced a bipartisan bill to level the playing field for advanced 

biofuels and to make the RFS more technology neutral. 

The current RFS includes a traditional ethanol standard of up to 15 billion gallons by 2015. That comes mostly from corn feedstock. Which is linked to the price 

of cattle feed. 

I am concerned that this drives up prices for dairy producers in New Mexico, who 

for years have been struggling to break even because of inflated feed cost. 

And beef producers who have seen their herd size cut in half from several years 

of drought, limited forage, and rising feed costs. 

To address this issue, we can rely more on advanced biofuels. 

The large majority of the advanced biofuel standard is limited to only cellulosic 

biofuels. The playing field remains uneven. Other biofuels like algae remain at a 

disadvantage. 

We should change that. And we can, by removing the cellulosic biofuel carve-out 

and creating a technology neutral category. One that would include all advanced 

biofuels. Cellulosic. Algae. And other technologies, all at the same 21 billion gallon 

standard by 2022. 

That RFS will reward innovation, provide opportunity for growth, and help us develop the diverse sources of energy that we need for the future. 

I am looking forward to hearing more from today’s panels. 

Senator BOXER. Thank you very much. Senator Sessions followed 

by Senator Boozman, and then we are going to move right to the 

second panel. 
143 

Senator SESSIONS. Well, to follow up on Senator Inhofe’s question, I supported the law that we would have cellulosic mandates, 

and we thought we would have some things happening that were 

going to develop that would give us a realistic opportunity to meet 

those goals. But that law required that there be 16 billion gallons 

by 2022. And as the chart showed, EIA, your own Department of 

Energy Information Agency, says we are only going to have now, 

they are projecting, half a billion gallons by 2022. 

So, that represents a reality that we are going to have to deal 

with and you have indicated, and I have looked at algae projects 

and seen some up close, but that is a long way off. We are not 

going to fill this gap with algae by 2023 are we, Mr. Chalk? 

Mr. CHALK. Thank you for the question, Senator. I would like to 

first start with what the status of cellulosic ethanol is. As I said 

in my testimony, we brought the cost down by a factor of four. The 

research and development is completed on that. 

Senator SESSIONS. Well, let us ask—Range Fuels in Georgia, is 

it still operating? 

Mr. CHALK. No, it is not. 

Senator SESSIONS. It is closed. It was supposed to be the brightest prospect for a long time, was it not? 

Mr. CHALK. Yes, Senator. 

Senator SESSIONS. And then there was one in Alabama that was 

sued for fraud. And now you have got KiOR in Mississippi that has 

some potential, I think. Is that correct? 

Mr. CHALK. We see a lot of potential. 

Senator SESSIONS. Do you see anything better than, say, the 

KiOR technology out there that is going to have a potential to fill 

this gap? 

Mr. CHALK. Yes. There are five bio-refineries currently in the 

early stages of commercialization. We see great promise for the industry to expand. As Senator Boxer said in her testimony, when we 

started these efforts in the 2007 and 2008 timeframe, private investment was very hard to come by. So, a lot of these plants were 

delayed until that private cost share could be secured. And now we 

are in really early commercialization phases for cellulosic ethanol 

and we expect a very fast ramp up. 

Senator SESSIONS. Now, Madam Chair, for example, you harvest 

timber in Alabama and, I think, in most places, you have 10, 20 

percent of the tops that are waste products that a farmer would be 

glad to have taken away. He would not have to be paid for it because it impacts his ability to replant and start over again. But 

that is limited, too. 

I guess what I am saying is I guess we probably overreached. 

Can you give us, can you give us realistically a specific kind of cellulosic productivity that can be achieved? And I will end with this. 

I think we would be smarter to help assist the technology development than to issue mandates before we have technology capable of 

meeting the mandates. 

So, we mandated cellulosic that we had no proven technology 

from and that has caused, really, an embarrassment to us all. So, 

give us your prospects of what might happen with cellulosic because it would be great if we could do that, it does not require 
144 

breaking up new land and farming in the way that might otherwise 

be the case. 

Mr. CHALK. The department commissioned what we call the Billion Ton Study so, if you include all the agricultural residue and 

wood waste and other sources, we could potentially replace about 

one-third of our transportation energy. And we are committed to 

the RFS and this process, and the checks and balances that Congress provided in the law and the process that EPA is going 

through right now where they are looking at what is the capacity 

of the industry to provide these fuels is very good. We think it is 

going to result in a final rule that will maintain the strength and 

the promise of the RFS. 

We think the long-term predictability of the RFS is critical to 

maintain this investment. 

Senator BOXER. I am going to have to stop you right there even 

though you are making a really good point. We have to move on. 

Senator BOOZMAN. Thank you, Madam Chair. And I know that 

we do need to go to the next panel. 

Mr. Grundler, again, is it my understanding that your testimony 

is that if we hit the blend wall substantially that the price of diesel 

would not go up significantly? 

Mr. GRUNDLER. I did not make that statement. I do not have an 

estimate for you. But the truth is that we have hit the ethanol 

blend wall. 

Senator BOOZMAN. But most people feel like that would be the 

case. That is a fair statement, is it not? 

Mr. GRUNDLER. No, I cannot confirm that statement. There are 

a lot of economists that are looking into that. 

Senator BOOZMAN. I guess it is important that you would figure 

that out. 

Mr. GRUNDLER. OK. 

Senator BOOZMAN. In the sense, you know, that that really is a 

huge issue. 

Mr. GRUNDLER. Could I respond? If I could just respond? What 

we have done in our proposal is we are, actually the blend wall has 

been reached, we are making an estimate of what is a reasonable 

amount of ethanol that can be consumed by the current system as 

well as what advanced biofuels can be produced in providing that 

estimate. So, I think the methodology that we proposed and the 

comments that we are seeking does address this concern that some 

have laid out with respect to the economic impacts of this blend 

wall. 

Senator BOOZMAN. No, and again, do not misunderstand. I agree 

with what you are doing. I think that is good. Let me ask you 

about the RINs in the sense that there is being fraud associated 

with that and things. 

Mr. GRUNDLER. Yes, sir. 

Senator BOOZMAN. This is a different thing than EPA, it is a different situation than they normally deal with. Can you comment 

about that, about the fact that there has been some fraud, what the 

agency is doing to prevent that in the future? I know you are in 

the process of a rulemaking that has not been complete. Maybe you 

can comment real quickly on when that will get completed. 
145 

Mr. GRUNDLER. Yes, that rulemaking has been proposed. We got 

an, again, an enormous amount of comment on our proposal which 

establishes a voluntary quality assurance approach so that people 

have confidence in the RIN market and it creates the kind of liquidity that we need. 

The rulemaking will be finalized early next year and we believe 

that already, because the way we wrote the proposal, allowed for 

some of this quality assurance to happen during this transition period and that we are very pleased to see that one of the concerns 

was that small producers would be going out of business. That has 

not happened. The number of producers is about the same. People 

are taking advantage of these quality assurance vendors. And liquidity in the marketplace has been restored. 

Senator BOOZMAN. Thank you. I have got to leave. I do want to 

recognize General Clark for being here as a fellow Arkansan. We 

are very, very proud of him for his service to his country in a number of different ways. 

Thank you, Madam Chair. 

Senator BOXER. Thank you very much. 

So, we are good. I passed on my questions so I am going to make 

three statements. If you disagree with me, I want you to say so. 

And then we will close out. 

One, oil companies need ethanol. Two, some oil companies even 

produce ethanol. And three, if Congress were to set a limit every 

year on how much alternative fuels we would need, I believe that 

would be a disincentive to the development of these alternative energies. Do either of you disagree with anything I said? That is 

great. Oh, you had a momentary thought there. 

I really do appreciate this very, very much. I know we rushed 

you through and I appreciate the cooperation of colleagues. 

This panel is excused and we will move on to the second panel. 

Please make sure that you, please go as fast as possible. 

And new panel, come up. And if you could make sure that your 

statements do not exceed 4 minutes we will get started in a moment. Thank you very much, gentlemen. We are rushing. We want 

to end this when the memorial service begins out of respect. 

So, we are going to start off the second panel with General Wesley Clark, Co-Chairman, Board of Directors of Growth Energy. And 

we are going to move down. I am going to ask each of you, 4 minutes please to make up for a little lost time. 

General, we are very honored to have you here today. 

STATEMENT OF GENERAL WESLEY K. CLARK (RETIRED), COCHAIRMAN, GROWTH ENERGY 

General CLARK. Thank you very much Chairman Boxer, Ranking 

Member Vitter and other distinguished members of the Environment and Public Works Committee. Thanks for the opportunity to 

be with you today. 

So, I want to start by just saying that I believe, first of all, I am 

in, as Senator Inhofe mentioned, I am in the energy business. So, 

I am in oil, I am in gas, wind, solar and biofuels. I have looked at 

the whole thing. I am in the financing side of it on numerous 

boards of directors. And my real interest is American national security and the prosperity of Americans. 
146 

So, I want to try to take the broadest picture in the couple of 

minutes I have got here. I think the Renewable Fuel Standard is 

a success. It has reduced our dependence on foreign oil, it has created 400,000 American jobs, revitalized the rural economy, puts 

$42 billion a year into it, lowered the price of gasoline at the pump 

and improved the environment. It is a success. 

Corn-based ethanol is the first step in bringing renewable fuels. 

You have got to build a distribution system and you have got to 

have the opportunity to put it into the automobile and the manufacturers have to accept it. 

So, we have hit the blend wall right now. The blend wall is actually an artificial creation. We can go through the blend wall anytime we put E15 and E85 in. E15 was extensively tested, 80 vehicles, 150,000 miles, works fine, 2001 on, and all the brand new 

automobiles have the warranties for E15. 

Seventeen percent of the corn crop is actually used in fuel. Cornbased ethanol is a factor in reducing the volatility of corn prices. 

As everybody on this Committee understands, I am sure, the $8 

per bushel price for corn last summer was primarily a function of 

drought and projections of reduced harvest. It was not a function 

of ethanol demand. 

Right now, corn prices are under $4.50 a bushel and anybody in 

the livestock or poultry business has to be happy with that because 

that is right at the cost for what it is for a farmer to grow it. The 

biggest factor in grain prices is actually the cost of fuel. So, that 

is what is really affecting us here. 

As far as the poultry industry is concerned, I am sorry Senator 

Boozman is not here, but our company, Tyson in Arkansas, has had 

record profits last year despite $8 per bushel corn prices. 

So, I think that we have got to see here, the big picture is we 

are moving off dependence on foreign oil. I think we should produce 

as much domestic oil as we can. But we need this biofuel. We are 

saving, as Senator Fischer said, about $40 billion a year in the 

American economy right now. We will go over $100 billion of savings into our economy when we enact and get fully up there with 

renewable fuels. It is where we need to be. 

I am sorry about the EPA proposal. I think it hurts investments 

when Congress or EPA tinkers with these expectations. The cellulosic industry had a tough time dealing with the financial crisis 

of 2008. It chilled investment, and congressional tinkering with 

mandates and things like this further scares investors off. 

We have the technology now. One of the companies that I am associated with, POET, their plant is coming on board in 

Emmetsburg, Iowa, late this spring. We will be producing 25 million gallons per year of cellulosic. It is combined with a corn ethanol plant. It can be licensed, that technology, and it will spread 

rapidly throughout the Midwest provided that we make space in 

the market to sell ethanol. And that is really the issue here. 

We need the help from the U.S. Congress to have the oil industry 

cooperate with us. We are all on the same team here trying to help 

promote American prosperity and energy independence. Let’s get 

that fuel into the marketplace. 

Thank you. 

[The prepared statement of General Clark follows:] 
147 
148 
149 
150 
151 
152 
153 
154 
155 
156 
157 
158 
159 
160 
161 
162 
163 
164 
165 
166 
167 
168 
169 
170 
171 
172 
173 

Senator BOXER. Thank you, General. 

Mr. Jim Collins, Jr., Senior Vice President, Industrial Biosciences, Performance Polymers and Packaging and Industrial 

Polymers, DuPont. 

STATEMENT OF JAMES C. COLLINS, JR., SENIOR VICE PRESIDENT, DuPONT POLYMERS AND INDUSTRIAL BIOSCIENCES, 

E.I. DuPONT de NEMOURS AND COMPANY, INC. 

Mr. COLLINS. Good morning, Chairman Boxer, Ranking Member 

Vitter and members of the Committee. I am pleased to be here 

with you today, and I will cover the significant investment that DuPont has made in biofuels and how we have contributed to the Nation’s energy security, reducing greenhouse gas emissions and 

strengthening our rural economies. 

Now, this technology does represent a tremendous shift in how 

we can energize our Nation as well as our planet. It is real, it is 

happening today and it is due to the Renewable Fuel Standard, a 

critical policy that must endure. 

DuPont’s commitment stretches across the country, from our laboratories in California to the cornfields of Iowa to our headquarters 

in Delaware. DuPont has invested hundreds of millions of dollars 

in scientific research. Through our seed business, we have optimized corn production, delivering more corn on the same amount 

of acres. 

We have enzyme technology and work every day to improve the 

efficiency of existing ethanol facilities. And then we also produce 

enzymes that further improve the digestibility of feed products, or 

DDGs, that come from corn ethanol production. 

So, all of these advances combined mean we are able today to 

produce increasingly more food, more feed and more fuel off of 

every acre. 

But that is only half the story. With more corn comes more corn 

residue, the leaves and stalks and cobs that are left over after harvest. DuPont and others are building supply chains to harvest this 

residue and commercialize biofuels from this plentiful source of cellulose at scale. 

Now today I can report that we are in the process of building a 

30 million gallon facility in Central Iowa and we are on track to 

begin production next year. Upon completion, this plant alone will 

employ 70 full-time folks, it will pay over 500 local farmers for 

their biomass annually, and employ another 150 seasonal workers 

to collect, transport and help store this feedstock. And we will do 

this while remaining greenhouse gas neutral. Or, in other words, 

our supply chain meets a standard that other industries could 

never dream of achieving. It is fully sustainable and has a net zero 

CO2 emission. 

In addition to cellulosic, DuPont is also producing another advanced renewable fuel with our partner, BP, in a 50/50 joint venture we call Butamax. Now, this joint venture has extensively tested biobutanol. It is a higher energy alcohol fuel, is compatible with 

existing vehicles and existing infrastructure, and has twice the renewable energy content of E10. 

So indeed, these are tremendously exciting technologies that are 

coming online and squarely put the U.S. in a leadership position 
174 

in the global biofuels market. If we stay the course, this technology 

really is just at its beginning. 

We start today with biofuels. Using this technology we will be 

able to unlock sugars in cellulose, and tomorrow these same sugars 

and the same supply chains that we will be enabling can enable 

a whole new world of biochemical and biomaterials. Delivering on 

the promise of a bio-based economy. 

Now, I firmly believe that reversing course on the RFS would 

have devastating effects. Short term it injects uncertainty into an 

improving economy. Medium term, it slows down the private, domestic investment that we will need to build plants two, three, four 

and five. Long term, we could find ourselves shipping these technologies, these jobs and, more importantly, these environmental 

benefits overseas to countries that have more stable policy environments. 

That is why DuPont is particularly concerned with the EPA’s recent proposed rule on the 2014 renewable volume obligations. We 

believe that these targets should be set in a way that drives higher 

overall blend use rates into the future, not the opposite. 

Now, DuPont respectfully asserts that the Renewable Fuel 

Standard works well. Do not mess with it. Our industry is at a critical juncture where advanced commercial production is under construction and policy stability will significantly impact investments 

and the pace of that commercialization. 

Thank you. 

[The prepared statement of Mr. Collins follows:] 
175 
176 
177 
178 
179 
180 
181 
182 
183 
184 
185 
186 
187 
188 
189 
190 
191 
192 
193 
194 
195 
196 
197 
198 
199 

Senator BOXER. Thank you so very much. 

Let me turn to Mr. Charles Drevna, President, American Fuel 

and Petrochemical Manufacturers. Welcome, sir. 

STATEMENT OF CHARLES T. DREVNA, PRESIDENT, AMERICAN 

FUEL AND PETROCHEMICAL MANUFACTURERS 

Mr. DREVNA. Chairman Boxer, thank you. Ranking Member 

Vitter and members of the Committee, I am pleased to be here. 

In 2007, Congress enacted energy legislation which in essence 

promised significant steps toward energy independence, national 

security and added environmental protections. A major component 

of that law known as the RFS calls for massive amounts of renewables to be blended into the Nation’s transportation fuel supply. 

In 2013, we now know that the RFS Program was based upon 

erroneous market assumptions, obstacles that prevent the safe consumption of ethanol at increasing mandated levels and many other 

unintended negative consequences. 

These critical flaws in combination with the resurgence of domestic energy production have led us to one unquestionable conclusion. 

It is not abundantly clear that the RFS has systemic problems that 

Congress must address immediately and decisively to avoid severe 

economic harm to individual consumers and to the Nation’s economy. 

Madam Chair, you asked the previous panel whether or not Congress should use every year to increase the, or set the volumes, for 

renewables. I submit that you already did in 2007. Those volumes 

are set statutorily. 

Senator BOXER. You misunderstood me, but we will get into that 

later. 

Mr. DREVNA. Ironically in a free market consumer choice and economics would drive the safe and efficient introduction of biofuels. 

As Mr. Collins just stated, they are inputting a lot of money into 

the free market, I would say, not some preconceived false market. 

DuPont is a pretty big company. They have some smart people. I 

understand, I understand the idea of the free market and I applaud them for doing it. 

However, mandates are not the free market, and the reality is 

that the RFS will raise prices for virtually all consumer goods, possibly leading to a consumer backlash against renewables generally, 

not just the mandates. We believe this is not the result that Congress wants to achieve. In short, we should repeal this act. 

We talked about the blend wall. We understand that we cannot 

go to blend wall. Another question was asked of the previous panel. 

Will the refining industry continue to use ethanol? Yes, we are 

geared to use it at 10 percent. The problem is going over 10 percent 

whether it is from technologies that exist today, like corn ethanol, 

or cellulosic ethanol. It is still ethanol. The automobile engine or 

the lawnmower engine, it makes no differentiation between the 

two. 

Complicating matters further, we are not the entities that in 

many cases actually blend the ethanol and we must go into the 

open market to purchase the compliance credit known as the RIN. 

When this fuel supply contains the maximum number of renewable 

fuel that it can handle, no more RINs can be generated for pro-
200 

ducers for compliance. So, in essence, the RIN is a permit to sell 

gasoline and diesel. It is the mirror image of the cap and trade system. 

And Senator Vitter, this goes to your question regarding the impact on consumers ultimately at the pump. Refiners are going to 

have a couple of choices if this RIN market continues at it was in 

the winter and summer of 2013 here. If you cannot get the RIN 

credit to sell the gasoline or diesel, you can either cut runs or you 

can export more. Either way, as studies have indicated, either way 

is not good for the American consumer. 

The volumes that EPA proposed in August to waive the 2014 requirements is a good start, but we believe you need an additional 

cushion. We believe you are trying to be too, too accurate on setting 

that number. We think a 9.7 percent would be better to allow some 

liquidity in the market. 

In closing, I have got 5 seconds here, folks, this is an unworkable 

law. It is a negative impact on the consumer. We understand the 

desire of Congress in 2007, but let us look at it from a 2013 reality. 

Thank you. 

[The prepared statement of Mr. Drevna follows:] 
201 
202 
203 
204 
205 
206 
207 
208 
209 
210 
211 
212 
213 
214 
215 
216 
217 
218 
219 
220 
221 
222 
223 
224 
225 

Senator BOXER. Thank you, sir. 

I wanted to mention for the benefit of everyone watching that 

our first two witnesses were majority witnesses. Our last witness 

is a minority witness. Our next witness is a bipartisan witness, and 

that is Mr. Jon Holzfaster, owner and operator of a farm. And we 

welcome you. 

STATEMENT OF JON HOLZFASTER, OWNER AND OPERATOR, 

HOLZFASTER FARM 

Mr. HOLZFASTER. Thank you. Chairman Boxer, Ranking Members Vitter and Sessions, thank you for the opportunity to testify 

about our Nation’s domestic renewable fuels. Senator Fischer, 

thank you for your earlier introduction. Go Huskers. 

[Laughter.] 

Mr. HOLZFASTER. My name is Jon Holzfaster. I have been farming for 27 years in Southwest Nebraska. I run a cattle feeding operation and use ethanol blends on 30 percent on my farm. I grow 

corn, soy beans, popcorn, wheat, and alfalfa. I serve on NCGA’s 

Corn Board and Chair their NASCAR Advisory Committee. I previously served as their liaison to the National Cattlemen’s Beef Association. 

NCGA was founded in 1957 and represents 40,000 dues-paying 

corn growers. Corn is important globally as food, feed and fuel. It 

is possibly the most versatile crop in the world, and demand is at 

an all-time high. The RFS is a critical piece of our Nation’s energy 

policy. In 2012, the RFS supported more than 300,000 jobs, displaced over 450 million barrels of imported oil, lowered gas prices 

at the pump by nearly $1, all while improving the environmental 

footprint of our Nation’s transportation fuels. 

I am proud to say that farmers work hard to be good stewards 

of the land and environment. Corn farmers have responded to demand by producing more corn on approximately the same amount 

of land. In the last 30 years, corn production has improved in all 

measures of resource efficiency, land use, soil erosion, water use, 

energy use and greenhouse gas emissions. 

Corn ethanol is one of the most successful components of our Nation’s renewable energy policy. Despite this, several environmental 

groups choose to ignore scientific evidence and side with the oil and 

gas industry instead of embracing a renewable energy resource 

grown here at home. 

With the emergence of the ethanol industry, U.S. farmers have 

responded to demand by growing significant larger corn crops while 

using significantly fewer inputs. Of this increased crop, 40 percent 

was used for livestock feed and 31 percent for ethanol production. 

During the ethanol production process, two other co-products are 

made, corn oil, which is used for biodiesel production, and dried 

distiller’s grains. According to the U.N. Food and Agricultural Organization, DDGs have become the most popular feed ingredient 

used in beef, dairy, swine and poultry diets. I feed locally produced 

DDGs to my cattle in my feed yard. If I did not have access to this 

product, I would seriously consider eliminating cattle feeding from 

my operation. 

We have heard criticism that the production of ethanol has 

forced land out of the Conservation Reserve Program. However, 
226 

this is not true. General CRP sign-up acreage has decreased, but 

continuous sign-ups have increased and still target the most environmentally sensitive land. The land that is considered environmentally sound is returned to production. 

There are over 20 ethanol plants operating in Nebraska. This 

gives me multiple competitive options for marketing my grain, options that exist because of the commitment that Congress made establishing the RFS. Before these ethanol plants were built, a high 

percentage of the corn in our area was exported. Now virtually 

every bushel is transformed into fuel and feed locally. That value 

is captured and multiplied throughout our communities, generating 

economic vitality and tax revenue. 

Decisions affecting next year’s crop have already been made. In 

the past, the RFS has provided some certainty that there would be 

a viable commodity market. But EPA’s proposed rule eliminates 

this certainty. Based on USDA commodity costs and returns, current market prices fall below the price of production. This recent 

decline in the price of corn is the largest drop in prices in six decades. Combined with increased input costs and lower crop prices, 

it would no longer be viable for farmers to provide the resources 

as they do. 

NCGA appreciates this Committee’s and Subcommittee’s work to 

understand our perspective and we strongly believe the RFS is 

doing exactly what it is intended to do. 

I look forward to hearing testimony and answering questions. 

Thank you. 

[The prepared statement of Mr. Holzfaster follows:] 
227 
228 
229 
230 
231 
232 
233 
234 
235 
236 
237 

Senator BOXER. Thank you. Our next witness is Mr. Scott Faber 

of the Environmental Working Group. Welcome. 

STATEMENT OF SCOTT FABER, SENIOR VICE PRESIDENT FOR 

GOVERNMENT AFFAIRS, ENVIRONMENTAL WORKING GROUP 

Mr. FABER. Thank you. Chairman Boxer, Ranking Member 

Vitter, members of the Committee, thank you very much for the opportunity to testify. I do not envy your job after reading all of the 

written testimony and many of the footnotes and supplemental reports. It would be hard to be able to judge whether the RFS is 

working or not. 

Our view is that we need an RFS. We share your belief that RFS 

is critically important to reduce the carbon intensity of our liquid 

fuels but that the current RFS is not working as you intended 

when Congress passed the Energy Independence and Security Act 

of 2007. 

In particular, we believe that RFS is not providing a powerful 

enough incentive for the development of low carbon second generation biofuels to offset the negative impacts of conventional biofuels 

like corn ethanol. And the simple fact of the matter is that the 

surge in corn ethanol production that occurred after 2007 has encouraged farmers to plow up millions of acres of wetlands and 

grasslands, releasing carbon stored in the soil into the atmosphere. 

But that is not all. Because farmers have applied more fertilizer 

to these newly converted lands, the RFS has also increased nitrous 

oxide emissions, increased polluted runoff into our rivers, lakes and 

bays, increased water use and increased the emissions of air pollutants like particulate matter. 

I expect the environmental impacts of corn ethanol will continue 

to be subject to debate for many years. For what it is worth, the 

National Academy of Sciences looked at these questions and the 

NAS, relying on EPA’s analysis, concluded, and I quote, corn grain 

ethanol produced in 2011 is a higher emitter of GHG than gasoline 

and the increase in corn production has contributed to environmental and surface effects on surface and groundwater. And finally, and again I quote, projected air quality effects from ethanol 

fuel would be more damaging to human health than those from 

gasoline use. 

And while the corn ethanol mandate has been great for corn 

farmers, and times have not always been great for corn farmers, 

it has contributed to higher food and feed prices. By diverting more 

than 40 percent of our corn crop to displace just 7 percent of our 

gasoline, we have increased the price of food and feed. That is according to everyone from USDA to the World Bank to independent 

economists. They found that the rapid expansion of corn ethanol 

after passage of the 2007 law increased the price of corn and ultimately the cost of basic staples like milk and meat. 

Fortunately, some second generation biofuels hold real promise 

because, as you have heard today, many of these fuels convert crop 

waste, wood waste, even municipal solid waste, not food, into fuel. 

Unfortunately, as you have also heard today, AAA, automakers, engine manufacturers and this morning the EPA have repeatedly told 

us that the vast majority of engines and infrastructure are simply 

not yet compatible with higher-ethanol blends. 
238 

So, there is a real world limit on the amount of ethanol that can 

be blended into gasoline. We need to divert more of that limited 

pool to second generation biofuels, and EPA’s proposed RVO takes 

an important small first step in that direction. 

There are other steps that we can take to accelerate the development of low carbon second generation biofuels. At a minimum, EPA 

could level the playing field for these fuels by making all corn ethanol subject to the same greenhouse gas reduction standards. Right 

now, as you know, most corn ethanol production is simply exempt 

from any greenhouse gas reduction standards. By contrast, second 

generation biofuels must reduce GHG emissions by 50 or 60 percent. 

There are other steps we could take as well, especially to accelerate the development of drop-in biofuels that do not create the infrastructure and engine compatibility problems that we have heard 

about today. 

So, let me stop there and simply say, again, we support RFS, we 

believe it is important to have an RFS to drive the development of 

low carbon liquid biofuels but that RFS is not providing a strong 

enough incentive to develop the second generation fuels that I 

know we all would like to see in the marketplace. 

Thank you. 

[The prepared statement of Mr. Faber follows:] 
239 
240 
241 
242 
243 
244 
245 
246 
247 
248 
249 
250 
251 
252 
253 
254 

Senator BOXER. Thank you very much. And we complete with a 

majority witness, Mr. Brooke Coleman, Executive Director, Advanced Ethanol Coalition. Welcome. 

STATEMENT OF BROOKE COLEMAN, EXECUTIVE DIRECTOR, 

ADVANCED ETHANOL COUNCIL 

Mr. COLEMAN. Thank you. Good morning Chairwoman Boxer, 

Ranking Member Vitter and members of the Committee, my name 

is Brooke Coleman. I am the Executive Director of the Advanced 

Ethanol Council. 

The Advanced Ethanol Council represents worldwide leaders in 

the effort to develop and commercialize the next generation of ethanol fuels. We were founded by corporate leaders to establish one 

voice for the advanced and cellulosic ethanol industry and we 

maintain a partnership with the Renewable Fuels Association. 

I, too, have submitted voluminous written testimony like my colleagues have, but I want to make a couple of points in the time 

that I have. 

First, the Federal Renewable Fuels Standard is basically an advanced biofuel development policy at this point. Ninety percent of 

the gallons left in the policy are advanced biofuel gallons. Critics 

want to make the policy all about corn ethanol because they think 

it puts them in the best position to succeed legislatively, politically 

and from a public relations perspective. But what is really at stake 

here is the emergence of a new low carbon industry via both standalone plants and bolt-on technologies at existing plants. 

If this country is going to lead the world in innovation, create 

new jobs, further reduce dependence on foreign oil and mitigate climate change emissions, it must reject backward thinking and move 

forward. And the RFS does that. 

Second, proposals to open up the RFS are the policy equivalent 

of exporting the advanced biofuel opportunity to other countries 

like Brazil and China. The United States is not going to make a 

$12 billion per month commitment to clean energy, like China has. 

The U.S. has not made a commitment to biofuel infrastructure and 

flex-fuel vehicles like Brazil has. What we have is the RFS, described by one of my members as the gold standard globally for advanced biofuel policy. 

A recent report by Navigant Consulting in my home State of 

Massachusetts looked at the country ranking for advanced biofuel 

development and it found that the United States is No. 1 because 

of the RFS: ‘‘The United States is currently home to estimated 67 

percent of global ventures in advanced biofuels, and the Renewable 

Fuels Standard will keep the U.S. at the epicenter of the market 

going forward.’’ 

Less than 6 years after the signing of RFS II by President Bush, 

and notwithstanding our 100-year recession, we now have plants in 

places like Vero Beach, Florida, and Columbus, Mississippi. We are 

finishing construction on a plant in Hugoton, Kansas, where at one 

point recently there were 100 construction workers and engineers, 

1,000, I apologize, 1,000 construction workers and engineers in a 

town of 1,400. 

Third, I would encourage the Committee to take a really hard 

look at the arguments being made against the RFS. There is an ex-
255 

traordinary amount of misinformation flowing around this regulation, including in this room. We all know that the oil industry has 

enough money to make it seem like it is raining on a sunny day 

and that is what is going on right here. The RFS is increasing food 

prices, we have heard. But the Food Index for food prices over the 

last 8 to 10 years is going down, not up. We heard that high rent 

prices are a cost of compliance that will ultimately increase gas 

prices. 

The oil industry has been here telling you that, until quarterly 

earnings calls reveal that companies like BP, ExxonMobil, Hess, 

Murphy, Marathon and Phillips 66 have all reported no significant 

costs and actually, in most cases, profit from the higher RIN prices 

that were being traded in 2013. That is because they receive the 

RIN for free when they buy a gallon of renewable fuel. You cannot 

have the same dollar be a cost and a profit. That is Economics 101. 

Finally, a really important question is often overlooked. If not renewable fuel gallons, then what? It is not 2005 gasoline in the rule. 

It is unconventional oil coming in on the margin of the industry. 

If that is where we want to go as a policy, that is a more expensive 

product, it is a more carbon-intensive product, and it is a more ecologically damaging product. 

Going forward, to close, it is absolutely critical for Congress to 

leave the RFS alone. Tens of billions of dollars have been invested 

with the expectation that Congress will not change the rules in the 

middle of the game. The program is disruptive, but it is disruptive 

by design with flexibility. 

I would hope that the Committee will consider the idea that the 

program is getting all this attention not because it is broken, but 

because it is working. 

[The prepared statement of Mr. Coleman follows:] 
256 
257 
258 
259 
260 
261 
262 
263 
264 
265 
266 
267 
268 
269 
270 
271 
272 
273 
274 
275 
276 
277 
278 
279 
280 
281 
282 
283 
284 
285 
286 
287 
288 
289 
290 
291 
292 
293 
294 
295 
296 

Senator BOXER. Thank you, sir. 

So, I will start. Mr. Drevna, under current law, there is no limit 

on the rate of increase in the alternative fuels requirement up to 

the target. You probably know that. I am not asking a question, I 

am just stating fact. And I believe setting such a limit, which was 

proposed by one of the members of this panel, would be a disincentive to development of new technologies. And the first panel agreed 

with that. And I want to turn to my questions—Mr. Holzfaster, 

what percentage of ethanol is blended into the fuel you use in your 

farming equipment? 

Mr. HOLZFASTER. Currently the fuel that we have delivered to 

our farm is delivered at a 30 percent blend. 

Senator BOXER. Thirty percent blend. Has the use of this level 

of ethanol caused any engine or performance problems in your 

equipment? 

Mr. HOLZFASTER. It has not. 

Senator BOXER. None at all? 

Mr. HOLZFASTER. None at all. 

Senator BOXER. OK. And Mr. Holzfaster, in your testimony you 

briefly described the positive economic impacts on your community 

resulting from the RFS Program. Would you describe a little bit 

more what it is like where you live and how the RFS has helped 

your community and other rural communities across this country? 

Mr. HOLZFASTER. I live in a rural community. The small town of 

Paxton that I come from has less than 570 people when everybody 

is home. 

Senator BOXER. We have that on my street. 

[Laughter.] 

Senator BOXER. I understand. 

Mr. HOLZFASTER. The certainty that the RFS has provided to the 

commodity markets has allowed confidence in production. Right 

now, at the close of market yesterday, corn prices were below my 

cost of production. That takes away a lot of the confidence and security that otherwise I would have to proceed to the following year. 

I have friends and neighbors who, unlike a few years ago, say 

their families now drive safe, reliable vehicles. A neighbor whose 

kids that are in high school can now say yes, I am going to college. 

Otherwise, in a rural area, you would say well, we will see what 

the corn market does. That confidence is there with the current 

RFS. 

Senator BOXER. So, it is fair to say you see prosperity moving 

into your community because of this? 

Mr. HOLZFASTER. Yes, that would be fair. Prosperity is a strong 

word but at least security. 

Senator BOXER. Better hope? Is that a better way to put it? More 

hope? 

Mr. HOLZFASTER. Absolutely. Absolutely. 

Senator BOXER. More hope. OK. 

I wanted to point out, because I am going to yield back, that 

other environmental organizations do support the current RFS including the NRDC, the Union of Concerned Scientists. But I would 

say, Mr. Faber, I was pleased that you would say your problem is 

particularly with the impact of the corn ethanol on the environ-
297 

ment. Is that fair to say? But you are supporting the development 

of these other alternative fuels, the non-food source? Is that fair? 

Mr. FABER. That is right, Chairman Boxer. Our big challenge is 

there simply is a limited pool because of the constraints on engines 

and infrastructure for ethanol. And I think we are all anxious to 

see second generation ethanol reach the marketplace. 

Senator BOXER. I understand. 

Mr. FABER. Right now, that marketplace is completely saturated 

by conventional corn ethanol. 

Senator BOXER. So you would not repeal the whole thing, but you 

would alter it? 

Mr. FABER. I think that there are certainly reforms that we can 

make that give the second generation of fuels a foothold in the pool 

for, with corn ethanol. Absolutely. 

Senator BOXER. OK. Thank you. I would yield back and ask Senator Vitter for his time. 

Senator VITTER. Thank you, Madam Chair. I am going to ask one 

quick question and then reserve my time and let Senator Inhofe go 

because he has some pressing items on his schedule. 

But my very quick question, and I will not get off topic, is just 

to ask General Clark. We have had a discussion about another public policy issue and I repeated a question to you in a letter yesterday which you had committed to answer in our conversation on October 8. And so the simple question is, do you plan on answering 

that question? 

General CLARK. I am very happy to answer that question. I have 

not been paid to go down to Louisiana. I went down there to talk 

about Lifeline phones because over 36,000 veterans in the State of 

Louisiana are dependent on those phones for telephone communication. Those phones are not paid for by the U.S. Government. They 

are not a rip-off of the taxpayer. 

Senator BOXER. Why are we talking about people going to talk 

about phones? What is this? This is not the Commerce Committee. 

Senator VITTER. I was not trying to get off topic. 

Senator BOXER. Well, you got off topic. 

Senator VITTER. Will you be answering the full question in writing? 

Senator BOXER. I am not, may I just say, as Chairman of this 

Committee, I give people a lot of leeway. We are not going to attack 

panelists on other issues. 

Senator VITTER. I am not—— 

Senator BOXER. Period. End of quote. If you want to do it, have 

a press conference. 

Senator VITTER. I will take that as a yes, so I look forward to 

your full answer in writing. With that, I will reserve the rest of my 

time and let Jim Inhofe go because of his schedule. 

Senator INHOFE. Thank you very much, both of you, and I appreciate it. 

General Clark, you and I have known each other for a long time. 

Actually, we have been friends even though we have disagreed. But 

I have to say that I was very impressed with the comments you 

made at the beginning, particularly when you said that we need to 

produce as much domestic oil as possible, looking at it from a national security perspective. 
298 

So, for the record, now there is not time to give the answer now, 

don’t you think a good way to increase that production, domestic 

production, would be to go into the Federal public lands for expiration? I will wait, just to get that for the record. 

I have two questions for Mr. Drevna. Mr. Drevna, first of all, 

thanks for redeeming me on my cap and trade statement. Right 

now, we have gas stations all over my State. Stick that up again, 

will you? And I am asked everywhere I go, it seems like it is unanimous. They all crowd into these places and I am really concerned 

about it because I get the question from the people in Oklahoma 

as to, you know, is under this RFS system, the way that it is divided up, what kind of assurance would there be that in my State 

of Oklahoma that we would be able to continue just at the current 

rate of selling clear gas? Do you have any thoughts about that? 

Mr. DREVNA. Senator Inhofe, yes. That is one of the reasons why 

we specifically in our waiver request to the EPA on the 2014 RVOs 

that we had suggested that they even go a little bit lower because, 

yes, in order to provide the clear gasoline. And by no means is 

Oklahoma the only State who wants E0 clean gasoline as was mentioned earlier in the opening statements for boats, et cetera. 

So, we want that a little bit lower to give it a little bit more fluidity into the system. Our position is that if EPA errs a little bit 

on the low side of the ethanol mandate for 2014, no harm, no foul 

because we will be blending that amount anyway. If they err on the 

high side, then we are going to find ourselves back in that same 

position that we were in the late spring, early summer of 2013 

where the RIN prices, which are not free, went through the roof. 

So, what we are saying is that we need that fluidity. The other 

problem with providing E0 to everybody is that even with E0, we 

are still required to find a RIN for that particular gallon of gasoline. So, we have to offset it by going somewhere else. That is why 

we need that extra cushion. We applaud EPA for acknowledging 

the blend wall but we believe that they have to go a little bit further. 

Senator INHOFE. Maybe for the record you can give me a little 

simpler response that I can tell them when they ask the question 

in Oklahoma. And it is something of great concern. One more question. 

A lot of people are characterizing the oil and gas industry as monopolistic. I think it is really important that we realize the industry, I am going to make a statement and see if you agree with it, 

the oil industry has invested more on alternative fuel research and 

development than the entire renewable sector and the Federal Government combined. Now, a lot of that has taken place in our beautiful little city of Bartlesville, Oklahoma. When you are faced with 

this accusation of a monopolistic, what is your response? 

Mr. DREVNA. Well, as you said so accurately, we have invested 

as an industry more than anyone else as far as the advanced 

biofuels. The question is, are products monopolistic or are companies monopolistic? The product is gasoline and diesel. That is what 

we sell. How can we, we do not control the gas stations who sell 

the gasoline. We have franchisees. About 50 percent of the ownership of gas stations are franchisors who have contracts with the 

folks. The other 50 percent, or more than 50 percent, are inde-
299 

pendent, you know, non-branded. They do not want to put the infrastructure in at upwards of $200,000 a station to sell a product 

that no one wants. 

Senator BOXER. Thank you. Well, we are going to put into the 

record the poor oil companies’ profits for the third quarter. The five 

big ones, two of which are not American companies, earned $23.1 

billion. So somehow I guess you can manage to spend a few bucks 

on the RINs. 

Mr. DREVNA. Madam Chair, it is not the question of spending 

dollars on RINs. It is how much we can put into the system and 

keep the American consumer—— 

Senator BOXER. I understand. You just complained about the 

price of the RINs, but maybe I heard you wrong. You did talk 

about the price of the RINs. But we are going to move forward 

here, and next we are going to have Senator Cardin. 

[The referenced documents follow:] 
300 
301 
302 
303 
304 
305 
306 
307 
308 
309 
310 
311 
312 
313 
314 
315 
316 
317 
318 
319 
320 
321 
322 
323 
324 
325 
326 
327 
328 
329 
330 
331 
332 
333 
334 
335 
336 
337 
338 
339 
340 
341 
342 
343 
344 

Senator CARDIN. Thank you, Madam Chair. 

Mr. Faber, I particularly thank you for your comments because 

I appreciate your testimony, I very much appreciate the group you 

represent, the Environmental Working Group. We are in agreement on our goals, and that is we understand the importance of energy security but we also want to make sure it is done in a way 

that is in the best interest of our environment. And I fully concur 

in that. 

And if we were drafting a Renewable Fuels Standard bill today, 

I think we would be very cautious about using corn ethanol. And 

yes, you can say something positive. It is produced domestically. 

But the damage it causes and the disruption to the food supply, its 

efficiency issues, are certainly not the desirable outcome and we 

would want better results. 

So, my question to you is, how do we level the playing field for 

second generation biofuels in the Renewable Fuel Standard provisions so that we can go to the type of product that is not only domestically produced but is better for the environment and our food 

supply? 

Mr. FABER. Thank you, Senator Cardin. As you well know, the 

rise, the sudden rise in corn prices had a devastating impact on the 

broiler industry. Just between 2008 and 2011, about one-third of 

broiler companies were either in bankruptcy or closed or for sale. 

So, it was a difficult time to make, for that industry to make the 

adjustment to the higher corn prices. I think is important to remember that while it certainly helped one part of agriculture, it 

had a really significant impact on a second point of agriculture. 

And to your point, I think if we had known that there would be 

this surge in prices in 2007, as a result of the mandate, we might 

have written a different kind of policy. Going forward, we think it 

is important to find ways to reduce the amount of corn ethanol that 

is blended into gasoline. 

As we have heard, there is a limited pool for ethanol of any kind. 

Right now, that pool is saturated by corn ethanol. To make room 

for second generation biofuels, especially cellulosic ethanol, we believe it is important for Congress to help reduce the amount of corn 

ethanol that we are required to blend into gasoline. We think that 

would send a powerful signal to the investment community to place 

their bets on second generation fuel. 

Senator CARDIN. So, just reducing the corn ethanol numbers 

would put additional incentives for investment into the next generation? 

Mr. FABER. I think we have to face a simple fact which is that 

the way that we are managing RFS, the delays in the RVO, the 

likelihood of litigation has created an enormous amount of uncertainty, and it is time for Congress to step in and provide some new 

direction so that the investment community knows what sorts of 

investments to make. 

Senator CARDIN. And let me bring up the second issue that you 

and are I in total agreement. The argument being made against 

trying to move forward a sensible reform of the Renewable Fuel 

Standards is that it opens up an area that could be mischief. And 

we have heard this argument many times before. 
345 

My view is that good policy is what we need to do and that the 

failure to enact good policy builds a pressure for more extreme results that could be damaging to our overall objective on the Renewable Fuel Standards. Would you want to comment on that? 

Mr. FABER. I share your concerns. Certainly amending the Clean 

Air Act is fraught with peril. There are other proposals to weaken 

the Clean Air Act that might be offered as part of that process. I 

think it is important to keep that in mind as we reevaluate—— 

Senator CARDIN. And I assume that if we do any of those issues, 

you will be one of the strongest voices to point that out? 

Mr. FABER. Absolutely. 

Senator CARDIN. And I will be also. 

Mr. FABER. I think there is a coalition that includes environmentalists, the people who produce food, the people who manufacture cars and other small engines who would work together to try 

to fend off any of those proposals, in part because we ultimately all 

want to see a more certain regulatory environment that really 

spurs the growth of these second generation fuels. 

Senator CARDIN. Thank you. 

Senator BOXER. Yes, and there is a similar coalition that would 

oppose us even opening up the Clean Air Act. I can assure you of 

that. 

Mr. Coleman, you wanted desperately to say something. And 

then we will turn to Senator Fischer. 

Mr. COLEMAN. Yes. Thank you. I sort of accused the RFS debate 

of flowing down the line of misinformation and I am hearing more 

of it, so I just want to respond. 

Point No. 1, the monopoly question that Senator Inhofe raised. 

It does not matter whether it is a monopoly or not. It is not a pricedriven, competitive marketplace. It is controlled at the top by 

OPEC, in the United States it is controlled at the wholesale level 

in huge swaths of this country by ExxonMobil. And so let us not 

get into a debate about whether it is a monopoly or not. 

The issue is that it drives innovators out of a space. So, our guys 

have to look for and say, all right, if I innovate and if I create a 

better mouse trap and I beat those guys on price, I am going to sell 

my mouse trap. The problem with OPEC is that they can meet on 

a Tuesday, change prices on a Thursday, and that increases risk 

through the roof for guys that are trying to predict what is going 

to happen in 2017, 2018. 

So, to Senator Inhofe’s point, it does not matter whether it is a 

monopoly. What is happening is collusion in driving innovation out 

of the space, and the RFS fixes that by giving us a reasonable expectation of demand over time—— 

Senator BOXER. OK. I have to cut you off. You made a good point. 

And I want to say, Senator, do you mind if Senator Vitter goes 

first with his remaining 3 minutes? Thank you. 

Senator VITTER. Thank you. General Clark, did I hear your statement right that it is clear, and manufacturers agree, that E15 is 

fine, safe and no problem for 2001 and later? 

General CLARK. I said that the Department of Energy tested a 

number of cars, I think 80-some-odd cars, 150,000 miles, 2001 and 

later models, with no problems from E15. What I said was manu-
346 

facturers on current models, 2011, starting 2012 and 2013, those 

manufacturers are warranting for E15. 

Senator VITTER. OK, that is an important clarification. 

Let me just submit for the record some questions and answers 

summarized in a Jim Sensenbrenner letter which makes it crystal 

clear that manufacturers are extremely concerned about E15 for 

those older models going back to 2001 because that is a big concern 

by the people who make those engines. I would submit that for the 

record. 

Senator BOXER. Thank you. 

Senator VITTER. Let me also comment in reaction to some of the 

discussion about Clean Air Act issues, et cetera. Just as one hopefully important example, Senator Cardin and I are working on a 

focus bill in this area. The goal of that bill is to make this program 

far more workable and take out the threat of hitting the blend wall 

and causing real disruption, particularly for consumers. 

The goal is not to revisit the Clean Air Act, to do away with the 

program, et cetera. Many of those things I would support. But in 

the context of working on this bill, that is not only not the goal, 

but I will oppose amendments that do that. And so it is just going 

to be about that sort of important reform to this program which I 

think is necessary. 

Having said that, if the choice is between EPA using its waiver 

authority, and presumably it will have that every year, or doing a 

reform legislative effort like that which is not about the Clean Air 

Act, which is not about doing away with the whole program, I 

would like to hear from each of you what path you think we should 

go down. Basically, the legal status quo, let EPA handle it, or a focused legislative fix? 

Senator BOXER. Senator. Would each of you commit to putting 

that important question in writing and getting it to this Committee 

in the next couple of weeks? 

Senator VITTER. OK. And then in closing, Mr. Drevna, is EPA on 

time for the biodiesel standards? 

Mr. DREVNA. Absolutely not. 

Senator VITTER. And does that impact EPA’s ability to increase 

the mandate again? 

Mr. DREVNA. Absolutely. If you look at section 211(o) of the 

Clean Air Act, when the RFS was enacted, the four buckets, so to 

speak, the different fuels, when it, Congress, set the volumes. 

Senator VITTER. A final related question. Does any type of ethanol impact that blend wall issue? 

Mr. DREVNA. As I mentioned earlier, Senator, once that molecule 

of ethanol is in an engine or an automobile or vehicle, it cannot differentiate whether it comes from corn, sugar cane from Brazil, or 

cellulosic that may or may not exist. 

[The referenced information follows:] 
347 
348 
349 
350 
351 
352 
353 
354 
355 
356 
357 
358 
359 
360 
361 
362 
363 
364 
365 
366 
367 
368 
369 
370 
371 
372 
373 
374 
375 
376 
377 
378 
379 
380 
381 
382 

Senator BOXER. Thank you, Senator. 

The memorial has started. So, Senator Fischer, you will finish it 

up. 

Senator FISCHER. Thank you, Madam Chairman. Of course I am 

going to be directing my questions to my fellow Nebraskan. So, welcome again, Jon, for being here. 

I appreciated your comments to the Chairwoman as you answered her questions with regards to the impact on rural economies on agriculture as a whole if the RFS is changed. When we 

talk about higher corn prices, I am a cattle rancher, so I certainly 

understand the impact of those higher prices and what they do to 

my industry as well. But I am fully supportive of ethanol because 

of the good economic impact is has had on rural communities, rural 

States and truly our country as a whole. 

With that, I would like to get your response on a couple of issues 

that were brought up today. The RFS requires that corn and other 

feed stuffs used to produce renewable fuels from the RFS only be 

sourced from land that was already engaged in agriculture production in 2007 and feed stuffs that are grown on land converted to 

crop land after 2007, they do not qualify for that renewable biomass. I think that is a point that we need to reinforce here. 

We have heard about wetlands being plowed up. We have heard 

about prairies being plowed up. We have heard about the use of 

water when we talk about the production of ethanol. Can you specifically address land use issues and water? You know, in Nebraska 

we are very fortunate that we have the Ogallala Aquifer which I 

am on top of the Ogallala Aquifer as you are down in Paxton as 

well. Could you address those? 

Mr. HOLZFASTER. Sure. Under the current Farm Bill, there are 

swamp buster and sod buster provisions that prevent me from 

doing any type of that conversion. That misinformation has been 

out there, as Mr. Coleman has stated. 

When you talk about water in Nebraska, it is a tremendous resource, one that we strive tirelessly to protect and use efficiently. 

We, in agriculture, have been accused of creating dirty air and 

dirty water and that, in all due respect, Mr. Faber, hurts. I breathe 

that air. I drink that water. 

I love this town, but one thing I look forward to is going home 

and breathing that air and drinking that water. I know it is safe, 

I know it is clean, and I would have it no other way. It is who I 

am, it is what I am, it is where my family lives. So, that is painful 

to hear those terms put out there. It is not, that is where we are 

at. We want clean air and water as much as anyone else. 

As far as the protection of that resource, I have been farming for 

27 years and in those years, I am growing approximately 50 percent more corn on 50 percent less water. The technology that has 

been available to modern agriculture has been tremendous in that 

efficiency, in the efficient use of water. 

Senator FISCHER. And how much water does an ethanol plant 

use? What would you compare it to? 

Mr. HOLZFASTER. A 50 million gallon a year ethanol plant uses 

about as much water as a 9-hole golf course. It is a lot of water. 

It takes a lot of water to run a 9-hole golf course and it does an 

ethanol plant as well. But that is efficient and good use of water. 
383 

Senator FISCHER. Thank you. 

I would like to say to all of you I appreciate you coming in. I 

think we have to have a balance when we talk about our energy 

resources and how we develop those in the future. Thank you very 

much. 

Thank you, Madam Chair. 

Senator BOXER. Thank you. 

I want to thank everyone for all of your cooperation. I am sorry 

we had a couple of sort of strange personal attacks. I was 

blindsided by that. 

But clearly we are on the verge of technological breakthroughs 

that can make America more secure, that will make America more 

secure. And, as Chairman of this Committee, and I have the gavel 

for now, I am not going to let us reverse course on that. I just am 

not. Now, no program is perfect, that is for sure, whatever it is. 

And even in the private sector no new product is perfect and no 

new marketing strategy is perfect at first. 

So, we have got to work together and I am willing to do that. But 

I just think that, overall, let us not turn our back on a way to make 

sure that we can become more energy independent and have a better environment in the long run, making sure that we do stress 

those non-food sources I think in the future is very important. 

I want to thank all of you. This was a tough hearing because we 

had to push so fast. And we know that EPA has a lot of authority 

under current law to respond to some of the things that were said 

here, on all sides. And they have got a hard job. But, you know, 

they have to keep politics out of it and go by the facts. And remember that show a long time ago, Show My Age? Only the facts, 

Madam, that was that show. Most people here were not even born 

when I watched that show. 

So, we will move forward with the facts. And I also want to say 

that Senator Fischer, she played a very important role in finding 

us this, I think, star witness today, our farmer who is dealing with 

this on the ground and he can testify to what is working and what 

is not. And he does not really have that, in my opinion, that special 

agenda that others may bring to the table. So, thank you so much, 

sir. 

And thanks to everybody in the audience. 

We stand adjourned. 

[Whereupon at 11:15 a.m. the Committee was adjourned.] 

[Additional material submitted for the record follows:] 
384 
385 
386 
387 
388 
389 
390 
391 
392 
393 
394 
395 
396 
397 
398 
399 
400 
401 
402 
403 
404 
405 
406 
407 
408 
409 
410 
411 
412 
413 
414 
415 
416 
417 
418 
419 
420 
421 
422 
423 
424 
425 
426 
427 
428 
429 
430 
431 
432 
433 
434 
435 
436 
437 
438 
439 
440 
441 
442 
443 
444 
445 
446 
447 
448 
449 
450 
451 
452 
453 
454 
455 
456 
457 
458 
459 
460 
461 
462 
463 
464 
465 
466 
467 
468 
469 
470 
471 
472 
473 
474 
475 
476 
477 
478 
479 
480 
481 
482 
483 
484 
485 
486 
487 
488 
489 
490 
491 
492 
493 
494 
495 
496 
497 
498 
499 
500 
501 
502 
503 
504 
505 
506 
507 
508 
509 
510 
511 
512 
513 
514 
515 
516 
517 
518 
519 
520 
521 
522 
523 
524 
525 
526 
527 
528 
529 
530 
531 
532 
533 
534 
535 
536 
537 
538 
539 
540 
541 
542 
543 
544 
545 
546 
547 
548 
549 
550 
551 
552 
553 
554 
555 
556 
557 

Æ