CONFLICTS AND UNINTENDED CONSEQUENCES 

OF MOTOR FUEL STANDARDS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND 

ENVIRONMENT 

COMMITTEE ON SCIENCE, SPACE, AND 

TECHNOLOGY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

WEDNESDAY, NOVEMBER 2, 2011 

Serial No. 112–49 

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CONFLICTS AND UNINTENDED CONSEQUENCES OF MOTOR FUEL STANDARDS 
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70–973PDF 2011

CONFLICTS AND UNINTENDED CONSEQUENCES 

OF MOTOR FUEL STANDARDS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND 

ENVIRONMENT 

COMMITTEE ON SCIENCE, SPACE, AND 

TECHNOLOGY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

WEDNESDAY, NOVEMBER 2, 2011 

Serial No. 112–49 

Printed for the use of the Committee on Science, Space, and Technology 

( 

Available via the World Wide Web: http://science.house.gov 
(II) 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

HON. RALPH M. HALL, Texas, Chair 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

LAMAR S. SMITH, Texas 

DANA ROHRABACHER, California 

ROSCOE G. BARTLETT, Maryland 

FRANK D. LUCAS, Oklahoma 

JUDY BIGGERT, Illinois 

W. TODD AKIN, Missouri 

RANDY NEUGEBAUER, Texas 

MICHAEL T. MCCAUL, Texas 

PAUL C. BROUN, Georgia 

SANDY ADAMS, Florida 

BENJAMIN QUAYLE, Arizona 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

E. SCOTT RIGELL, Virginia 

STEVEN M. PALAZZO, Mississippi 

MO BROOKS, Alabama 

ANDY HARRIS, Maryland 

RANDY HULTGREN, Illinois 

CHIP CRAVAACK, Minnesota 

LARRY BUCSHON, Indiana 

DAN BENISHEK, Michigan 

VACANCY 

EDDIE BERNICE JOHNSON, Texas 

JERRY F. COSTELLO, Illinois 

LYNN C. WOOLSEY, California 

ZOE LOFGREN, California 

BRAD MILLER, North Carolina 

DANIEL LIPINSKI, Illinois 

GABRIELLE GIFFORDS, Arizona 

DONNA F. EDWARDS, Maryland 

MARCIA L. FUDGE, Ohio 

BEN R. LUJA ́ N, New Mexico 

PAUL D. TONKO, New York 

JERRY MCNERNEY, California 

JOHN P. SARBANES, Maryland 

TERRI A. SEWELL, Alabama 

FREDERICA S. WILSON, Florida 

HANSEN CLARKE, Michigan 

SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

HON. ANDY HARRIS, Maryland, Chair 

DANA ROHRABACHER, California 

ROSCOE G. BARTLETT, Maryland 

FRANK D. LUCAS, Oklahoma 

JUDY BIGGERT, Illinois 

W. TODD AKIN, Missouri 

RANDY NEUGEBAUER, Texas 

PAUL C. BROUN, Georgia 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

RALPH M. HALL, Texas 

BRAD MILLER, North Carolina 

LYNN C. WOOLSEY, California 

BEN R. LUJA ́ N, New Mexico 

PAUL D. TONKO, New York 

ZOE LOFGREN, California 

JERRY MCNERNEY, California 

EDDIE BERNICE JOHNSON, Texas 
(III) 

C O N T E N T S 

Wednesday, November 2, 2011 

Page 

Witness List ............................................................................................................. 2 

Hearing Charter ...................................................................................................... 3 

Opening Statements 

Statement by Representative Andy Harris, Chairman, Subcommittee on Energy and Environment, Committee on Science, Space, and Technology, U.S. 

House of Representatives .................................................................................... 8 

Written Statement ............................................................................................ 9 

Statement by Representative Brad Miller, Ranking Minority Member, Subcommittee on Energy and Environment, Committee on Science, Space, and 

Technology, U.S. House of Representatives ....................................................... 10 

Written Statement ............................................................................................ 11 

Witnesses: 

Mr. Brendan Williams, Senior Director of Advocacy, National Petrochemical 

and Refiners’ Association 

Oral Statement ................................................................................................. 13 

Written Statement ............................................................................................ 14 

Dr. Ingrid Burke, Director of the Haub School and Ruckelshaus Institute 

of Environment and National Resources, University of Wyoming; CoChair, 

National Research Council Committee on Economic and Environmental 

Impacts of Increasing Biofuels Production 

Oral Statement ................................................................................................. 20 

Written Statement ............................................................................................ 22 

Ms. Margo T. Oge, Director of the Office of Transportation and Air Quality, 

EPA 

Oral Statement ................................................................................................. 24 

Written Statement ............................................................................................ 25 

Dr. Jay Kesan, Professor and H. Ross and Helen Workman Research Scholar 

and Program Leader, Biofuel Law and Regulation Program, Energy Biosciences Institute, University of Illinois College of Law 

Oral Statement ................................................................................................. 29 

Written Statement ............................................................................................ 31 

Mr. Bob Greco, Group Director for Downstream and Industry Operations, 

American Petroleum Institute 

Oral Statement ................................................................................................. 35 

Written Statement ............................................................................................ 36 

Mr. David Hilbert, Thermodynamic Development Engineer, Mercury Marine 

Oral Statement ................................................................................................. 38 

Written Statement ............................................................................................ 40 

Mr. Jack Huttner, Executive Vice President, Commercial and Public Affairs, 

Gevo, Incorporated 

Oral Statement ................................................................................................. 41 

Written Statement ............................................................................................ 43 

Discussion 45 
Page

IV 

Appendix 1: Answers to Post-Hearing Questions 

Mr. Brendan Williams, Senior Director of Advocacy, National Petrochemical 

and Refiners’ Association ..................................................................................... 58 

Dr. Ingrid Burke, Director of the Haub School and Ruckelshaus Institute 

of Environment and National Resources, University of Wyoming; CoChair, 

National Research Council Committee on Economic and Environmental 

Impacts of Increasing Biofuels Production ........................................................ 61 

Ms. Margo T. Oge, Director of the Office of Transportation and Air Quality, 

EPA ....................................................................................................................... 65 

Dr. Jay Kesan, Professor and H. Ross and Helen Workman Research Scholar 

and Program Leader, Biofuel Law and Regulation Program, Energy Biosciences Institute, University of Illinois College of Law ................................... 73 

Mr. Bob Greco, Group Director for Downstream and Industry Operations, 

American Petroleum Institute ............................................................................ 80 

Mr. David Hilbert, Thermodynamic Development Engineer, Mercury Marine .. 83 

Mr. Jack Huttner, Executive Vice President, Commercial and Public Affairs, 

Gevo, Incorporated ............................................................................................... 87 

Appendix 2: Additional Material for the Record 

Letter to Chairman Andy Harris from Dr. Virginia H. Dale, Member, National Academies Biofuels Panel ......................................................................... 95 

Letter to Honorable Lisa P. Jackson, Adminstrator,Environmental Protection 

Agency, and White Paper, from Mitch Bainwol, President and CEO, Alliance of Automobile Manufacturers ..................................................................... 97 

Letter to Honorable Lisa P. Jackson, Adminstrator,Environmental Protection 

Agency, from Michael J. Stanton, President and CEO, Association of Global 

Automakers, Inc. .................................................................................................. 106 

Letters Submitted to Honorable Lisa P. Jackson, Adminstrator, Environmental Protection Agency, from NESCHAUM, Ozone Transport Commission, and NACAA ................................................................................................. 109 

Slide Presentation from Mr. David Hilbert, Thermodynamic Development Engineer, Mercury Marine ....................................................................................... 115 

Presentation from Mr. David Hilbert, Thermodynamic Development Engineer, 

Mercury Marine ................................................................................................... 123 

Gevo White Paper from the Testimony of Mr. Jack Huttner, Executive Vice 

President, Commercial and Public Affairs, Gevo, Incorporated ....................... 178 

Potential Supply and Cost Impacts of Lower Sulfur, Lower RVP Gasoline, 

Prepared for the American Petroleum Institute, July 2011, by Baker and 

O’Brien Incorporated ........................................................................................... 194 

Letters from Autobile Manufacturers to Honorable Lisa Jackson, Administrator, Environmental Protection Agency .......................................................... 213 

Letters to Representative F. James Sensenbrenner, Jr., from Briggs & Stratton, Subaru, General Motors, and Mercury Marine .......................................... 246 

Association of International Automobile Manufacturers, Inc: Response to EPA 

Decision to Approve E15 Ethanol Fuel for 2001–2006 MY Vehicles ............... 264 

National Research Council of the National Academies: Renewable Fuel Standard: Potential Economic and Environmental Effects of U.S. Biofuel Policy ... 266 

Letter from Chairman Ralph M. Hall to Honorable Lisa Jackson, Administrator, Environmental Protection Agency .......................................................... 296 

Letter to Chairman Ralph M. Hall from Honorable Gina McCarthy, Assistant 

Administrator, Environmental Protection Agency ............................................ 300 
(1) 

CONFLICTS AND UNINTENDED 

CONSEQUENCES 

OF MOTOR FUEL STANDARDS 

WEDNESDAY, NOVEMBER 2, 2011 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENERGY AND ENVIRONMENT, COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, Washington, DC. 

The Subcommittee met, pursuant to call, at 2:38 p.m., in Room 

2318 of the Rayburn House Office Building, Hon. Andy Harris 

[Chairman of the Subcommittee] presiding. 
2 
3 

HEARING CHARTER

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

SUBCOMMITTEE ON ENERGY AND ENVIRONMENT 

U.S. HOUSE OF REPRESENTATIVES 

Conflicts and Unintended Consequences of 

Motor Fuel Standards 

WEDNESDAY, NOVEMBER 2, 2011

2:00 P.M.—4:00 P.M. 

2318 RAYBURN HOUSE OFFICE BUILDING

Purpose 

On Wednesday, November 2, 2011, the Subcommittee on Energy and Environment of the Committee on Science, Space, and Technology will hold a hearing to 

examine motor fuel standards currently in place at the federal level and under consideration at the federal or State level; assess the scientific foundation for such 

standards; explore the inherent conflicts and unintended consequences of such 

standards; and question whether or not conflicts exist within the standards and the 

consequences of such effect the fungibility of, safe use of, and affordability of the 

United States motor fuel supply. 

Witnesses 

• Mr. Brendan Williams, Senior Director of Advocacy, National Petrochemical 

& Refiners Association. 

• Dr. Ingrid Burke, Director, Haub School and Ruckelshaus Institute of Environment and Natural Resources, University of Wyoming, and Co-Chair, National Research Council Committee on Economic and Environmental Impacts of 

Increasing Biofuels Production. 

• Ms. Margo T. Oge, Director, Office of Transportation and Air Quality, U.S. Environmental Protection Agency. 

• Dr. Jay Kesan, Professor and H. Ross & Helen Workman Research Scholar 

and Program leader of the Biofuel Law & Regulation Program, Energy Biosciences Institute, University of Illinois College of Law. 

• Mr. Bob Greco, Group Director, Downstream and Industry Operations, American Petroleum Institute. 

• Mr. David Hilbert, Thermodynamic Development Engineer, Mercury Marine. 

• Mr. Jack Huttner, Executive Vice President of Commercial and Public Affairs, 

Gevo, Inc. 

Background 

The Clean Air Act Amendments (CAAA) of 1970, 1977, and 1990 provided a number of regulatory tools to the EPA to reduce air pollution across the U.S. These tools 

can be divided into two types of approaches: ambient air quality standards and technology standards. Each approach attempts to address difficulties in attaining air 

quality improvements in a variety of ways, utilizing regulatory mechanisms to focus 

on stationary and mobile sources, pollution that travels across state lines, and technology limitations. 

National Ambient Air Quality Standards 

The regulatory scheme established by the CAAA of 1970 was based primarily on 

the concept of nationwide air quality goals and the development of individual State 

plans to meet those goals. EPA has identified six ‘‘criteria pollutants’’ for National 

Ambient Air Quality Standards (NAAQS): sulfur dioxide (SO2), particulate matter 
4 

1 For the first time, during the 1997 revision of the PM NAAQS, EPA established separate 

standards for fine particulate matter (smaller than 2.5 micrometers or PM2) and coarse particulate matter (smaller than 10 micrometers or PM2). 

(PM), 1 nitrogen oxides (NO2), carbon monoxide (CO), ozone (O2), and lead (Pb). For 

each of these pollutants, EPA has set a primary standard at a level designed to protect the public health within an ‘‘adequate margin of safety.’’ In addition, the statute 

allows EPA to set a secondary NAAQS to protect public welfare. At this point, EPA 

has not set secondary standards at different levels than the primary standards. 

The standards themselves are not directly enforceable. Rather, NAAQS establish 

ceilings for concentrations of criteria pollutants in ambient air. States are required 

to develop their own State Implementation Plans (SIPs) that outline source-specific 

emission limitations (either stationary or mobile sources) in which the NAAQS will 

be ‘‘attained’’ or ‘‘maintained.’’ SIPs must be approved by EPA. If EPA determines 

that a SIP will not be able to attain or maintain the NAAQS concentrations, EPA 

can require States to abide by a Federal Implementation Plan (FIP) until such time 

that the State develops an approved SIP. 

Mobile Source Controls in the Clean Air Act 

Title I of the CAAA directs the EPA to set NAAQS and standards for other harmful air pollutants and focuses on reducing pollution from stationary sources such as 

coal-fired power plants, refineries, and factories. However, emissions reductions 

from these sources are typically not sufficient for States to achieve the goals laid 

out in their SIPs, so additional tools are needed. Title II of the CAAA provides a 

framework for achieving further emissions reductions through regulation of mobile 

sources. Although separate titles, changes to Title I automatically impact implementation of Title II, and vice versa. For example, if EPA sets a NAAQS at a more stringent level using the authority laid out in Title I, the tightened requirements apply 

to mobile sources under Title II. 

Mobile Source regulation under the Clean Air Act targets engines and the fuel 

used to power those engines. The Clean Air Act outlines categories of engines: on 

road, those used in the Nation’s light duty and heavy duty vehicle fleet, and off 

road, those engines used in locomotives, aircraft, recreational vehicles such as boats 

and jet skis, as well as construction and farm equipment, lawnmowers, and 

chainsaws. On the fuel side of the equation, the Act provides for the regulation of 

not only tailpipe emissions but also evaporative emissions from motor fuels. 

California Waiver 

Unique in Title II of the CAA is what is often referred to as the California waiver, 

Section 209(b), which provides that the Administrator may waive the prohibition 

against a State adopting or enforcing any standard relating to the control of emissions from new motor vehicles or new motor vehicle engines as long as the State 

standards are at least as protective of public health and welfare as the applicable 

federal standard. In practice, this permitted California to continue to adopt more 

stringent standards than the rest of the country. Given the State’s economic size 

and market share, California regulations tend to influence national standards. For 

example, CAF ́ E standards negotiated in 2009 included EPA, the Department of 

Transportation, California regulators, and the auto industry. 

Tailpipe Emissions 

The 1990 CAAA expanded EPA’s authority so as to require reductions of emissions previously ignored, including evaporative and refueling emissions, cold temperature emissions and air toxics. The amendments outlined new tailpipe emissions 

standards for light duty cars and trucks (Tier I) and authorized EPA to set more 

stringent standards down the road (Tier II). Tier II standards phased in beginning 

with the model year 2004, and attempted to be fuel neutral. Tier II targeted the 

refining process as well, requiring refiners to reduce the sulfur content in gasoline 

to 30 parts per million (ppm). This requirement was necessitated by States needing 

to meet more stringent revised ozone and particulate matter (PM) standards. 

Fuel Specifications 

Section 211(f) of the CAA prohibits the introduction of a new fuel into commerce 

unless that fuel is certified to be ‘‘substantially similar’’ to an existing fuel on the 

market. Under the Act, EPA may waive the prohibition if the manufacturer of the 
5 

fuel proves the new fuel or fuel additive (or concentration thereof) will not cause 

or contribute to a vehicle’s failure to meet existing emissions standards. 

In the 1990 amendments, Congress sought to address the problem summertime 

ozone increases, by creating the Reformulated Gasoline (RFG) Program. The RFG 

Program required that gasoline sold in certain areas (starting with the nine largest 

metropolitan areas with the most severe summertime ozone levels and other nonattainment areas that opt into the program) be reformulated to reduce emissions 

of toxics and ozone precursors including volatile organic compounds (VOCs). VOCs 

are released in part due to the evaporative nature of gasoline. In order to make gasoline cleaner burning, the Act, as part of the RFG program, specified that RFG include two percent by weight oxygen content. The oxygenate requirement was initially met by adding the fuel additive MTBE to gasoline, as ethanol when used as 

an oxygenate introduced additional volatility, thereby increasing evaporative emissions. The Energy Policy Act of 2005, however, eliminated the oxygenate requirement for the RFG program as the Renewable Fuel Standard (RFS) became the primary driver of gasoline content requirements. 

The standard approach used to measure gasoline volatility is in pounds per 

square inch (psi) of Reid Vapor Pressure (RVP). The higher the RVP, the higher the 

fuel’s volatility or tendency to evaporate. The gasoline standard ranges from 7.0 psi 

to 9.0 psi for the summer months. Since as mentioned above, ethanol, increases the 

volatility of gasoline, EPA provided a 1.0 psi (one-pound waiver) for gasoline containing 10 percent ethanol. 

Boutique Fuels 

Under Section 211(c), the EPA has approved requests for some States to adopt 

fuel standards that are more stringent than those required under EPA’s RFG program. These fuels, often called boutique fuels, are produced for a specific geographic 

area in order to help States achieve their NAAQS compliance. Boutique fuels produced for one area may not satisfy requirements in another area. The Energy Policy 

Act of 2005 sought to address the proliferation of boutique fuels by limiting their 

number. 

The Renewable Fuel Standard 

The Energy Policy Act of 2005 (EPAct05) established in law a renewable fuel 

standard (RFS). It required that four billion gallons of renewable fuel be used in 

the national fuel mix by 2006, rising to 7.5 billion gallons by 2012. The Energy Independence and Security Act of 2007 (EISA) greatly expanded the RFS (RFS2). EISA 

increased the volume of renewable fuel to be used in the U.S. to 36 billion gallons 

by 2022. Furthermore, in order to promote the use of advanced biofuels, the amount 

of corn-based ethanol to be used in meeting the RFS2 was capped at 15 billion gallons. In 2010, the United States consumed approximately 13.2 billion gallons of 

corn-based ethanol. RFS2 created four categories of biofuels: 

• Total renewable fuels is the loosest definition, with the only requirement that 

the biofuel have a lifecycle greenhouse gas (GHG) emission profile that is 20% 

below the estimated lifecycle GHG emission profile of traditional gasoline. Cornbased ethanol qualifies in this category. 

• Advanced biofuels must reduce lifecycle GHG emissions by 50% compared with 

traditional gasoline. Corn-based ethanol does not qualify for this category, but 

ethanol derived from sugarcane (Brazilian ethanol) does. 

• Cellulosic and agricultural waste-based biofuels must reduced lifecycle GHG 

emissions by 60% compared with traditional gasoline. These renewable fuels 

must be derived from cellulose. 

• Biomass-based biodiesel must reduce lifecycle GHG emissions by 50% compared 

with traditional diesel fuel. Qualifying fuels are any diesel made from biomass 

feedstocks. 

RFS2 nests the requirements for the advanced biofuels. For example, in 2022, the 

RFS mandates the use of 36 billion gallons of biofuel (Table 1). However, only 15 

billion can be from corn-based ethanol. The remaining 21 billion must come from 

advanced biofuels. Of the 21 billion, 16 billion must come from cellulosic, at least 

one billion from biodiesel, and four billion of unspecified other advanced biofuels. 

EPA has the authority to reduce or waive the RFS requirements, in whole or in 

part, based on the availability of domestic supply. For example, in February 2010, 

EPA waived the 2010 cellulosic requirement of 100 million gallons to 6.5 million gallons, and in November 2010, EPA waived the 250 million gallon cellulosic requirement for 2011 to 6.6 million gallons. Even if the adjusted volume of cellulosic biofuel 
6 

is not actually produced, the obligated parties (including refiners) are still required 

to buy credits to satisfy the adjusted amount. 
7 
8 

5 For more background information on E15, see the Subcommittee’s July 7 hearing, ‘‘Hitting 

the Ethanol Blend Wall: Examining the Science on E15,’’ http://science.house.gov/hearing/energy-and-environment-hearing-science-e15. 6 Baker & O’Brien, Inc., ‘‘Potential Supply and Cost Impacts of Lower Sulfur, Lower RVP 

Gasoline,’’ July 2011, http://www.api.org/Newsroom/upload/ 

110715¥LowerSulfer¥LowerRVP¥Final.pdf. 7 Curt Barry, ‘‘Vehicle GHG Controls Drive EPA Plan for Strict PM Limit, Worrying Industry,’’ Inside EPA, July 22, 2011. 8 These efforts include California’s Low Carbon Fuel Standard Program (http:// 

www.arb.ca.gov/fuels/lcfs/lcfs.htm), the Northeast States for Coordinated Air Use Management’s (NESCAUM) proposed Clean Fuel Standard (http://www.nescaum.org/topics/cleanfuels-standard), and President Obama’s proposed National Low Carbon Fuel Standard (http:// 

my.barackobama.com/page/content/newenergy¥more). 

Unintended Consequences and Potential Conflicts 

E15 

As a result of approaching the ethanol ‘‘blend wall’’ of 10 percent (E10) and the 

increasing volumes required by the RFS, EPA, prompted by an application by 

Growth Energy in March of 2009, has recently permitted the use of intermediate 

ethanol blends (up to E15) in some vehicles. 5 Despite technical concerns involving 

emissions, reliability, infrastructure, and liability being raised by a diverse coalition 

of stakeholders, in October 2010 and January 2011, EPA partially approved waivers 

for the use of E15 in model year 2001 and newer light-duty motor vehicles. In approving the waiver, EPA was required by Section 211(f) of the CAAA to determine 

first that E15 would ‘‘not cause or contribute to a failure of any emission control 

device or system.’’ In making the determination, the Administrator relied almost exclusively on a set of tests conducted by the Department of Energy in 2009 and 2010. 

In June, EPA mandated a new label to be placed on service station fuel pumps 

when stations choose to sell E15 to ‘‘help reduce the potential for vehicles, engines, 

and equipment not covered by the partial waiver decisions to be misfueled with 

E15.’’ 

Tier 3 

EPA has signaled its intentions to move forward later this year with so-called 

‘‘Tier 3’’ standards for light-vehicle emissions and fuels. This forthcoming action, 

which would strengthen limits on gasoline vapor pressure and sulfur content even 

further than the current Tier 2 standard, is prompted by the expanded use of renewable fuels under the RFS and the likely expansion of ethanol consumption resulting from the approval of E15. There are several elements of note to this Tier 

3 rulemaking: 

• Section 211(v) of the CAA requires EPA to first conduct and complete an ‘‘antibacksliding’’ study to determine if the RFS will ‘‘adversely impact air quality.’’ 

The study was required to be completed 18 months after enactment of the 2007 

EISA legislation, but it remains unfinished. 

• An analysis conducted earlier this year suggests that Tier 3 standards would 

result in negative economic outcomes, including the closure of up to seven refineries and gasoline price increases of up to 25 cents per gallon, as well as increased energy use and greenhouse gas emissions in order to comply. 6

• As a result of the predicted shift by automakers toward direct fuel-injection systems in order to comply with EPA greenhouse gas emissions standards, EPA’s 

Tier 3 rulemaking appears poised to tighten vehicle emissions standards as 

well, including a first-ever particulate matter emission standard for all lightduty vehicles. 7

• EPA is considering, as part of the Tier 3 proposal, changing the Agency’s certification fuel from E0 (pure gasoline without biofuel additives) to E15 (15 percent 

ethanol blend). A change in this certification fuel, which is the test gasoline that 

EPA and automakers use to certify that engines meet emissions standards, 

could generate significant problems for automobile and engine manufacturers, 

refiners, and advanced biofuels. 

Low-Carbon Fuel Standard 

Furthermore, proposed and enacted low-carbon fuel standards at the federal, 

State, and regional levels create additional regulatory tension and uncertainty in 

the marketplace. 8 As the Congressional Research Service suggested in a 2008 re-
9 

9 Brent Yacobucci, ‘‘A Low Carbon Fuel Standard: State and Federal Legislation and Regulations,’’ CRS Report 7-9662, December 23, 2008. 10 See: IHS, ‘‘Assessment of the NESCAUM Economic Analysis of a Clean Transportation 

Fuels Program for the Northeast/Mid-Atlantic Region,’’ October 22, 2011; Barr Engineering 

Company, ‘‘Low Carbon Fuel Standard ‘Crude Shuffle’ Greenhouse Gas Impacts Analysis,’’ June 

2010, http://www.npra.org/files/Crude¥Shuffle¥Report¥0616101.pdf; Michael Canes and edward Murphy, ‘‘Economics of a Low Carbon Fuel Standard,’’ 2009, http://www.marshall.org/ 

pdf/materials/643.pdf; Charles River Associates, ‘‘Economic and Energy Impacts Resulting from 

a National Low Carbon Fuel Standard,’’ June 2010, http://consumerenergyalliance.org/wp/wpcontent/uploads/2010/06/CRA-LCFS-Final-Report-June-14-2010.pdf. 

port on the subject, ‘‘The establishment of a Low Carbon Fuel Standard—at either 

the State or federal level—would add another major regulatory requirement.’’ 9

Studies have indicated that these new standards could significantly raise prices, reduce energy security, and, in some cases, increase greenhouse gas emissions. 10
10 

Chairman HARRIS. The Subcommittee on Energy and Environment will come to order. Good afternoon. Again, my apologies for 

the panel for the delay. We just got back from a series of votes, but 

the good news is we shouldn’t have any more during the hearing. 

Welcome to today’s hearing entitled, ‘‘Conflicts and Unintended 

Consequences of Motor Fuel Standards.’’ In front of you are packets 

containing the written testimony, biography, and truth in testimony disclosure of today’s witness panel. 

I now recognize myself for five minutes for an opening statement. 

Again, I want to welcome everyone to this afternoon’s hearing on, 

‘‘Conflicts and Unintended Consequences of Motor Fuel Standards.’’ 

I would like to note a couple of things at the outset. First, this 

hearing is not an attack on biofuels. It is about understanding the 

interrelation of the complex web of government fuel mandates and 

the economic and environmental consequences that result from 

those mandates. Second, many of the conflicts highlighted today 

emanate from a single policy passed by Congress back in 2007, a 

law expanding the Renewable Fuel Standard to mandate consumption of 36 billion gallons of biofuels by the year 2022. Collectively, 

these issues make one essential principle abundantly clear: whether through government handouts, as in the case of Solyndra, or 

through heavy-handed fuel mandates, as in the case of the RFS, 

the picking of energy winners and losers by government fiat is an 

exercise in futility destined to fail miserably. 

In the last eight months, this Committee has held numerous 

hearings illustrating EPA’s penchant for pursuing outcome-based 

science. In all the program areas we have examined, the Agency 

continuously fails to do its homework before rushing into a regulatory judgment. Furthermore, much of the science supported and 

used as the basis for new regulations is done behind a veil of secrecy, contravening this Administration’s promise of transparency. 

Consider just a few examples. EPA is undertaking a Tier 3 rulemaking later this year despite not having completed the statutorily 

required, anti-backsliding analysis due in mid-2009. EPA granted 

a waiver to allow 15 percent ethanol in our fuel based on a single 

set of test results that are still not complete and only made public 

the night before the waiver was granted, ignoring several other relevant test programs. And the Inspector General of EPA recently 

found that the Administrator’s endangerment finding on greenhouse gas emissions failed basic peer review requirements. 

EPA’s upcoming Tier 3 rulemaking is a perfect case study in regulatory folly. The three major elements of EPA’s approach are all 

being driven by the excesses of past regulatory decisions including 

the RFS, not by any organic standard emanating from the Clean 

Air Act. 

First, there have been reports that the rule will include the firstever particulate matter standards for vehicle tailpipes as the result 

of automakers increasingly shifting to direct fuel-injection systems, 

itself a trend that is growing in order to comply with EPA’s greenhouse gas emission standards. Second, EPA will also seek to tighten sulfur and volatility limits for fuels to offset increases in air pollutants resulting from EPA’s Renewable Fuels Standard. Finally, 

EPA is also proposing to change its gasoline test fuel from E0 to 
11 

E15 in order to accommodate increasing amounts of ethanol in our 

fuel system. 

The volumes of biofuels mandated by the RFS were the driving 

force behind EPA’s decision to permit mid-level ethanol blends, and 

we are seeing similar engine compatibility, liability, and infrastructure issues with higher blends of biodiesel. A study sponsored by 

the National Renewable Energy Laboratory and released two 

weeks ago raises even more red flags about the deployment of E15. 

It showed significant damage to marine engines, a problem unlikely to be mitigated by EPA’s watered-down misfueling label. 

Similarly, we will also be discussing a recently-released report 

from the National Research Council on the economic and environmental impacts from U.S. biofuel policy. In addition to finding that 

RFS-mandated levels of cellulosic ethanol are unlikely to be met, 

the report also predicted a variety of air, water, and soil quality 

impacts from increased biofuel production. The study also concluded that the RFS is an ineffective policy for greenhouse gas 

emission reductions, one of the key motives behind the expanded 

mandate. 

Regulations and standards that create environmental problems 

that engender these secondary do-over regulations need to be rethought. We need to start thinking about the real objectives these 

standards are attempting to achieve. Is the goal reduced fossil 

fuels, low carbon fuels, low sulfur fuels, or reduced imported fuels? 

What are the real benefits realized with these standards and at 

what cost? Are we creating an environment that encourages job 

growth, or are we adding regulatory burdens that will continue to 

cost more jobs? 

As we have seen with regulatory approaches in the past, government intervention more often than not results in significant unintended consequences for the economy and the environment. Some, 

not all, of those consequences can be avoided with a little forethought and good scientific investigation. I hope the discussion 

today will help illuminate those areas where additional consideration or scientific investigation is warranted and what objectives 

we are truly trying to accomplish with current U.S. fuels policy. 

[The prepared statement of Mr. Harris follows:] 

PREPARED STATEMENT OF REPRESENTATIVE ANDY HARRIS, CHAIRMAN, 

SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

I want to welcome everyone to this afternoon’s hearing on Conflicts and Unintended Consequences of Motor Fuel Standards. 

I’d like to note a couple of things at the outset. First, this hearing is not an attack 

on biofuels. It is about understanding the interrelation of the complex web of government fuel mandates and the economic and environmental consequences that result from them. Second, many of the conflicts highlighted today emanate from a single policy passed by Congress in 2007—a law expanding the Renewable Fuel Standard to mandate consumption of 36 billion gallons of biofuels by 2022. Collectively, 

these issues make one essential principle abundantly clear: whether through government handouts, as in the case of Solyndra, or through heavy-handed fuel mandates, as in the case of the RFS, the picking of energy winners and losers by government fiat is an exercise in futility destined to fail miserably. 

In the last eight months, this Committee has held numerous hearings illustrating 

EPA’s penchant for pursuing outcome-based science. In all the program areas we 

have examined, the Agency continuously fails to do its homework before rushing 

into a regulatory judgment. Furthermore, much of the science supported and used 
12 

as the basis for new regulations is done behind a veil of secrecy, contravening this 

Administration’s promises of transparency. 

Consider just a few examples. EPA is undertaking a Tier 3 rulemaking later this 

year despite not having completed the statutorily required anti-backsliding analysis 

due in mid-2009. EPA granted a waiver to allow 15 percent ethanol in our fuel 

based on a single set of test results that are still not complete—and only made public the night before the waiver was granted—ignoring several other relevant test 

programs. And the Inspector General of EPA recently found that the Administrator’s endangerment finding on greenhouse gas emissions failed basic peer review requirements. 

EPA’s upcoming ‘‘Tier 3’’ rulemaking is a perfect case study in regulatory folly. 

The three major elements of EPA’s approach are all being driven by the excesses 

of past regulatory decisions including the RFS, not by any organic standard emanating from the Clean Air Act. 

First, there have been reports that the rule will include the first-ever particulate 

matter standards for vehicle tailpipes as the result of automakers increasingly shifting to direct fuel-injection systems—itself a trend that is growing in order to comply 

with EPA’s greenhouse gas emission standards. Second, EPA will also seek to tighten sulfur and volatility limits for fuels to offset increases in air pollutants resulting 

from EPA’s Renewable Fuels Standard. Finally, EPA is also proposing to change its 

gasoline test fuel from E0 to E15 in order to accommodate increasing amounts of 

ethanol in our fuel system. 

The volumes of biofuels mandated by the RFS were the driving force behind 

EPA’s decision to permit mid-level ethanol blends, and we are seeing similar engine 

compatibility, liability, and infrastructure issues with higher blends of biodiesel. A 

study sponsored by the National Renewable Energy Laboratory and released two 

weeks ago raises even more red flags about the deployment of E15. It showed significant damage to marine engines, a problem unlikely to be mitigated by EPA’s watered-down misfueling label. 

Similarly, we will also be discussing a recently released report from the National 

Research Council on the economic and environmental impacts from U.S. biofuel policy. In addition to finding that RFS-mandated levels of cellulosic ethanol are unlikely to be met, the report also predicted a variety of air, water, and soil quality 

impacts from increased biofuel production. The study also concluded that the RFS 

is an ineffective policy for greenhouse gas emission reductions, one of the key motives behind the expanded mandate. 

Regulations and standards that create environmental problems that engender 

these secondary, ‘‘do-over’’ regulations need to be rethought. We need to start thinking about the real objectives these standards are attempting to achieve. Is the goal 

reduced fossil fuels, low carbon fuels, low sulfur fuels, or reduced imported fuels? 

What are the real benefits realized with these standards, and at what cost? Are we 

creating an environment that encourages job growth or are we adding regulatory 

burdens that will cost more jobs? 

As we have seen with regulatory approaches in the past, government intervention 

more often than not results in significant unintended consequences for the economy 

and the environment. Some, not all, of these consequences can be avoided with a 

little forethought and good scientific investigation. I hope the discussion today will 

help illuminate those areas where additional consideration is warranted and what 

objectives we are truly trying to accomplish with current U.S. fuels policy. 

Chairman HARRIS. The Chair now recognizes Mr. Miller for five 

minutes for an opening statement. 

Mr. MILLER. Thank you, Mr. Chairman. One of the origins of this 

hearing, it appears, is that the majority needed to cover a variety 

of topics to placate various industries critical of EPA and State environmental measures, including the Federal Renewable Fuel 

Standard (RFS2) the California Low-Carbon Fuel Standard, Tailpipe Emission Standards, Tier 3 Motor and Fuel Standards, Greenhouse Gas Emissions Standards for Oil Refineries,and also the 

EPA’s decision to allow the voluntary sale of E15. What am I leaving out? There is a little bit of this, there is a little bit of that. 

So we have a seven-witness hearing on motor fuel standards. I 

am pleased that the EPA is here at this time to testify, and Ms. 

Oge, at least we will not be talking about you behind your back at 

this hearing. Most of the issues raised today are actually outside 
13 

of our Committee’s jurisdiction, so the hearing is on the science behind the standards. Many of the standards are the result of complicated statutory procedures imposed by Congress, but procedures 

designed to ensure that everyone affected by a regulation will have 

a chance to be heard, and actually industry has insisted on those 

standards so they would have an opportunity to be heard in all of 

those procedures. 

And all the standards we discuss today are intended to protect 

the air we breathe, the water we drink, and to curb our dependence 

on foreign oil. Our economy is largely built on access to cheap 

motor fuels, but there are obvious consequences to our dependence 

on those fuels. Our transportation sector consumes 27 percent of 

the energy used in our country and makes us very vulnerable to 

economic disruption from the interruption of our oil supply from 

some of the most unstable nations in the world. 

And the use of motor fuel produces 1.8 million metric tons of 

greenhouse gases annually, polluting the environment with hazardous contaminants that can cause severe and chronic respiratory 

illnesses. 

The minority’s one witness today, not counting Ms. Oge, will 

point out that regulations spur innovation. For example, the U.S. 

economy has grown by 64 percent since the enactment of the Clean 

Air Act, and the benefits of the Act are 40 times the cost of the 

regulation. Now, the innovation that has resulted from the Act’s requirements has generated 65,000 American jobs. And other industries not invited to testify today support various regulations and 

have already invested greatly in the research and development to 

meet the standards of regulations. 

We will submit written statements for the record from some of 

those uninvited industries. Unfortunately, we will not hear today 

from a parent who has made a panic trip to an emergency room 

with a child suffering from an asthma attack. That should also be 

part of this hearing. 

I yield back the balance of my time. 

[The prepared statement of Mr. Miller follows:] 

PREPARED STATEMENT OF REPRESENTATIVE BRAD MILLER, 

RANKING MEMBER, SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

Thank you, Chairman Harris. 

What are the origins of this hearing? It appears that the majority needed to cover 

a variety of topics to placate various industries critical of EPA and State environmental measures, including the Federal Renewable Fuel Standard (RFS2), the California Low Carbon Fuel Standard, tail pipe emission standards, the Tier 3 Motor 

and Fuel Standards, and greenhouse gas emission standards for oil refiners. Oh, 

also the EPS’s decision to allow the vountary sale of E15. 

What am I leaving out? 

So we have a seven-witness hearing on ‘‘motor fuel standards.’’ Most of the issues 

raised today are actually outside of our Committtee’s jurisdiction, so the hearing 

supposedly is on the science behind the stadards. 

Many of the standards are the result of complicated statutory procedures imposed 

by Congress, but procedures designed to assure that everyone affected by a regulation will have a chance to be heard. And all of the standards are intended to protect 

the air we breathe and the water we drink, and to curb our dependence on foreign 

oil. 

Our economy is largely built on access to cheap motor fuels, but there are obviously consequences of our dependence on those fuels. Our transportation sector consumes 27 percent of the energy used in our country, and makes us very vulnerable 
14 

to economic disruption from the interruption of our oil supply from some of the most 

unstable nations in the world. And the use of motor fuels produces 1.8 million metric tons of greenhouse gases annually, polluting the environment wiht hazardous 

contaminants that can cause severe and chronic respiratory illnesses. 

The minority’s one witness today will point out that regulations spur innovation. 

For example, the U.S. economy has grown by 64 percent since the enactment of the 

Clean Air Act, and the benefits of the Act are 40 times the cost of the regulation. 

The innovation that has resulted from the Act’s requirements has generated 65,000 

American jobs. 

And other industries not invited to testify today support various regulations and 

have already invested greatly in the research and development to meet the standards. We will submit written statements for the record from those uninvited industries. 

Unfortunately, we won’t hear today from a parent who has made a panicked trip 

to the emergency room with a child suffering from an asthma attack. That should 

be part of this hearing, too. 

Chairman HARRIS. Thank you very much, Mr. Miller. If there are 

Members who wish to submit additional opening statements, your 

statements will be added to the record at this point. 

At this time, I would like to introduce our witness panel. Our 

first witness is Mr. Brendan Williams, Senior Director of Advocacy 

for the National Petrochemical and Refiners’ Association. Before 

joining NPRA, Mr. Williams spent over seven and one-half years on 

Capitol Hill specializing in energy and environment policy. 

The next witness is Dr. Ingrid Burke, Director of the Haub 

School and Ruckelshaus Institute of Environment and Natural Resources at the University of Wyoming and Co-Chair of the National 

Research Council Committee on Economic and Environmental Impacts of Increasing Biofuels Production. Dr. Burke has served as a 

member of several national research council committees to review 

national environmental research programs and policies. 

Next we have Ms. Margo Oge, the Director of the Office of Transportation and Air Quality at the EPA, where she has worked since 

1980. 

Our fourth witness is Dr. Jay Kesan, Professor and H. Ross and 

Helen Workman Research Scholar and Program Leader of the 

Biofuel Law and Regulation Program at the Energy Biosciences Institute at the University of Illinois College of Law. His work focuses on patent law, intellectual property, entrepreneurship, Internet law and regulation, digital government, agricultural biotechnology law, and biofuels regulation. 

Next witness is Mr. Bob Greco, the Group Director for Downstream and Industry Operations at the American Petroleum Institute. Prior to his 21-year career at API, Mr. Greco was an Environmental Engineer with EPA with expertise in automotive emission 

control technologies. 

Next we have Mr. David Hilbert, a Thermodynamic Development 

Engineer for Mercury Marine. His main responsibilities include engine performance and emissions hardware development and base 

engine calibration mapping. He conducted the recently-released 

National Renewable Energy Lab report on high ethanol fuel endurance. 

Our final witness is Mr. Jack Huttner, the Executive Vice President for Commercial and Public Affairs at Gevo, Incorporated. Is 

that the way it is pronounced? 

Mr. HUTTNER. Gevo. 
15 

Chairman HARRIS. Gevo. Gevo, Incorporated. Prior to joining 

Gevo, he was Vice President of Commercial and Public Affairs at 

Dupont Dansico Cellulosic Ethanol, and he was Vice President of 

Business Development at Genencor, the industrial biotechnology division of Dansico A/S. 

Thank you all for appearing before the Subcommittee today, and, 

again, thank you for your patience while we were voting. As our 

witnesses should know, spoken testimony is limited to five minutes 

each, after which the Members of the Committee will have five 

minutes each to ask questions. 

I now recognize our first witness, Mr. Brendan Williams of the 

National Petrochemical and Refiners’ Association. Mr. Williams. 

STATEMENT OF MR. BRENDAN WILLIAMS, 

SENIOR DIRECTOR OF ADVOCACY, 

NATIONAL PETROCHEMICAL AND REFINERS’ ASSOCIATION 

Mr. WILLIAMS. Thank you, Mr. Chairman. Good afternoon, Chairman Harris, Ranking Member Miller, and Members of the Subcommittee. I am Brendan Williams, Senior Director of Advocacy for 

NPRA, the National Petrochemical and Refiners’ Association. I 

thank you for giving me the opportunity to testify today. 

NPRA is a trade association representing high-tech American 

manufacturers of virtually the entire supply of gasoline, diesel fuel, 

jet fuel, other fuels, and home heating oil, along with petrochemicals used as building blocks for thousands of products. We favor 

sound and sensible environmental regulations. We are strongly 

committed to clean air and water. We have an outstanding record 

of compliance with regulations issued by the Environmental Protection Agency and other agencies, and we have invested hundreds of 

billions of dollars to dramatically reduce emissions. 

We have helped make America’s air cleaner today than it has 

been in generations. Refiners have cut sulfur levels in gasoline and 

diesel fuel by about 90 percent, and we have reduced benzene in 

conventional gasoline by 45 percent in recent years. 

EPA data shows that total emissions of the six principle pollutants in the United States have dropped by 57 percent since 1980. 

Ozone levels have decreased by 30 percent. EPA data indicates 

there will be continued reductions in the years ahead under existing regulations. 

Despite this great progress, we are concerned that EPA and 

other agencies have moved away from sensible regulation towards 

an environment characterized by overregulation. This makes unreasonable and often conflicting demands on our members to make 

changes in manufacturing processes that carry an extremely high 

cost and bring little or no environmental benefit. 

Overregulation raises energy costs for every consumer. It 

strengthens foreign competitors eager to replace American manufacturers and American workers. It weakens U.S. economy, and it 

makes America more reliant on unstable parts of the world for 

vital fuels and petrochemicals. 

A Department of Energy report concluded that the burden of federal regulations was a significant factor in the closure of 66 refineries in the past 20 years. Just since 2008, the recession, our refin-
16 

ery closures have led to 3,000 lost jobs in American refineries, a 

handful of refineries are also threatened with closure over the next 

year if they can’t be sold. 

We have seen too many American manufacturing industries go 

overseas in recent decades, which led to millions of lost jobs, and 

we don’t want the same thing to happen if overregulation forces the 

U.S. refining industry to move overseas. 

American manufacturers of transportation fuel are being hit with 

a blizzard of regulations. Some of these involve what are called 

Tier 3 regulations to reduce sulfur in gasoline. Others deal with 

mandate under the Renewable Fuel Standard involving ethanol 

and other biofuels, and others involve greenhouse gas regulations. 

These measures pose challenges individually; however, their impact 

is exacerbated because many individual regulatory demands are 

simply impossible to meet without coming into conflict with other 

regulations. 

One example deals with potential Tier 3 requirements and EPA’s 

greenhouse gas standards. Additional sulfur controls for the fuel 

supply called for in Tier 3 will require more energy-intensive processes which will actually increase greenhouse gas emissions at refineries. 

A similar example of conflicting regulations can be found in relation to the Renewable Fuel Standard. The National Research Council said increased ethanol required under the standard could increase ozone and particulate matter and other emissions, but the 

Renewable Fuel Standard also requires an amount of ethanol that 

cannot be realistically introduced into the fuel supply given current 

infrastructure and consumer demand. Such conflicts are costly and 

difficult to address. 

Unfortunately, the size, scope, and cumulative burden of current 

and impending regulatory activity is hurting the ability of refiners 

to preserve existing jobs and create new ones. Overregulation is 

also adversely impacting our ability to serve the American people 

with domestically produced, reliable transportation fuels. 

We believe America’s national interest would best be served by 

a comprehensive and objective cost-benefit analysis of new and existing federal regulations. It is time for higher consumer costs, lost 

jobs, and damage to America’s economic and national security to be 

considered as relevant factors in determining whether even more 

stringent regulations will do more harm than good. 

Thank you again for the opportunity to be here, and I will be 

happy to take any questions at the appropriate time. 

[The prepared statement of Mr. Williams follows:] 

PREPARED STATEMENT OF MR. BRENDAN WILLIAMS, 

SENIOR DIRECTOR OF ADVOCACY, 

NATIONAL PETROCHEMICAL AND REFINERS’ ASSOCIATION

Introduction 

Chairman Harris, Ranking Member Miller and Members of the Subcommittee, 

thank you for giving me the opportunity to testify at today’s hearing dealing with 

conflicts and unintended consequences of motor fuel standards. I’m Brendan Williams, and I serve as the Senior Director of Advocacy of NPRA, the National Petrochemical & Refiners Association. Since virtually every American drives or travels 
17 

in vehicles powered by motor fuels manufactured by NPRA members, the topic of 

this hearing directly affects just about everyone in our Nation. 

NPRA is a trade association representing high-tech American manufacturers of 

virtually the entire U.S. supply of gasoline, diesel, jet fuel, other fuels and home 

heating oil, as well as the petrochemicals used as building blocks for thousands of 

vital products in daily life. NPRA members make modern life possible and keep 

America moving and growing as they meet the needs of our Nation and local communities, strengthen economic and national security, and provide jobs directly and 

indirectly for more than two million Americans. 

For well over 100 years, our refining members have been serving the American 

people by manufacturing the most efficient form of safe, proven, and reliable motor 

fuels. NPRA members have done this while making tremendous strides to improve 

the environment, strengthen America’s economy, and provide good-paying jobs for 

American workers—many of them union members. 

There is a very close connection between federal energy and environmental policies. Unfortunately, these policies are often debated and decided separately and 

without coordination. As a result, positive impacts for one policy area sometimes 

conflict with or even undermine goals and objectives in the other. Congress and the 

Administration can advance both the cause of cleaner fuels and preserve the domestic refining industry and the jobs it supports by adopting this principle of balance 

as part of our Nation’s energy and environmental policies. 

A healthy and diverse U.S. refining industry serves the Nation’s interest by maintaining a secure supply of energy products. Rationalizing and balancing our Nation’s 

energy and environmental policies will protect this key American resource. Given 

the challenges of the current and future refining environment, America is fortunate 

to retain a refining industry with many diverse and specialized participants. Refining is a tough business, but the continuing diversity and commitment to performance within the industry demonstrate that it has the vitality needed to continue its 

important work, especially with the help of a supply-oriented national energy policy. 

We support sound and sensible environmental and other regulations. Our members are strongly committed to clean air and water, have an outstanding record of 

compliance with Environmental Protection Agency and other regulations, and have 

invested hundreds of billions of dollars to dramatically reduce emissions as measured by EPA. 

As a result of these emissions reductions by our members and by other industries, 

America’s air today is cleaner than it has been in generations. Refiners have cut 

sulfur levels in gasoline by 90 percent just since 2004. We have also reduced sulfur 

in diesel fuel by more than 90 percent since 2005 and reduced benzene in conventional gasoline by 45 percent since 2010. EPA data shows that total emissions of 

the six principal air pollutants in the United States have dropped by 57 percent 

since 1980, and ozone levels have decreased by 30 percent. These reductions occurred even as industrial output and the number of vehicles on the road have increased. EPA data indicates there will be continued reductions in the years ahead 

under regulations already in place. 

Refiners have spent nearly $50 billion just to remove sulfur from gasoline and diesel fuel and to manufacture reformulated gasoline. NPRA members have additionally addressed requirements for low Reid Vapor Pressure gasoline, including specially blended fuels required by State Implementation Plans under the Clean Air 

Act (CAA), which have reduced hydrocarbon emissions, an ozone precursor. 

Despite the great progress we have made in environmental stewardship under the 

CAA and other laws, we are concerned that EPA and other agencies have at times 

moved from regulation to overregulation, making unreasonable and often conflicting 

demands on our members to spend enormous sums to make changes in their manufacturing processes that bring little or no significant environmental benefit. 

Unintended Consequences 

The demands of environmental overregulation—some of which are impossible to 

achieve without coming in conflict with other regulations—would raise energy costs 

for every American consumer. They would also strengthen foreign competitors eager 

to replace American manufacturers and American workers, weaken the U.S. economy, make America more reliant on nations in unstable parts of the world for vital 

fuels and petrochemicals, and endanger our national security. 

These are not alarmist statements—they are simple facts about the consequences 

of overregulation. The refining industry has historically been very cyclical and volatile financially. A Department of Energy report issued in March found that refining 

margins have been continuously decreasing over the past four years (Exhibit A). The 

report also concluded that the compounded burden of federal regulations was a sig-
18 

nificant factor in the closure of 66 petroleum refineries in the United States in the 

past 20 years (Exhibit B). Just since 2008, the recession and refinery closures have 

led to 3,000 lost jobs at American refineries. A handful of refineries are threatened 

with closure in the next few months if they cannot be sold. Some of the lost supply 

from shuttered refineries has been made up through capacity expansions at other 

facilities, and overall capacity has still been increasing. However, the rate of new 

capacity coming online is decreasing due to financial pressures and the threat of 

overseas competition—factors that are exacerbated by a domestic environment of 

overregulation. 
19 
20 

(Source: U.S. Department of Energy, Office of Policy and International Affairs, 

Small Refinery Exemption Study—An Investigation Into Disproportionate Economic 

Hardship, P. 28–30, found at: http://www.epa.gov/otaq/fuels/renewablefuels/ 

compliancehelp/small-refinery-exempt-study.pdf.) 

We’ve seen how much of the American textile, steel, auto, appliance, and other 

manufacturing industries have moved to foreign nations in recent decades, with the 

tragic loss of millions of American jobs. We don’t want the same thing to happen 

to our members and their workers if overregulation forces much of the refining industry to move from the United States to other nations as well. At a time of high 

unemployment and a poorly performing national economy, the last thing America 

needs to do is worsen conditions for another important U.S. manufacturing sector. 

The manufacturers of motor fuels are being hit with a regulatory blizzard that 

poses a significant threat to both refinery operations and our Nation. Some of these 

regulations involve what are called Tier 3 regulations to reduce sulfur in gasoline, 

requirements under the Renewable Fuel Standard (RFS) involving ethanol and 

other biofuels, and greenhouse gas (GHG) regulations, to name a few. 

We believe America’s national interest would best be served by comprehensive 

and objective cost-benefit analyses of these and other federal regulations. Existing 

regulations also need to be examined so those that do more harm than good can 

be eliminated. It is not realistic to demand that every last molecule of emissions be 

eliminated—no matter how insignificant, and regardless of the cost in lost jobs, 

harm to consumers, and harm to our Nation. Yet all too often, overregulation of 

motor fuels and environmental overregulation takes this approach. 

Conflicting Regulations 

We understand that different federal and state regulatory agencies have a hard 

time balancing the need for effective regulation with the demands of meeting sometimes conflicting decisions from the courts, positions of public interest groups, and 

even newly enacted laws. However, the size, scope, and cumulative burden of current and impending regulatory activity is creating both significant regulatory uncertainty and a slew of conflicting regulations that will impose significant burdens on 

domestic fuel manufacturers. 

Looking in more detail at the various regulations facing our industry helps illustrate the problem of conflicting regulations. 

A. Tier 3 Gasoline Sulfur Regulations Conflict with GHG Requirements 

Under the CAA, EPA has adopted a series of increasingly stringent rules to reduce the amount of sulfur allowed in gasoline. Since 2004, EPA’s Tier 2 rules have 

reduced sulfur levels in gasoline by 90 percent, from an average of 300 parts per 

million in 2004 to an average of 30 parts per million today. We have seen no evidence that further sulfur reductions to enable future vehicle technologies are needed. 

Nevertheless, EPA is proceeding with what is known as a Tier 3 rulemaking as 

part of its general authority to regulate fuels under the CAA. The rule would impose 

a high-cost, minimal-benefit regulatory requirement on America’s already heavily 

regulated fuel supply. The rule could lead to significant domestic fuel supply reductions, higher petroleum product imports, potentially increased consumer costs, increased refinery emissions, closed U.S. refineries, and reduced energy security. 

A process called hydrotreating is the principal technology used to reduce sulfur 

in petroleum products, including motor fuels such as gasoline and diesel. This and 

other such technologies require energy consumption that results in increased GHG 

emissions and will also increase emission of other criteria pollutants. As a result, 

a regulation requiring a reduction of sulfur in petroleum fuel increases emissions 

that refiners are being told they must reduce under other CAA regulations. 

Although refiners have already slashed sulfur levels in gasoline by 90 percent in 

the past seven years, EPA’s Tier 3 rulemaking could require further reductions in 

sulfur levels in gasoline to an average of 10 parts per million—a 70 percent change 

from today’s already low levels, while also reducing the gasoline volatility. EPA expects to issue a proposed rule by the end of 2011 and a final rule in 2012. There 

is no reason to regulate sulfur levels further. Sulfur emissions from cars are minimal. 

In addition, the Energy Independence and Security Act of 2007 (Section 209) requires EPA to conduct an anti-backsliding study to determine whether mandated renewable fuel volumes will adversely impact air quality. The results of this study are 

critical to assessing whether or not the current RFS will hamper air quality, as well 

as how to mitigate such impacts and whether changes to the petroleum portion of 

the fuel supply are the most cost-effective way to address the issue. 
21 

The anti-backsliding study was due in the summer of 2009. It was to be followed 

up with promulgated regulations to mitigate any potential impacts identified in the 

study by December 2010. Congress clearly required the study as a precursor to potential regulations, which the statute states should occur 18 months later. However, 

EPA has not completed this study, but intends to move forward with the Tier 3 proposal anyway. The agency said it will release the study at the same time it releases 

its proposed Tier 3 regulations. This is contrary to Congressional intent, which 

clearly indicated the anti-backsliding study was to be completed prior to any new 

regulations being promulgated. This was to be a sequential schedule, not a concurrent one. EPA should release the study to assess the feasibility of and proper approach to any additional fuels regulations. 

E15 and the Renewable Fuel Standard 

Another set of EPA regulations of motor fuels that is causing regulatory conflicts 

and problems for refiners and consumers involves the size and scope of the ethanol 

mandate created in the 2007 expansion of the RFS. 

EPA published a decision last November for approval of a partial waiver with conditions that would allow gasoline containing 15 percent ethanol—known as E15— 

to be sold into the marketplace for use in cars and light trucks produced in model 

year 2007 and later. EPA later ruled that E15 could be sold for use in vehicles produced in model year 2001 and later. In addition to being illegal, these decisions hold 

the potential to create significant problems in the marketplace. 

As NPRA and many other groups argue in a lawsuit, EPA does not have the legal 

authority to grant a partial waiver. Section 211(f)(4) of the CAA is clear on this 

point, stating that EPA has to determine that any fuel or fuel additive ‘‘will not 

cause or contribute to a failure of any emission control device or system (emphasis 

added).’’ The CAA does not give EPA discretion to approve a fuel or fuel additive 

for sale if it will cause or contribute to the failure of some emission control devices 

and not others. 

Because E15 would theoretically be sold under the same canopy as regular gasoline, there is a high likelihood of consumer misfueling. This is a concern because 

several studies show that gasoline blends containing more than 10 percent ethanol 

could lead to engine damage in older vehicles and non-road engines, such as those 

in chain saws, lawnmowers, boats and snowmobiles. For example, a recent study by 

the National Renewable Energy Laboratory on testing conducted on the effects of 

E15 on three outboard boat engines found that E15 caused problems with engine 

performance, increased fuel consumption, and increased nitrogen oxide emissions. 

Ironically, an increased ethanol blend could also damage older cars’ catalytic converters, which are installed to reduce emissions. In addition to engine and catalytic 

converter damage, studies have shown that as ethanol content in fuel increases, it 

burns hotter and is more corrosive. The combined effect of fuel burning hotter and 

the corrosive effects of ethanol create the possibility for serious physical injury to 

people who may misfuel and potential physical damage to vehicle fuel tanks and 

fuel dispensing equipment. Sufficient testing to assess the impact of these fuel 

blends on all automobiles—both old and new—and non-road engines has not been 

completed. 

Industries ranging from outdoor power equipment manufacturers to automakers 

to food producers have all expressed concern over EPA’s E15 waiver. However, EPA 

has ignored ongoing testing related to E15 and made a premature decision to approve the fuel. The same decision to approve E15 also contains a proposal for E15 

misfueling mitigation. Therefore, EPA made a decision knowing that it would cause 

problems and initiated a rulemaking at the same time to mitigate the problems that 

the EPA itself created. 

EPA could have decided to deny the request to approve E15 as gasoline, but chose 

to approve it partially and conditionally. This decision has put refiners and consumers at significant risk and the E15 misfueling mitigation rule—a cautionary 

label posted at service stations—is a woefully ineffective warning device. 

The American people are the losers in this situation because EPA has violated 

President Obama’s 2009 commitment to them to put science ahead of politics. Consumers rely upon their government to ensure that the products offered are safe for 

the intended use. EPA’s partial waivers for E15 ignore this responsibility. American 

families, farmers, truckers, and businesses rely on NPRA members millions of times 

every day to provide affordable, reliable, and safe fuels for use in their gasoline-powered on-road and non-road engines. EPA’s partial waiver decisions undermine this 

reliance. 
22 

EPA is rushing to bring E15 to the marketplace and putting consumers at risk. 

Congress should not allow EPA to continue down this path. Congress should repeal 

EPA’s partial waivers for E15. 

This problem with EPA’s E15 decisions is just one example of the numerous problems associated with an ill-crafted federal RFS. The existing program contains an 

extremely aggressive schedule for introducing a large amount of ethanol into the 

marketplace. Such an implementation schedule raises questions of feasibility, liability, and other economic costs for both refiners and consumers. If the existing RFS 

program is carried out without changes, it will create great market and economic 

uncertainty, which will in turn threaten additional refining investment and job 

growth and harm consumers. 

The RFS is challenging and faces several hurdles. Given the aggressive schedule 

of the mandate and the limits of what fuel and vehicle infrastructure can handle, 

our Nation will soon face a practical limit into the amount of ethanol that can be 

pushed into the fuel supply without causing significant consumer disruption. This 

so-called ‘‘blendwall’’ will be reached when nearly all of the gasoline in the country 

contains 10 percent ethanol and there is a portion of E85 (fuel containing 85 percent 

ethanol, 15 percent gasoline) being sold for use in Flex Fuel Vehicles (FFVs). 

However, consumers have been slow to accept E85, and it does not shape up to 

be a viable compliance option for the RFS. For example, E85 has low energy content 

and could be used in cars not designed for the fuel or in small engines. No small 

engines are designed for E85, and only a small fraction of the fleet of cars is designed for the fuel. E85 requires an expensive investment at retail stations because 

of the corrosive nature of ethanol. This issue is yet another in a panoply of problems 

associated with the current structure of the RFS. Congress should address these 

issues to protect American drivers and consumers. 

Conclusion 

NPRA members want a clean environment and have worked hard and invested 

heavily to achieve that goal. We have made big reductions in emissions, and more 

reductions will continue under existing regulations. But we want sound science and 

cost-benefit analyses to be used to examine which environmental regulations are in 

the best interests of the American people, looking at a broad range of criteria. 

Even when excessive regulations are imposed with the best of intentions, they can 

have harmful unintended consequences. Sometimes these harmful consequences— 

like a rise in consumer energy costs—are welcomed by opponents of fossil fuels, because these higher costs tilt the playing field to make other energy sources more 

competitive in the marketplace. 

EPA should not have unchecked power to take any action it wants—without specific authorization by Congress—in the single-minded pursuit of unrealistic and 

harmful overregulation. It’s time for higher consumer costs, lost jobs, and damage 

to America’s economic and national security to be considered as relevant factors in 

weighing whether ever-more-stringent regulations do more harm than good. 

NPRA is ready to participate in an intellectually honest dialogue about how to 

build a stronger economy, a brighter energy future, and a more prosperous America. 

Chairman HALL [Presiding]. Thank you, and I now recognize our 

second witness, Dr. Ingrid Burke, from the University of Wyoming. 

STATEMENT OF DR. INGRID BURKE, 

DIRECTOR, HAUB SCHOOL AND RUCKELSHAUS INSTITUTE OF 

ENVIRONMENT AND NATURAL RESOURCES, 

UNIVERSITY OF WYOMING, 

AND CO–CHAIR, NATIONAL RESEARCH COUNCIL COMMITTEE 

ON ECONOMIC AND ENVIRONMENTAL IMPACTS OF 

INCREASING BIOFUELS PRODUCTION 

Ms. BURKE. Thank you. Good afternoon, Mr. Chairman and 

Members of the Committee. I served as the Co-Chair of the National Research Council Committee that authored the report, ‘‘Renewable Fuel Standard: Potential Economic and Environmental Effects of U.S. Biofuel Policy.’’ This study was mandated by Congress 
23 

in the Energy and Independence and Security Act of 2007 and the 

2008 Farm Bill. 

The study committee was asked to discuss the current and projected environmental harm and benefits of biofuel production as it 

increased in the United States to meet the biofuel consumption 

mandate of the Renewable Fuel Standard or RFS2. Today I will 

present our key findings in three areas: greenhouse gas emissions, 

air quality, and water quality. 

First, we found that if the consumption mandate of 36 billion gallons of biofuels is to be met in 2022, the effect on greenhouse gas 

emissions compared to using an energy equivalent of petroleumbased fuels is uncertain. Many factors influence greenhouse gas 

emissions from biofuel production. They include the type of feedstock, management practices, and the features of the individual 

site. On the whole, the use of crop and forest residues for biofuels 

tends to emit lower amounts of greenhouse gases than the use of 

annual crops such as corn-based ethanol for biofuels. 

If dedicated energy crops such as switchgrass are to be grown to 

meet the consumption mandate for cellulosic biofuels, conversion of 

both cultivated and uncultivated land will most likely be required, 

and this could result in market-mediated land-use changes that 

could result in additional greenhouse gases. 

Although RFS2 imposes restrictions to discourage some types of 

land clearing or land cover change for biofuel production in the 

United States, it cannot prevent land use or land cover changes 

overseas. 

In summary, because net greenhouse gas emissions depend upon 

site-specific management decisions made given the market conditions and available technologies at any given time, the extent to 

which increasing biofuel production in the United States to meet 

RFS2 consumption mandates will result in greenhouse gas emissions compared to using petroleum-based fuels is uncertain. 

Second, I will speak to the report summary of the effects of RFS2 

on air quality. In general, gasoline and ethanol emit similar 

amounts of major pollutants such as particulate matter, nitrogen 

oxides, volatile organic compounds, and ammonia during vehicle 

use. That is from vehicle evaporative and tailpipe emissions. 

However, the amounts of these air pollutants emitted during the 

fuel production are typically higher for corn grain or cellulosic ethanol than for petroleum-based fuels. As such, compared to the full 

life cycle of gasoline, the production and use of biofuels tends to result in higher atmospheric concentrations of volatile organic compounds, nitrous oxides, particulate organic matter, and ammonia 

on a national average, and the effects of this on human health depend greatly on exposure quantity and duration. 

Third and finally, water quality effects of increasing biofuel production also largely depend upon how it is done on feedstock type, 

site-specific factors, management practices used in feedstock production, and in conversion yield. There is evidence that RFS2 and 

the push of biofuels has caused more land to come into corn production. Increases in corn production have contributed to increased 

nutrient loadings to surface waters and to exacerbating eutrophication and hypoxia. 
24 

A recent analysis of data from the National Water Quality Assessment showed increasing concentration and flux of nitrate in the 

Mississippi River. Perennial and short-rotation woody crops for cellulosic feed stocks and use of residues hold promise for improving 

water quality under RFS2 because these crops require lower agricultural—agrichemical inputs than corn, and perennial root systems can be used to decrease nutrient loadings to streams compared to other crop management regimes. Taking the consumption 

mandates for different types of biofuels into account, the effect of 

producing biofuels in the United States adequate to meet RFS2 in 

2022 on water quality is uncertain. 

In summary, the effects of RFS2 on greenhouse gas emissions, on 

air quality, and on water quality, as well as other environmental 

responses, are highly dependent upon what kinds of biomass feed 

stocks are chosen by our producers, the management choices that 

they make, and market-mediated responses in other land use for 

agricultural production in the United States. 

Thank you for the opportunity to testify. I am happy to answer 

any questions the Subcommittee may have. 

[The prepared statement of Dr. Burke follows:] 

PREPARED STATEMENT OF DR. INGRID BURKE, 

DIRECTOR, HAUB SCHOOL AND RUCKELSHAUS INSTITUTE OF

ENVIRONMENT AND NATURAL RESOURCES, UNIVERSITY OF WYOMING, 

AND CO–CHAIR, NATIONAL RESEARCH COUNCIL COMMITTEE ON ECONOMIC

AND ENVIRONMENTAL IMPACTS OF INCREASING BIOFUELS PRODUCTION

Good afternoon, Mr. Chairman and Members of the Committee. My name is Indy 

Burke. I am the Director of the Haub School and Ruckelshaus Institute of Environment and Natural Resources and Wyoming Excellence Chair and Professor at the 

University of Wyoming. I served as the Co– Chair of the Committee on Economic 

and Environmental Effects of Increasing Biofuels Production of the National Research Council (NRC). The Research Council is the operating arm of the National 

Academy of Sciences, National Academy of Engineering, and the Institute of Medicine of the National Academies, chartered by Congress in 1863 to advise the government on matters of science and technology. The report Renewable Fuel Standard: 

Potential Economic and Environmental Effects of U.S. Biofuel Policy is the product 

of an NRC study mandated by Congress in the Energy and Independence and Security Act of 2007 and the 2008 Farm Bill. 

The study committee was asked to discuss the potential environmental harm and 

benefits of biofuel production if it is to be increased in the United States to meet 

the biofuel consumption mandate of the Renewable Fuel Standard 2 (RFS2). The 

study relies on data from literature published up to the time of its preparation, and 

it found that if the consumption mandate of 36 billion gallons of biofuels is to be 

met in 2022, the effect on greenhouse gas emissions compared to using the energyequivalent of petroleum-based fuel is uncertain. Greenhouse gases are emitted into 

the atmosphere or removed from it during different stages of biofuel production— 

for example, carbon dioxide is removed from the air by plants during photosynthesis, but it is also emitted from fermentation and the use of fossil fuels when 

biofuels are produced, as well as from the combustion of biofuels themselves. Many 

factors, including the type of biofuel feedstock and the management practices used 

in growing it, influence greenhouse gas emissions of biofuels. For example, biofuel 

feedstock type and site location affect carbon storage in soil; farmer choices about 

nutrient management practices, also determined by the biofuel feedstock type and 

site location, affect fertilizer input and gaseous losses of nitrous oxide, another 

greenhouse gas, through denitrification. 

Increasing biofuel feedstock production also could cause direct and indirect landuse changes that might alter the greenhouse gas balance. If the expanded biofuel 

feedstock production involves removing perennial vegetation on a piece of land and 

replacing it with an annual commodity crop, then the land-use change would incur 

a one-time greenhouse gas emission from biomass and soil that could be large 

enough to offset greenhouse gas benefits gained by displacing petroleum-based fuels 
25 

with biofuels over subsequent years. Furthermore, such land conversion may disrupt 

any future potential for storing carbon in biomass and soil. In contrast, planting perennial crops in place of annual crops could potentially enhance carbon storage in 

that site. 

In addition to land-use conversion that is directly linked to biofuel feedstock production, indirect land-use change occurs if land used for production of biofuel feedstocks causes new land-use changes elsewhere through market-mediated effects. The 

production of biofuel feedstocks can constrain the supply of commodity crops and 

raise prices. If agricultural growers anywhere in the world respond to the market 

signals (higher commodity prices) by expanding production of the displaced commodity crop, indirect land-use change occurs. This process might lead to conversion 

of noncropland (such as forests or grassland) to cropland. Because agricultural markets are intertwined globally, production of biofuel feedstock in the United States 

is likely to result in land-use and land-cover changes somewhere in the world, which 

could, in turn, result in one-time greenhouse gas emissions from biomass and soil. 

Because greenhouse gases are well mixed in the atmosphere, their effects are global, 

irrespective of where they were emitted. The extent of those biofuel-induced, market-mediated, land-use changes and their net effects on greenhouse gas emissions 

are uncertain. 

Among the different types of biofuel feedstocks, crop and forest residues will likely 

not contribute much greenhouse gas emissions from land-use or land-cover changes 

because they are products of existing agricultural and forestry activities. However, 

adequate residue would have to be left in the field to maintain soil carbon. If dedicated energy crops such as switchgrass and Miscanthus are to be grown to meet the 

consumption mandate for cellulosic biofuels, conversion of uncultivated cropland will 

likely be required, resulting in the displacement of commodity crops and pastures. 

Although RFS2 imposes restrictions to discourage biofuel feedstock producers from 

land-clearing or land-cover change in the United States that would result in net 

greenhouse gas emissions, the policy cannot prevent market-mediated effects in the 

United States or abroad, nor can it control land-use or land-cover changes in other 

countries. In summary, because net greenhouse gas emissions depend on all of these 

issues described above-site, biofuel feedstock, fertilization, irrigation, direct and indirect land-use change, and residue management, the extent to which increasing 

biofuel production in the United States to meet the RFS2 consumption mandate will 

result in savings in greenhouse gas emissions compared to using petroleum-based 

fuels is uncertain. 

As in the case of greenhouse gas emissions, comparison of other air pollutant 

emissions from biofuels and petroleum-based fuels needs to be considered over the 

life cycles of the fuels. Production and use of ethanol results in higher concentrations of such pollutants affecting air quality as volatile organic compounds, nitrous 

oxides, particulate matter, and ammonia than gasoline on a national average. On 

the whole, estimates of emissions of pollutants affecting air quality from using corngrain or cellulosic ethanol and gasoline in vehicles (including tailpipe emissions and 

evaporative emissions from vehicles and filling station) are comparable. However, 

the pollutant amounts emitted during the fuel-production phase (including feedstock 

production and transportation) are typically higher for corn-grain or cellulosic ethanol than for petroleum-based fuels. Unlike greenhouse gases, pollutants affecting 

air quality have local and regional effects on the environment. The potential extent 

to which these pollutants harm human health and well-being depends on whether 

the pollutants are emitted close to highly populated areas or to agricultural areas. 

Other than greenhouse gas emissions, the water quality effects of increasing 

biofuel production also largely depend on feedstock type, site-specific factors such as 

soil and climate, management practices used in feedstock production, land condition 

prior to feedstock production, and conversion yield. There is evidence that RFS2 and 

the push of biofuels has caused more land to come into corn production. Increases 

in corn production have contributed to increasing nutrient loadings to surface water 

and to exacerbating eutrophication and hypoxia. A recent analysis of data from the 

National Water Quality Assessment showed increasing concentration and flux of nitrate in the Mississippi River. Increasing corn production to produce corn-grain ethanol for meeting RFS2 likely will have additional negative environmental effects. 

Perennial and short-rotation woody crops for cellulosic feedstocks hold promise for 

improving water quality under RFS2 because those crops require lower agrichemical 

inputs than corn, and their perennial root systems can be used to decrease nutrient 

loadings to streams compared to other crop management regimes. Harvesting crop 

residues for biofuel would not require much additional nutrient input, but an adequate amount of residues would have to be left in the field to prevent soil erosion. 

Certain sites could withstand about 40 to 50 percent crop-residue removal. Taking 

the consumption mandates for different types of biofuels into account, the effect of 
26 

producing biofuels in the United States adequate to meet the RFS2 in 2022 on 

water quality is uncertain. The effect on water quality will depend on site-specific 

details of the implementation of RFS2, and particularly the balance of feedstocks 

and levels of inputs. 

Consumptive water use is generally higher for biofuel production than for petroleum-based fuel production on an energy-equivalent basis. (The energy content of 

ethanol is about two-thirds of that of an equivalent volume of gasoline.) The range 

of estimates for biofuels (2.9–1,500 gallons per gallon of gasoline equivalent) is much 

wider than that for petroleum-based fuels (1.9–6.6 gallons per gallon of gasoline 

equivalent). The large range of estimates for biofuels can be mostly attributed to absence or presence of irrigation during biomass production. Estimates for consumptive water use in biorefineries that convert biomass to fuels are between 2.9 and 

20 gallons of water per gallon of gasoline equivalent (four gallons of water per gallon of gasoline-equivalent average). Water efficiency at ethanol production facilities 

has been improving, but withdrawals from confined aquifers may still be a problem 

in certain locations. 

The effects of increasing biofuel production on soil and biodiversity can be positive 

or negative depending on feedstock type and management practices used. Thus, the 

effects of achieving RFS2 on those two environmental variables cannot be readily 

quantified or qualified largely because of the uncertainty in the future. 

Thank you for the opportunity to testify. I would be happy to answer any questions the Subcomittee might have. 

Chairman HALL. Thank you. She yields back her time. 

We now recognize our third witness, Margo Oge, from the Environmental Protection Agency. 

STATEMENT OF MS. MARGO OGE, DIRECTOR, 

OFFICE OF TRANSPORTATION AND AIR QUALITY, 

U.S. ENVIRONMENTAL PROTECTION AGENCY 

Ms. OGE. Thank you, Mr. Chairman Hall, Ranking Member Congressman Miller, and the Members of the Subcommittee. I want to 

thank you for giving me the opportunity to appear before you today 

to testify and hopefully clear the record on a number of issues that 

were raised earlier. 

I will begin with a very brief overview of the Renewable Fuel 

Standards Program. The Energy Independence and Security Act established renewable fuel standards for the transportation fuel of 36 

billion gallons by 2022. This includes 16 billion gallons of advanced 

biofuels. 

Each year the law directs EPA to establish annual volume standards that refiners must meet the following year. To do this, we conduct an extensive transparent evaluation of the state of the renewable fuel industry and at the same time we also consult with our 

colleagues at the Department of Energy and Department of Agriculture. 

To give you an example, for 2011, this review resulted in EPA 

lowering the volume for cellulosics to six million gallons, substantially below what the Clean Air Act was requiring, which was 250 

million gallons for 2011. This was due to the limited production capacity of the industry. For 2012, we propose a range of 3.5 to 12.9 

million gallons, and we will finalize the final standards by sometime this fall. 

Let me say a few words, please, about E15 in gasoline. Under the 

Clean Air Act, companies that produce fuels cannot increase the 

concentration of ethanol in gasoline unless the administrator of 

EPA provides a waiver. The law provides for waivers when EPA 

determines that the increased concentration of ethanol will not 
27 

cause or contribute to failure of vehicles or engines to meet emission standards. 

In 2010, we received a waivers request from Growth Energy for 

E15 gasoline. We sought in review in a very transparent way all 

the available evidence, including extensive data developed by the 

Department of Energy, by industry, and other organizations. Based 

on the available information we granted a partial waiver, allowing 

15 percent of ethanol to be used in model years 2001 and in newer 

vehicles but prohibited, and I want to underline prohibiting the use 

for older vehicles and off-road equipment, including marine engines. 

We also placed several conditions on the waivers to reduce the 

potential for misfueling with E15, including labeling pumps dispensing E15, tracking E15 distribution, and requiring retail stations to survey. As a new gasoline, E15 must be registered under 

the Clean Air Act before it is marketed. Today E15 is not registered. Industry has given us a sufficient date for us to evaluate 

it, but we still have not registered E15. 

The last topic that I would like to cover is the development of 

the so-called Tier 3 standards. Let me explain to you what Tier 3 

means. This refers to the potential new standards for clean vehicles 

and fuels to address basically the Nation’s clean air goals. 

As you know, motor vehicles and their fuels are an important 

source of compounds that form air pollution. In 2008, 120 million 

people still lived in counties that exceeded the public health-based 

standards. In many of these areas motor vehicles contribute anywhere from five percent to 45 percent of specific pollutants. 

When EPA established the Public Health Standard for ozone in 

2008, under the previous Administration, the Regulatory Impact 

Analysis for this existing ozone standard included the so-called Tier 

3 standards that we are talking about today, which is cleaner cars 

and cleaner fuel. And the reason for that was to help States and 

localities to meet the clean air goals of the existing ozone acts in 

a cost-effective way. 

Now, as we develop this proposal, we are considering vehicle and 

fuel as an integrated system. You know, this will enable us to optimize fuel and vehicle changes, finding the lowest cost in technical, 

feasible, and emission reductions. As lead in gasoline, we know 

that sulfur in gasoline degrades the performance of catalysts, and 

by doing that we are reducing the ability of catalysts to address 

emissions. 

So lowering the sulfur in gasoline would make emission control 

technology more effective, not just for new vehicles but also for the 

existing fleet, and the end result would be cleaner air. 

Thank you for the opportunity to testify, and I am looking forward to answer any questions that you may have. 

[The prepared statement of Ms. Oge follows:] 

PREPARED STATEMENT OF MS. MARGO OGE, DIRECTOR, 

OFFICE OF TRANSPORTATION AND AIR QUALITY, 

U.S. ENVIRONMENTAL PROTECTION AGENCY

Chairman Harris, Ranking Member Miller, and Members of the Committee, I appreciate the opportunity to appear before you today to testify on various transportation fuel-related programs under the Clean Air Act (CAA), as amended by the Energy Independence and Security Act of 2007 (EISA). As requested, I will discuss 
28 

three different fuels issues: the renewable fuel standards; partial waivers allowing 

the introduction into commerce of gasoline containing up to 15 percent ethanol (E15) 

for use in MY2001 and newer light-duty motor vehicles (which include passenger 

cars, light-duty trucks and medium-duty passenger vehicles), and potential future 

controls on vehicles and fuel quality, known as ‘‘Tier 3’’ standards. 

Renewable Fuel Standards 

On March 26, 2010, the Environmental Protection Agency (EPA) finalized regulations to implement the updated national renewable fuel standard program (RFS) required by Congress under EISA in 2007. These provisions established new year-byyear specific volume standards for the amount of renewable fuel that must be used 

in transportation fuel, with the standards requiring a total of 36 billion gallons by 

2022. This total includes 21 billion gallons of advanced biofuels, composed of 16 billion gallons of cellulosic biofuel, four billion gallons of ‘‘other’’ advanced biofuels, and 

a minimum of one billion gallons of biomass-based diesel. The new requirements 

also include new definitions and criteria for both renewable fuels and the feedstocks 

used to produce them, including new greenhouse gas emission (GHG) thresholds. 

EPA applied the best available science, and conducted extensive analyses to implement these complex and challenging statutory provisions. The regulatory requirements went into effect on July 1, 2010, and apply to domestic and foreign production 

of renewable fuels used in the United States. 

We estimate the RFS program, when fully implemented, would displace about 

13.6 billion gallons of petroleum-based gasoline and diesel fuel, which represents 

about seven percent of expected annual gasoline and diesel consumption in 2022. 

We also estimate that the fully implemented program would decrease oil import expenditures by $41.5 billion dollars, result in additional energy security benefits of 

$2.6 billion, and reduce GHG emissions by an average annualized rate of 138 million metric tons of CO2 equivalent per year. 

EPA supports expanded use of advanced biofuels, especially cellulosic biofuels, 

which must achieve at least a 50% and a 60% reduction, respectively, in lifecycle 

greenhouse gases. As directed, each year EPA publishes the annual volumetric requirements for total, advanced, biomass-based diesel, and cellulosic renewable fuels 

that refiners must meet the following year. As part of this effort, EPA must determine the projected volume of cellulosic biofuel production for the following year and, 

if this is less than the volume specified in the statute, EPA must lower the standard 

accordingly. In developing proposed annual volume standards, we conduct a rigorous 

investigation of the cellulosic industry, including one-on-one discussions with each 

producer to determine their production potential for the following year. EPA also 

consults directly with the Department of Agriculture and the Department of Energy, 

including the Energy Information Administration (EIA) to determine the status of 

production capacity and capabilities of the cellulosic sector. These evaluations are 

based on evolving information about emerging segments of the biofuels industry and 

may result in applicable volumes that are different from those in the statute. We 

propose the annual volume standards through a transparent rulemaking process, allowing for public review and comment, prior to finalizing the standards. This process ensures the most robust determination possible at the time the standards are 

set. 

In 2010 and 2011, as a result of limited production capacity, we found it necessary 

to reduce the cellulosic standard to about 6.5 and 6 million gallons, respectively, 

substantially below the CAA targets of 100 and 250 million gallons for those years. 

For 2012, we proposed a range of 3.5 to 12.9 million gallons. We will finalize the 

volume standards later this fall. Under the statute, if we lower the cellulosic standard, EPA has discretion to reduce the total advanced and total renewable fuel standards. Thus far, we have not found cause to reduce the overall advanced and renewable standards. 

EPA also recognizes the importance of evaluating and qualifying new biofuels for 

use in the RFS program. We already have a long list of qualified advanced and cellulosic biofuels approved in the current RFS, including biodiesel and renewable diesel from certain feedstocks, ethanol from sugarcane, diesel from algal oil, ethanol 

and diesel from approved cellulosic feedstocks, and jet fuel and heating oil from certain feedstocks. In addition, we have established a process to evaluate new biofuel 

pathways for approved use in the RFS program and are using this process to qualify 

new fuel pathways that can support meeting the future standards. Many of the 

feedstocks or biofuels undergoing evaluation are under consideration as new advanced biofuels. These include ethanol, diesel and gasoline produced from renewable 

feedstocks like energy cane, camelina, and arundo donax, to name only a few. 
29 

E15 Waiver 

Under the Clean Air Act, companies that produce fuels cannot increase the concentration of ethanol in gasoline for use in gasoline-fueled vehicles unless the Administrator waives this restriction by determining that the increased concentration 

will not cause or contribute to the failure of vehicles or engines to meet emissions 

standards. E10 (gasoline with 10% ethanol by volume) was granted a waiver by operation of law under a previous version of CAA section 211(f)(4) more than 30 years 

ago. It is now ubiquitous in the marketplace, with E10 blends now accounting for 

over 90 percent of the total U.S. gasoline market. 

In 2010, EPA granted in part and denied in part an application from Growth Energy and 54 ethanol producers requesting a waiver that would increase the permissible concentration of ethanol in gasoline to 15 percent. Based on the available evidence, including extensive test data developed by the Department of Energy (DOE) 

and other researchers, EPA determined that the CAA criterion in section 211(f)(4) 

was met for allowing E15 to be introduced into commerce for use in model year 

(MY) 2001 and newer light-duty motor vehicles, which includes passenger cars, 

light-duty trucks and medium-duty passenger vehicles. EPA also found that E15 did 

not meet the statute’s criterion in the case of motor vehicles older than MY2001 and 

other types of vehicles and gasoline-powered equipment. As a result, EPA granted 

partial waivers raising the permissible concentration of ethanol in gasoline to 15 

percent for use in MY 2001 and newer light-duty motor vehicles, but not for use 

in any other gasoline-powered vehicles or engines such as lawnmowers and boats. 

EPA placed several conditions on the waivers to reduce the potential for 

misfueling with E15. As a result, fuel producers that decide to introduce E15 into 

commerce must take a number of steps designed to reduce misfueling, including labeling pumps dispensing E15, tracking E15 distribution on product transfer documents and conducting retail station surveys. To further mitigate the potential for 

misfueling, EPA also issued regulations that apply more broadly, to fuel marketers 

as well as fuel producers, and that prohibit anyone, including consumers, from 

misfueling with E15. 

As a new gasoline, E15 must be registered under the Clean Air Act before it may 

be introduced into commerce for use in MY2001 and newer light-duty motor vehicles. Earlier this year, ethanol industry representatives submitted emissions and 

health effects information for use in completing registration applications for E15. 

They are now developing additional information for that purpose. Once complete, 

the information will be helpful to fuel producers in submitting registration applications for E15. Until such time as EPA approves a complete registration application, 

E15 may not be lawfully sold for use in MY2001 and newer light-duty motor vehicles. 

Tier 3 

The last topic I will cover is development of what is commonly referred to as the 

‘‘Tier 3’’ vehicle and fuel standards. Emissions from motor vehicles and their fuels 

contribute to ozone, particulate matter (PM), nitrogen dioxide (NO2), and carbon 

monoxide (CO), which are all pollutants for which EPA has established health-based 

National Ambient Air Quality Standards (NAAQS). In 2008, over 120 million people 

lived in counties that exceeded the health-based standards then in effect. 

Motor vehicles are an important source of the compounds that form this air pollution. We project that in many nonattainment areas, cars and light trucks will contribute 15–45% of total nitrogen oxides emissions; 10–25% of total volatile organic 

compound emissions, and 5–10 percent of total emissions of fine particulate matter. 

When a revised health-based standard for ozone was set in 2008, the Regulatory Impact Analysis for the new standard included potential Tier 3 standards as part of 

an overall assessment of measures that would help States meet the ozone standard. 

The Clean Air Act authorizes EPA to establish emissions standards for motor vehicles to address air pollution that may reasonably be anticipated to endanger public health or welfare. EPA also has authority to establish fuel controls where emissions products of gasoline may reasonably be anticipated to endanger public health 

or welfare or where they significantly impair motor vehicle emissions control devices 

or systems. 

In the decade since we set the Tier 2 vehicle and fuel standards, there have been 

advancements in vehicle catalyst technology and computer control technology that 

should enable significant, cost-effective reductions in motor vehicle tailpipe emissions. Tier 3 vehicle and fuel standards have the potential to cost-effectively reduce 

NO2, PM, and VOCs by hundreds of thousands of tons. 
30 

1 USEPA (2011). The Benefits and Costs of the Clean Air Act from 1990 to 2020. Final Report. Prepared by the USEPA Office of Air and Radiation. February 2011. Table 5-5. This study 

is the third in a series of studies originally mandated by Congress in the Clean Air Act Amendments of 1990. It received extensive peer review and input from the Advisory Council on Clean 

Air Compliance Analysis, an independent panel of distinguished economists, scientists, and public health experts. 2 Ibid. 3 Bureau of Economic Analysis, National Economic Accounts, ‘‘Table 1.1.5. Gross Domestic 

Product,’’ http://bea.gov/national/index.htm#gdp. 

As we develop this proposal, we are considering the vehicle and its fuel as an integrated system, which would enable technologically feasible and cost-effective emission reductions beyond what would be possible looking at vehicle and fuel standards 

in isolation. We first applied such an approach with our Tier 2 vehicle/gasoline sulfur standards, finalized in 2000. We believe that a similar approach in the Tier 3 

proposal would be a cost-effective way to achieve substantial additional emissions 

reductions. 

There are extensive data showing that gasoline sulfur degrades the performance 

of catalytic systems that are key to reducing emissions from gasoline vehicles. Lowering the sulfur content of gasoline would make emission control technologies more 

effective for both existing and new vehicles. Gasoline sulfur reductions would be a 

key factor in enabling manufacturers to comply across the vehicle fleet with the new 

standards, while also achieving immediate significant benefits by reducing emissions from the existing vehicles. 

The Agency has been talking to diverse stakeholders as we develop a proposal for 

Tier 3 vehicle and fuel standards that would reduce emissions from passenger cars 

and light-duty trucks. The Alliance of Automobile Manufacturers has urged the 

Agency to harmonize vehicle emissions standards with the State of California’s program, thus allowing manufacturers to design a single vehicle for nationwide sales. 

New Tier 3 vehicle and fuel standards would create a comprehensive program for 

regulating motor vehicles and fuels that would provide regulatory certainty and 

compliance efficiency for auto manufacturers. The Tier 3 proposal will also address 

a number of requests from fuel industry representatives to streamline fuels regulations during the retrospective regulatory review process conducted in response to 

the President’s Executive Order on January 18, 2011. 

The Clean Air Act 

These fuel programs are part of, or would continue, the 40-year Clean Air Act success story. For 40 years, the Clean Air Act has allowed steady progress to be made 

in reducing the threats posed by pollution and allowing us all to breathe easier. In 

the last year alone, programs implemented pursuant to the Clean Air Act Amendments of 1990 are estimated to have reduced premature mortality risks equivalent 

to saving over 160,000 lives; spared Americans more than 100,000 hospital visits; 

and prevented millions of cases of respiratory problems, including bronchitis and 

asthma. 1 They also enhanced productivity by preventing 13 million lost workdays; 

and kept kids healthy and in school, avoiding 3.2 million lost school days due to 

respiratory illness and other diseases caused or exacerbated by air pollution. 2

However, few of the emission control standards that gave us these huge gains in 

public health were uncontroversial at the time they were developed and promulgated. Most major rules have been adopted amidst claims that that they would be 

bad for the economy and bad for employment. 

Some may find it surprising that the Clean Air Act also has been a good economic 

investment for our country. In contrast to doomsday predictions, history has shown, 

again and again, that we can clean up pollution, create jobs, and grow our economy 

all at the same time. Over that same 40 years since the Act was passed, the Gross 

Domestic Product of the United States grew by more than 200 percent. 3

Some would have us believe that ‘‘job-killing’’ describes EPA’s regulations. It is 

misleading to say that enforcement of the Clean Air Act is bad for the economy and 

employment. It isn’t. Families should never have to choose between a job and 

healthy air. They are entitled to both. 

The EPA’s updated public health safeguards under the Clean Air Act will encourage investments in labor-intensive upgrades that can put current unemployed or 

under-employed Americans back to work. Environmental spending creates jobs in 

engineering, manufacturing, construction, materials, operation, and maintenance. 

For example, EPA vehicle emissions standards directly sparked the development 

and application of a huge range of automotive technologies that are now found 

throughout the global automobile market. The vehicle emissions control industry 

employs approximately 65,000 Americans with domestic annual sales of $26 bil-
31 

4 Manufacturers of Emissions Control Technology (http://www.meca.org/cs/root/organization2info/who¥we¥are). 5 DOC International Trade Administration. ‘‘Environmental Technologies Industries: FY2010 

Industry Assessment,’’ http://web.ita.doc.gov/ete/eteinfo.nsf/ 068f3801d047f26e85256883006ffa54/4878b7e2fc08ac6d85256883006c452c/$FILE/ 

Full%20Environmental%20Industries%20Assessment%202010.pdf (accessed February 8, 2011). 6 U.S. Census Bureau, Censtats Database, International Trade Data—NAICS, http:// 

censtats.census.gov/naic3¥6/naics3¥6.shtml (accessed September 6, 2011). 7 Network of Heads of the European Environment Protection Agencies, 2005. ‘‘The Contribution of Good Environmental Regulation to Competitiveness,’’ http://www.eea.europa.eu/aboutus/documents/prague¥statement/prague¥statement-en.pdf (accessed February 8, 2011). 

lion. 4 Likewise, in 2008, the United States’ environmental technologies and services 

industry 1.7 million workers generated approximately $300 billion in revenues and 

led to exports of $44 billion of goods and services, 5 larger than exports of sectors 

such as plastics and rubber products. 6 The size of the world market for environmental goods and services is comparable to the aerospace and pharmaceutical industries and presents important opportunities for U.S. Industry. 7

Conclusion 

Thank you for the opportunity to testify today. 

Chairman HALL. Thank you. The gentlelady yields back her time. 

I now recognize our fourth witness, Dr. Jay Kesan, from the University of Illinois College of Law, for five minutes. 

Mr.MILLER. You need to turn your microphone on. 

STATEMENT OF DR. JAY KESAN, PROFESSOR AND 

H. ROSS AND HELEN WORKMAN RESEARCH SCHOLAR 

AND PROGRAM LEADER 

OF THE BIOFUEL LAW AND REGULATION PROGRAM, 

ENERGY BIOSCIENCES INSTITUTE, 

UNIVERSITY OF ILLINOIS COLLEGE OF LAW 

Mr. KESAN. Okay. Sorry. Good afternoon, Chairman Hall, Ranking Member Miller, and Members of the Committee. Thank you for 

the opportunity to appear before you. 

My name is Jay Kesan. I am a Professor at the University of Illinois and Program Leader of the Biofuel Law and Regulation Program at the Energy Biosciences Institute, which is a joint effort between the University of Illinois, the University of California, 

Berkeley, and the Lawrence Berkeley National Laboratory and 

which has been funded by BP as a multi-year research commitment. 

In 2005, the U.S. Congress passed the Energy Policy Act, which 

charged the EPA with developing and implementing the Renewable 

Fuel Standard Program. This program was significantly altered in 

2007, with the passage of the Energy Independence and Security 

Act, and this expanded program is commonly referred to as RFS2. 

There were three main policy goals that drove the RFS legislation; national energy security, reduction in GHG emissions, and 

economic development, particularly in the rural sector. All three of 

these drivers are definitely still with us today and will continue to 

remain important in the foreseeable future. 

Under the RFS Program gasoline producers and importers, not 

the government and consumers, are responsible for introducing renewable biofuel into the U.S. market. In essence, the policy instrument of the RFS is a mandatory demand regime that requires the 
32 

regulated parties to commercialize more renewable fuel than the 

amount the market would achieve in the absence of the RFS. 

So how does such a large-scale mandatory demand regime like 

the RFS help reduce production costs of renewable biofuel over 

time? This is well understood by conventional economic theory. The 

possibility of large-scale mandatory consumption allows renewable 

biofuel producers and their feedstock suppliers to operate at a large 

scale through economies of scale and/or Marshallian externalities. 

Second, the RFS2 Program induces biofuel producers and their 

feedstock suppliers to invest in R&D activities creating cost-saving 

innovation. 

Our empirical work has shown that ethanol plants in the past 

decade have actually contributed through the RFS to increasing 

economies of scales and to improving the level of competition 

among firms through existing plant expansion as well as expansion 

through new plant construction. 

Finally, uncertainty influences investment decisions regarding 

R&D activity. Hence, removing some degree of the uncertainty by 

creating several years of a mandatory demand regime makes it 

easier for biofuel producers to finance their R&D projects. The uncertainty and risk of an unstable policy have an even bigger impact 

on commercial investments because the costs are so much higher 

compared to R&D. On the other hand, a stable commitment to an 

RFS2 regime reduces that uncertainty and risk associated with 

commercial investments. 

Other regulatory initiatives such as E15 and E85 work in tandem with RFS2 to facilitate innovation and development of the 

biofuel industry. In addition, efforts to clarify regulations by removing some of the uncertainty about the approved level of blending 

for biobutanol is another initiative that works with the RFS2 Program to further expand the development of advanced biofuels such 

as biobutanol. 

We are in an era of heavily constrained government spending. 

Policy initiatives like the RFS do not require government money. 

Rather, RFS facilitates innovation and commercialization of new 

technologies by reducing some uncertainties by providing a guarantee of market demand. 

We are starting to see the RFS program begin to yield tangible 

results on the ground in terms of producing advanced biofuels and 

cellulosic biofuels. For instance, the commercial investments in 

biofuels derived from lignocellulosic biomass are real. There are 

credible players in the industry such as INEOS, Abengoa, POET 

and BP breaking ground on new plants and projects. 

I am an engineer and a lawyer, but my esteemed colleagues at 

the Energy Biosciences Institute, who are world-class experts in 

the plant sciences, tell me that scientific advancements have already solved the problem of obtaining sugar from lignocellulosic 

biomass many times. Therefore, it is only a matter of technological 

effort and time, together with the support of a foundational policy 

like the RFS, before we see large-scale production of advanced 

biofuels. 

There is extensive research showing that learning by doing lowers the production cost of biofuels. This has been shown to be true 

for corn ethanol and sugarcane ethanol. The RFS is a cornerstone 
33 

piece of legislation for the biofuel industry. The RFS mandates will 

accelerate the production of advanced biofuels and lead to more cumulative experience and promote the innovation needed to lower 

production costs in the future. 

We need a broad-based approach to energy policy in the U.S., 

and biofuels will play a significant role in our national energy portfolio. We need important policy mechanisms like the RFS to ensure 

that we have new energy options. A healthy market is one that has 

a broad set of biofuel producers and, more importantly, a diverse 

portfolio of renewable energy options. 

Thank you very much for your attention. I am happy to answer 

any questions that the Members of the Committee may have. 

[The prepared statement of Dr. Kesan follows:] 

PREPARED STATEMENT OF DR. JAY KESAN, PROFESSOR AND

H. ROSS AND HELEN WORKMAN RESEARCH SCHOLAR AND PROGRAM LEADER

OF THE BIOFUEL LAW AND REGULATION PROGRAM, ENERGY BIOSCIENCES INSTITUTE, 

UNIVERSITY OF ILLINOIS COLLEGE OF LAW

Good afternoon, Chairman Harris, Ranking Member Miller, and Members of the 

Committee. Thank you for the opportunity to appear before you. 

Introduction 

My name is Jay Kesan. I am a Professor at the University of Illinois at UrbanaChampaign and the Program Leader of the Biofuel Law and Regulation Program 

at the Energy Biosciences Institute, a joint research effort between the University 

of Illinois, the University of California, Berkeley, and the Department of Energy’s 

Lawrence Berkeley National Laboratory, and funded by BP as a multi-year research 

commitment. 

The Renewable Fuel Standard (RFS) Program 

In 2005, the U.S. Congress passed the Energy Policy Act, which charged the Environmental Protection Agency (EPA) with developing and implementing the Renewable Fuel Standard Program (RFS). The RFS was designed to ensure the introduction and consumption of a certain volume of renewable fuel in the Unites States. 

More specifically, under the RFS Program, obligated parties such as gasoline producers and importers were required to produce or purchase a specific amount of renewable biofuel every year between 2006 and 2012. 

The RFS was significantly altered in December 2007 with the passage of the Energy Independence and Security Act of 2007, and the expanded Program is now commonly known as RFS2. Under the RFS2, the period of volumetric requirements is 

extended through 2022, and renewable fuel is sub-categorized into traditional renewable fuel, advanced biofuel, cellulosic biofuel, and biomass-based diesel based on 

fuels’ feedstocks and the green house gas (GHG) emission reduction thresholds that 

they satisfied. 

There were three main policy goals that drove the RFS legislation—national energy security, reduction in GHG emissions, and economic development, particularly 

in the rural sector. All three of these drivers are definitely still with us today and 

will continue to remain important in the foreseeable future. 

The Economic Rationales for the RFS2 Program 

The RFS program is designed to facilitate the substitution process of domestically 

produced, renewable biofuels for petroleum, and to make renewable fuel economically viable in the future. In order to achieve this main goal, gasoline producers and 

importers are required to commercialize their obligated amount of renewable biofuel 

every year during the period between 2006 and 2022. These parties—not the government and consumers—are responsible for introducing renewable biofuel into the 

U.S. market. In essence, the policy instrument of the RFS is a mandatory demand 

regime that requires gasoline producers and importers to commercialize more renewable biofuel than the amount the market would achieve in the absence of the 

RFS. 
34 

1 J.P. Kesan, A. Ohyama, and H.-S. Yang, ‘‘An Economic Evaluation of the Renewable Fuel 

Standard (RFS) Standard Program: An Industrial Policy Approach,’’ Working Paper, available 

on SSRN, http://www.ssrn.com (2011). 

How does such a large-scale mandatory demand regime like the RFS help reduce 

production costs of renewable biofuel over time? This is well understood, and several 

mechanisms can be found in light of well-established economic theory. First, economies of scale and/or Marshallian externality contribute to improving production cost 

conditions. A possibility of large-scale mandatory consumption allows renewable 

biofuel producers and their feedstock suppliers to operate at a large scale. Then, 

large-scale operation decreases their average cost of production. In particular, when 

the fixed cost of physical capital is very high, this effect is likely to kick in. High 

fixed costs are not limited to physical capital, and they may equally apply to R&D 

expenditures. Thus, large-scale demand raises the profitability from R&D activity, 

and, as a result, promotes technological advancement. Similarly, large-scale mandatory demand improves the infrastructure of the renewable biofuel industry. This externality positively affects the cost conditions of each producer involved in the 

biofuel industry. 

Second, the RFS2 program induces biofuel producers and their feedstock suppliers 

to invest in R&D activities creating cost-saving innovation. The basic logic of this 

relies on the well-established idea of ‘‘market pull’’ or ‘‘cost spreading.’’ In the context of the RFS program, a renewable biofuel producer reaps the benefits of costsaving innovation by embedding them in biofuel technology and then selling biofuel 

as a final product. While his R&D expenditures are a fixed cost, the marginal benefit from such R&D is proportional to biofuel sales. That is, the producer benefits 

more from cost-saving innovation as its sales increase. Thus, the possibility of largescale biofuel sales, brought about by the RFS, gives biofuel producers an extra incentive to invest in the R&D that creates cost-saving innovation. In addition, largescale mandatory consumption provides incentives to new market entrants. Therefore, higher levels of market competition require more cost-saving innovation in 

order to survive. In such cases, technological advancement might not necessarily 

come with a larger scale of production. However, it is surely the case that costs are 

lower with improved production technology. 

Our empirical work analyzing ethanol plants in the past decade indicates that the 

RFS has contributed to increasing economies of scale and to improving the level of 

competition among firms through existing plant expansion as well as expansion 

through new plant construction. 1

Finally, uncertainty influences investment decisions regarding R&D activity. In 

general, returns to R&D investments are quite skewed, and firms may find it difficult to finance R&D expenditures through the capital market. Thus, removing 

some degree of uncertainty by creating several years of a mandatory demand regime 

makes it easier for biofuel producers to finance their R&D projects. Furthermore, 

according to option value theory, firms may postpone R&D projects because of great 

uncertainty even if the net present value of the project is not negative. As mentioned previously, the returns to R&D investments partly depend on demand conditions. Since the mandatory demand of the RFS guarantees a market to biofuel producers, it reduces the degree of uncertainty. This in turn leads to lowering discount 

factors associated with uncertainty of benefits derived from R&D projects. In sum, 

the RFS encourages R&D activity in the industry by easing credit constraints or 

lowering the value of postponing R&D projects. 

The amount of money spent on R&D is lower than the amount of money that 

biofuel producers need to spend to build commercial production facilities, and thus 

the uncertainty and risk of an unstable policy has an even bigger impact on commercial investments because the costs are so much higher. On the other hand, a 

stable commitment to the RFS2 regime reduces that uncertainty and risk associated 

with commercial investments. 

Other regulatory initiatives such as the E15 and E85 programs work in tandem 

with the RFS2 to facilitate innovation and further development of the biofuel industry. In addition, efforts to clarify regulations by removing some of the uncertainty 

about the approved level of blending for biobutanol is another positive initiative that 

can work with the RFS2 Program and further expand the development of advanced 

biofuels such as biobutanol. 

Consider another example from another renewable energy sector—the case of 

wind energy. I have attached a graph to my written statement that shows that investment in wind energy has been stable and growing rapidly in the past decade 

whenever there has been a stable tax policy in place. This once again illustrates the 

importance of a firm and stable policy commitment instead of intermittent policy 

initiatives. 
35 

2 C. Somerville, H. Youngs, C. Taylor, S.C. Davis, and S.P. Long, ‘‘Feedstocks for 

Lignocellulosic Biofuels,’’ Science, vol. 329, pp. 790–792 (13 Aug. 2010); Huang, H., M. Khanna, 

and X. Yang, ‘‘Economic Implications of Energy Crop Production on Conservation Reserve Program (CRP) Land’’ presentation at AFRI Meeting on Prosperity for Small- and Medium-Sized 

Farms and Rural Communities Programs, Miami, Florida, November 7–9, 2011. 

We are in an era of heavily constrained government funding. Policy initiatives like 

the RFS mandates do not require government money. Rather, we are simply facilitating innovation and commercialization of new technologies by reducing some uncertainties by providing a guarantee of market demand. 

It is worth noting that similar regulatory regimes in other arenas designed to advance and facilitate the development and deployment of new technologies have a 

long and successful history. Such examples include automobile airbag technology, 

digital broadcasting, enhanced 911 calling and the like. 

Taking Stock of Where We Are Today and Looking Ahead 

We are starting to see the RFS program begin to yield tangible results on the 

ground in terms of producing advanced biofuels and cellulosic biofuels. For instance, 

the commercial investments in biofuels derived from lignocellulosic biomass are real. 

There are credible players in the industry such as INEOS, Abengoa, POET and BP 

breaking ground on new plants and projects this year and in 2010. 

I am an engineer and a lawyer. But my esteemed colleagues at the Energy Biosciences Institute (EBI), who are world-class experts in the plant sciences, tell me 

that scientific advancements have already solved the problem of obtaining sugars 

from lignocellulosic biomass many, many times. Therefore, it is now only a matter 

of technological effort and time, together with the encouragement and support of a 

foundational policy such as the RFS, before we achieve large-scale production of advanced biofuels. 

Relatedly, the U.S. has a substantial land base beyond that used for row-crop agriculture that can be mobilized to achieve substantial domestic biofuel production 

and meet all the biofuel mandates of EISA/RFS2. 2

There is extensive research showing that ‘‘learning by doing’’ lowers the production cost of biofuels. This has been shown to be true for corn ethanol and sugarcane 

ethanol. The RFS is a cornerstone piece of legislation for the biofuel industry. The 

RFS mandates will accelerate the production of advanced biofuels and lead to more 

cumulative experience and promote the innovation needed to lower production costs 

in the future. 

The National Research Council report on the RFS is not a conclusion on the 

biofuel industry and is, more accurately, a report on a work that is still in progress. 

In fact, the NRC report is based on rather outdated information. For instance, it 

is not based on current biomass production estimates or on current technological information. That said, the NRC report does correctly acknowledge that commercializing advanced and cellulosic biofuel technologies will require policy certainty. 

We need a broad-based approach to energy policy in the U.S. and biofuels will 

play a significant role in our national energy portfolio. We need important policy 

mechanisms such as the RFS to ensure that we have new energy options. A healthy 

market is one that has a broad set of biofuel producers and, more broadly, a diverse 

portfolio of renewable energy options, including solar, wind, natural gas, 

hydroelectricity, and biofuels. 

Thank you very much for your attention. I am happy to answer any questions 

that Members of the Committee may have. 
36 
37 

Chairman HARRIS. Thank you very, very much. 

I now recognize our fifth witness, Mr. Bob Greco of the American 

Petroleum Institute. 

STATEMENT OF MR. BOB GRECO, GROUP DIRECTOR, 

DOWNSTREAM AND INDUSTRY OPERATIONS, 

AMERICAN PETROLEUM INSTITUTE 

Mr. GRECO. Thank you. Good afternoon, Mr. Chairman, Ranking 

Member Miller, and other Committee Members. My name is Bob 

Greco, and I am the Downstream Group Director for the American 

Petroleum Institute, API. Thank you for the opportunity to testify 

on the conflicts and unintended consequences of motor fuels, particularly the Tier 3 requirements now being developed by EPA. 

API represents over 480 member companies involved in all aspects of the oil and natural gas industry, an industry that supplies 

most of America’s energy, supports 9.2 million U.S. jobs and 7.5 

percent of the U.S. economy, and has invested nearly $2 trillion 

dollars in U.S. capital projects since 2000, including those spurring 

advances in nearly every formable form of energy. 

The U.S. refining industry already operates in an extremely com- plex regulatory environment. U.S. refiners have invested $112 billion in environmental improvements between 1990 and 2008, significantly reducing emissions while producing cleaner fuels and improving energy efficiency. 

On top of these existing regulations, U.S. refiners are now facing 

a blizzard of significant and potentially very costly regulations that 

may take effect over the next few years. These regulations include 

more stringent Tier 3 standards; refinery controls including greenhouse gas limitations through the new NESHAP and NSPS requirements; the RFS implementation and the impending blend 

wall; refinery emissions controls to achieve more stringent air quality standards for ozone, particulate matter, and other pollutants; 

and new EPA requirements for boilers and incinerators. 

Today I will focus on the proposed Tier 3 gasoline standards 

being drafted by EPA. 

Under the Clean Air Act, EPA has already implemented stringent rules reducing the amount of sulfur allowed in gasoline and 

reducing vapor pressure. For example, the Tier 2 rules have reduced sulfur levels in gasoline by 90 percent, from an average of 

300 parts per million before 2004 to an average of 30 parts per million today. EPA is now developing a Tier 3 rulemaking that would 

reduce sulfur levels to an average of 10 parts per million, nearly 

a 70 percent change from today’s already low levels, while also reducing gasoline volatility and perhaps other properties. 

EPA expects to issue a proposed rule by the end of this year and 

a final rule in 2012. EPA should not issue a Tier 3 proposal without first justifying the impacts, costs, and benefits of further reducing sulfur and vapor pressure. EPA has not produced a scientific 

basis to justify these new regulations, and at this point EPA has 

not released the date of the agency claims to have already in hand. 

We have studied and believe that further sulfur and vapor pressure reductions would not produce benefits enough to justify the 

potentially onerous costs. These could include higher fuel manufac-
38 

turing costs, refinery closures, lost jobs, increased emissions, and 

increased product imports. 

Researchers at Baker and O’Brien have studied the costs and impacts of several Tier 3 scenarios which could require a substantial 

reconfiguration of U.S. refineries. Their research shows that the refining industry could face up-front capital costs ranging from between $10 to $17 billion, with recurring annual costs in the range 

of $5 to $13 billion. 

As a result, they contend, gasoline manufacturing costs could rise 

by up to 25 cents a gallon. 

In addition, up to 14 percent of total gasoline production volume 

could be lost. This volume would suffer when sulfur is reduced and 

light-end components are removed from gasoline. 

Finally, because the processes used to reduce sulfur content and 

vapor pressure are also energy intensive, they could increase refinery carbon dioxide emissions by up to 2.3 percent. EPA would thus 

needlessly put upward pressure on refineries to increase their CO2

emissions while separately proposing requirements to reduce their 

CO2 emissions. 

Overall, this research estimate said up to seven U.S. refineries 

could close, as they would be unable to make or recover the required investments to comply with the new requirements. This 

would be in addition to the 66 U.S. refineries that have already 

closed in the last 20 years. The U.S. Department of Energy has 

identified the cost of regulatory compliance as a part of the economic stress that caused the shutdowns. The regulatory burden of 

Tier 3 requirements could add to that stress. 

In conclusion, America’s refining industry is a strategic and valuable asset that provides U.S. with secure supplies of fuel products 

and directly and indirectly employs nearly 500,000 Americans. It is 

already heavily regulated. Layering on new regulations is hard to 

understand when our economy is already not generating jobs, and 

then the Administration says it looks for ways to limit unnecessary 

or inefficient regulations. 

In the interest of more transparency in government and sounder 

regulations, we urge the agency to perform the needed studies and 

analysis and release all other pertinent information to stakeholders 

before going forward with the Tier 3 requirements. 

Thank you for your time today, and I look forward to your questions. 

[The prepared statement of Mr. Greco follows:] 

PREPARED STATEMENT OF MR. BOB GRECO, GROUP DIRECTOR, 

DOWNSTREAM AND INDUSTRY OPERATIONS, AMERICAN PETROLEUM INSTITUTE

Good afternoon. My name is Bob Greco, and I am Group Director of Downstream 

and Industry Operations for the American Petroleum Institute (API). Thank you for 

the opportunity to testify today on overlapping and sometimes contradictory fuel requirements facing the refining industry. API is a national trade association representing over 480 member companies involved in all aspects of the oil and natural 

gas industry. 

U.S. Refining Is a Strategic Asset 

America’s refiners are a strategic asset for the United States, and maintaining a 

viable domestic refining industry is critical to the Nation’s economic security. The 

refining industry provides the fuels that keep America moving. The industry pro-
39 

1 Excluding expenditures by the oil and natural gas industry. 

vides the Nation’s military with secure, available fuels wherever and whenever they 

are required. In addition, it provides affordable and clean fuels products to industries that rely on those fuels to manufacture hundreds of thousands of other consumer products that Americans depend on every single day. 

Equally as important, U.S. refineries sustain hundreds of thousands of good-paying, highly skilled American jobs across the country, in addition to the raw material 

building blocks which support a vast number of other American production industries. According to a study by Wood MacKenzie, the U.S. refining industry employs 

or supports the employment of over 460,000 jobs in the U.S. 

According to the EIA and all credible studies, the United States (and the world) 

will continue to depend on refining petroleum-based products for decades to come 

in order to meet the increasing energy demand. Domestic refineries are competing 

directly with petroleum product imports. Because the refining industry operates on 

a global basis, the U.S. faces the choice of either manufacturing these products at 

home or importing them from other countries. The U.S. refining industry already 

operates in an extremely complex regulatory environment. U.S. refiners have invested $112 billion in environmental improvements from 1990 to 2008, significantly 

reducing emissions while producing cleaner fuels and improving energy efficiency. 

Since 2000 alone, U.S. refiners have spent nearly twice as much on environmental 

improvements as the government and private sector 1 spent on non-hydrocarbon 

technologies. Regulations governing fuel composition, greenhouse gases, and environmental standards have an enormous financial impact on the refining industry, 

as do financial controls and taxation. 

There are significant and potentially very costly additional regulations under development that may take effect over the next five years. These regulations include: 

• More stringent ‘‘Tier 3’’ gasoline standards; 

• Refinery controls, including GHG limitations, through new NESHAP and NSPS 

requirements; 

• RFS implementation and the impending ‘‘blend wall’’; 

• Refinery emissions controls to achieve more stringent air quality standards for 

ozone, PM, etc.; 

• New EPA requirements for boilers and incinerators (Boiler MACT). 

Today I will focus specifically on the proposed Tier 3 gasoline standards being 

drafted by EPA. 

Tier 3 Gasoline Proposal 

EPA is developing a ‘‘Tier 3’’ rulemaking that would likely reduce sulfur levels 

in gasoline to an average of 10 ppm—a nearly 70 percent change from today’s already low levels— while also reducing gasoline volatility and, perhaps, other properties. EPA expects to issue a proposed rule by the end of 2011 and a final rule in 

2012. 

EPA should not issue a Tier 3 proposal without first justifying the impacts, costs, 

and benefits of reducing sulfur and vapor pressure in gasoline. Although EPA maintains these changes to gasoline are needed to improve air quality and fuel economy, 

the Agency has not produced the justification to back up its claims. At this point, 

EPA has not released the data the agency claims to have already in hand. 

We have studied and believe that further sulfur and vapor pressure reductions 

would not produce benefits enough to justify the potentially onerous costs. These 

could include higher fuel manufacturing costs, refinery closures, lost jobs, increased 

emissions, and increased product imports. 

Under the Clean Air Act, EPA has already implemented increasingly stringent 

rules reducing the amount of sulfur allowed in gasoline and reducing vapor pressure. For example, the Tier 2 rules have reduced sulfur levels in gasoline by 90 percent, from an average of 300 parts per million before 2004 to an average of 30 parts 

per million today. EPA has told us that Tier 3 rules would likely require a further 

reduction to 10 parts per million. The Tier 3 changes EPA envisions could require 

refiners to install additional hydrotreating and fractionation units, significantly altering their refinery configurations and operations. 

Researchers at Baker and O’Brien, Inc., have studied the costs and impacts of several Tier 3 scenarios. The study was shared with EPA, DOE, and EIA a couple 

months ago. The Baker and O’Brien work shows that the refining industry could 

face up-front capital costs ranging from between $10 billion to $17 billion, with recurring annual operating costs in the range of $5 billion to $13 billion. 
40 

2 U.S. Department of Energy; Office of Policy and International Affairs. Small Refinery Exemption Study: An Investigation into Disproportionate Economic Hardship March 2011 http:// 

www.epa.gov/otaq/fuels/renewablefuels/compliancehelp/small-refinery-exempt-study.pdf. 

As a result, they contend, gasoline manufacturing costs could rise between 12 

cents per gallon and 25 cents per gallon. 

In addition, between seven percent and 14 percent of total gasoline production 

could be lost. Volume would suffer when sulfur is reduced and light end components 

are removed from gasoline. 

Finally, because the refinery processes needed to reduce sulfur content and vapor 

pressure are also energy intensive, the Tier 3 rule could increase refinery carbon 

dioxide emissions by up to 2.3 percent. EPA would thus needlessly put upward pressure on refineries to increase their CO2 emissions while separately proposing requirements to reduce refinery CO2 emissions. Refineries would also have to ensure 

that increased emission of other pollutants resulting from reconfiguring their refineries are properly controlled and permit limits maintained. 

Overall, Baker and O’Brien estimate that between four and seven U.S. refineries 

could close, as they would be unable to make or recover the required investments 

in plant equipment and operations necessary to comply with the new requirements. 

This would be in addition to the 66 U.S. refineries that have closed in the last 20 

years. The U.S. Department of Energy has identified the cost of compliance with 

various regulations as a part of the economic stress that caused the shutdowns. 2

The regulatory burden of Tier 3 requirements would add to this stress. 

Summary 

If America’s refining industry is to remain viable, we need a regulatory structure 

that improves our environment while allowing the industry to remain competitive 

in the worldwide market. The domestic refining industry’s outstanding history of 

regulatory compliance has made U.S. refineries among the cleanest and most efficient in the world. The industry remains committed to meeting regulatory requirements. 

However, government must adopt a more reasonable approach to regulations. For 

example, it should allow time for existing regulations to reach their full effectiveness before adding new layers of regulation. The high and very real costs of complying with overreaching regulations that have uncertain benefits may weaken the 

ability of our domestic refining industry to compete with foreign refiners. 

EPA’s combination of suggested CAFE standards and Tier 3 fuel changes, coupled 

with potential refinery GHG controls, threatens the existence of U.S. refinery jobs 

and products. Domestic refining capacity could be reduced, thereby increasing imports and costs. 

Specifically regarding the proposed Tier 3 fuel requirements, EPA should complete the long overdue Anti-Backsliding study mandated by EISA (and now two 

years late), finalize and publish its scientific justification as soon as possible, and 

allow stakeholders adequate opportunity to review the data and provide input long 

before the Agency proceeds with a proposed Tier 3 fuel rulemaking. EPA should provide a credible analysis showing that lowering the vapor pressure or sulfur content 

of gasoline will achieve cost-effective, real emissions reductions, and air quality, 

health and welfare benefits. 

Chairman HARRIS. Thank you very much. 

I now recognize our next witness, Mr. David Hilbert of Mercury 

Marine. 

STATEMENT OF MR. DAVID HILBERT, 

THERMODYNAMIC DEVELOPMENT ENGINEER, 

MERCURY MARINE 

Mr. HILBERT. Good afternoon, Chairman Harris, Ranking Member Miller, other Members of the Subcommittee. It is a pleasure to 

be here this afternoon. My name is David Hilbert, and I am a 

Thermodynamic Development Engineer from Mercury Marine, 

which is a division of the Brunswick Corporation. I am here today 

to testify on behalf of the NMMA. 
41 

I was the technical leader of a test of E15 blend fuel in three different Mercury outboard engines. This was done under contract to 

the U.S. Department of Energy and coordinated by NREL. 

The test objective was to understand the effects of running a 15 

percent ethanol blend on outboard marine engines during 300 

hours of wide-open throttle endurance. Three separate engine families were evaluated listed here. Two of each engine were evaluated, 

one being run on E15, the other being run on E0 or ethanol-free 

gasoline. 

It is important to note two main effects seen in this test of the 

ethanol-blend fuel. One is that the use of ethanol fuel on these engines increases the operating temperature, which can reduce the 

strength of the metallic components. The other is that ethanol can 

cause material compatibility issues with the fuel system components due to the chemical interactions. 

So this first slide shows photos of the components from our 9.9 

horsepower test engine with E0 components being on the left, E15 

on the right. The top photos are the undersides of the pistons, and 

the lower photo is of the connecting rods which connect with the 

pistons. You can see the evidence of the heavier carbon deposits 

which indicates the higher metal temperatures on the E15 engine. 

The next slide shows photos of the fuel pump gasket and then 

the mating check valve that it seals against, again, from the 9.9 

horsepower engines, and in general the E15 gasket shows more deterioration, and this occurred to the point where there is actually 

material that transferred from the gasket to the check valve that 

it seals against, indicating that the gasket was breaking down as 

evidenced by the photo in the lower right-hand corner. 

The next set of images is from the E15-fueled 300 horsepower supercharged engine, which did not complete the entire endurance 

test on the E15 fuel. The exhaust valve failed as shown in the 

photo at the left, which ended the test. Upon disassembly, we 

found two other valves that were cracked. Metallurgical analysis of 

these valves show that the failure was due to the elevated metal 

temperatures. 

These photos show a comparison of the pistons and connecting 

rods from the 300 horsepower supercharged engines, and much like 

the 9.9 horsepower pistons and connecting rods, these components, 

again, show evidence of higher operating temperatures as evidenced by the difference in the carbon deposits. 

This last set of images I would like to show you are from the 200 

horsepower, two-stroke engine that was operated on E15. This engine on E15 fuel did not complete the entire endurance test. It 

failed the rod bearing, which destroyed the engine, the remnants 

of which are shown in the upper right-hand corner of the screen. 

The damage was so severe to this engine that the root cause of the 

failure could not be fully identified, but it should be noted that twostroke engines of this architecture mix the fuel and the oil and use 

that mixture to distribute the oil throughout the rest of the engine. 

More testing is needed to understand how the ethanol affects this 

type of lubrication system, as it is not well understood at this time. 

So despite the limited nature of this testing, several significant 

issues were identified. This testing was done on a small sample of 

engines running only one operating point. In addition to the need 
42 

for more two-stroke lubrication system testing, as I just mentioned, 

more testing is really needed to understand how E15 fuel affects 

marine engines during other operating conditions. Examples of this 

would include cold start, hot restart, acceleration, part throttle, et 

cetera. 

And another main effect that needs more investigation is to understand the effect of the fuel on the engines that are stored with 

fuel in the fuel system over long periods of time, which occurs frequently with our engines. 

So what I have presented to you in brief today and what is available in the full report are the results of the limited testing conducted on three of Mercury’s outboard engine families. Changes in 

the fuel formulations and the resulting effects on marine engine 

operability are of high importance to assure a safe and reliable 

fleet of marine engines. This study showed how misfueling marine 

engines currently in use with E15 may cause a variety of issues for 

owners and can lead to premature engine failure. 

Thank you for allowing me the opportunity to testify today. 

[The prepared statement of Mr. Hilbert follows:] 

PREPARED STATEMENT OF MR. DAVID HILBERT, 

THERMODYNAMIC DEVELOPMENT ENGINEER, MERCURY MARINE

Good afternoon, Chairman Harris, Ranking Member Miller, other Members of the 

Subcommittee. 

It is a pleasure to be here this afternoon. My name is David Hilbert, and I am 

a thermodynamic development engineer for Mercury Marine, a division of the 

Brunswick Corporation, located in Fond du Lac, Wisconsin. Mercury Marine has 

been a manufacturer of recreational marine engines continuously since 1939, and 

currently makes and sells more marine engines than any other manufacturer in the 

world. I am here today to testify on behalf of the National Marine Manufacturers 

Association, which represents over 1,500 boat builders, marine engine, and marine 

accessory manufacturers. 

I was the technical leader of a test of E15 blend fuel in three different Mercury 

outboard engines. These tests were conducted at the Mercury Marine test facility 

in Fond du Lac in 2010–2011 by Mercury personnel under contract to the U.S. Department of Energy and coordinated by the National Renewable Energy Lab 

(NREL). The final report was released by the Department of Energy in October 

2011. 

The objective of these tests was to understand the effects of running a 15% ethanol blend on outboard marine engines during 300 hours of wide-open throttle 

(WOT) endurance testing—a typical marine engine durability test. Three separate 

engine families were evaluated. A 9.9 HP carburated four-stroke engine and a 300 

HP supercharged electronic fuel-injected (EFI) four-stroke engine represented current products. A 200 HP electronic fuel-injected (EFI) two-stroke engine was chosen 

to represent the legacy products still in widespread use today. Two engines of each 

family were evaluated. One test engine was endurance tested on E15 fuel, while a 

second control engine was endurance tested on ethanol-free gasoline. 

The primary point to remember when considering this test is that ethanol, in any 

blend, is an oxygenator. E10 fuel has 3% oxygen, while E15 fuel has 5%–6% oxygen. 

On a typical marine engine, this additional oxygen makes the fuel burn hotter, and 

the higher temperatures can reduce the strength of the metallic components. In addition, ethanol can cause compatibility issues with the other materials in the fuel 

systems because of the chemical interaction. I would like to show you some photos 

of the engine components after the endurance testing to illustrate the results of the 

testing. 

We were able to complete the entire 300-hour test running E15 in the 9.9 HP engine. Test results indicated poor running quality, including misfires at the end of 

the test. The poor run quality caused an increase in exhaust emissions. In addition, 

there were increased carbon deposits in the engine on the underside of the pistons 

and on the ends of the rods indicating higher engine temperatures. You can see the 

difference in the carbon deposits in this photo. Additionally, deterioration of the fuel 
43 

pump gasket was evident, likely due to material compatibility issues with the fuel 

blend. This deterioration of the gasket could lead to fuel pump failure, disabling the 

engine. The effect on the gasket is shown here. 

The 300 HP four-stroke supercharged engine did not complete the endurance test 

on E15 fuel. The engine encountered a valve failure after 285 hours of endurance 

testing. As you can see from the photos, one valve broke apart, which ended the 

test, and two others developed cracks. I should mention that these are high-quality 

valves constructed of inconel, a high-temperature resistant alloy. Even so, when we 

did metallurgical analysis on this engine, we found that the cause of these fractures 

was deteriorated mechanical strength due to high metal temperature. The next 

photos show a comparison of the pistons and connecting rods from the Verado engine, also indicating that the E15 test engine operated at elevated temperatures. 

The 200 HP two-stroke engine using E15 fuel also failed to complete the endurance test. It failed a rod bearing at 256 hours of testing, resulting in catastrophic 

destruction of the engine. You can see the remains of the bearings in the photos. 

There was so much damage to the engine that we could not determine the exact 

cause of failure. It is important to note that two-stroke engines of this architecture 

mix the fuel and the oil and use that mixture to distribute the oil to the critical 

interfaces such as the bearings and cylinder walls. Ethanol may have an effect on 

the dispersion or lubricity of the oil as it is mixed with the fuel. More testing of 

such engines is necessary to understand the ramifications of an E15 blend fuel on 

this type of lubrication system, as it is not well understood at this time. 

Despite the limited nature of this testing, several significant issues were identified. The testing was done on a small sample of engines running one operating 

point, wide-open throttle. In addition to the need for more two-stroke lubrication 

system testing, more testing is needed to understand how E15 fuel affects marine 

engines during other operating conditions. Examples would include starting, acceleration/deceleration, part-throttle operation, and the effect of E15 fuel on marine engines that are stored with fuel in the system over long periods of time, which occurs 

regularly with our engines. 

What I have presented to you in brief today—and what is available at the NREL 

Web site in full—are the results of the limited testing conducted on three of 

Mercury’s outboard engine families. Changes in fuel formulations and the resulting 

effects on marine engine operability are of high importance. This study showed how 

misfueling marine engines currently in use with E15 may cause a variety of issues 

for owners and can lead to premature engine failure. Thank you for allowing me 

the opportunity to testify today. 

To see the full report from the testing performed by Mercury Marine on outboard 

marine engines, please visit the following Web site: http://www.nrel.gov/docs/ 

fy12osti/52909.pdf. 

To view the companion report from the testing performed by Volvo Penta on 

sterndrive/inboard marine engines, please visit the following Web site: http:// 

www.nrel.gov/docs/fy12osti/52577.pdf. 

Chairman HARRIS. Thank you very much, and finally I recognize 

our final witness, Mr. Jack Huttner, from Gevo. 

STATEMENT OF MR. JACK HUTTNER, 

EXECUTIVE VICE PRESIDENT, 

COMMERCIAL AND PUBLIC AFFAIRS, GEVO, INC. 

Mr. HUTTNER. Thank you. Good afternoon, Mr. Chairman and 

Ranking Member Miller and Members of the Subcommittee. My 

name is Jack Huttner, Executive Vice President for Commercial 

and Public Affairs of Gevo, and I appreciate the opportunity to be 

here today. 

Gevo is a Colorado-based renewable chemicals and advanced 

biofuels company. We are developing cost-competitive biobased alternatives to petroleum and have 56 million gallons of production 

under development for 2012. We are a unique player in a number 

of ways that might add interesting insights for today’s discussion. 

We do not fit neatly in either the biofuels or the refinery camps. 

We make isobutanol, which is a four-carbon alcohol. We make it 

in ethanol plants that we retrofit with our technology. Isobutanol 
44 

can be easily converted using existing refining and petrochemical 

processes into gasoline, diesel, jet fuel, and chemicals like synthetic 

rubber. In short, Gevo combines advanced biotechnology and traditional chemistry to make a platform hydrocarbon molecule. 

So what kind of company are we after all? Well, we think we are 

something new, a harbinger of an energy future where barriers and 

boundaries between the agricultural and petroleum supply chains 

disappear. Welcome to the world of drop-in biofuels. Made from biomass but formed into end products using chemistry, drop-in 

biofuels require no flex fuel vehicles, special-blended pumps, or new 

pipelines. 

Gevo has been able to work across the industry frontiers here in 

Washington. For example, I am Vice Chairman of the Advanced 

Biofuel Association and sit on the Boards of Bio and Renewable 

Fuel Association. We are also associate members of NPRA and 

SIGMA, and since we use starch from corn as one of our carbon 

sources, we are also actively involved with the Corn Growers Association. We get to see all sides of the energy debate. 

I want to state up front that Gevo supports the RFS2 and stands 

ready to partner with Congress, the EPA, and our other stakeholders to assure its success. RFS2 is the most significant federal 

policy to spur the advanced biofuel industry. The program has 

helped create many opportunities for our company and our peer 

group companies, including the five that have recently become publicly traded. 

We are all growing, adding jobs, and contributing to reduced fossil fuel use and petroleum imports. We salute the EPA for their efforts to implement the important program. 

There are some aspects of policy and regulation that do present 

challenges to the adoption of advanced biofuels. This is understandable because these policies were established when ethanol was the 

only available biofuel, a time before the era of cost-competitive 

drop-in biofuels became possible. 

Technology has evolved over these last 10 years, and a new advanced biorefinery industry has developed. We need to look at our 

policy and regulatory framework with fresh eyes in order to realize 

its promise. 

I would like to just highlight one issue today to illustrate a challenge directly related to these conflicts and unintended consequences, subject of today’s hearing. That is the issue of co-mingling, blending E10 gasoline with biobutanol or other advanced 

biofuels at retail gasoline stations. When the Clean Air Act was 

written, ethanol was the only available biofuel. So the act granted 

gasoline containing between nine and 10 percent a waiver to exceed 

evaporative emission guidelines by one pound of pressure, known 

as Reid Vapor Pressure or RVP. 

This is a problem actually for Gevo and other biofuel producers. 

If you blend E10 gasoline with butanol, which has a very low RVP 

by the way the ethanol content is diluted below 10 percent, and 

thus, the fuel blended with biobutanol would, therefore, lose that 

one pound waiver, even though the fuel dispense would actually 

and could probably have a lower RVP than E10. 

Per the Clean Air compliance point of view, this doesn’t make 

much sense. We should be able to find a way to allow the commin-
45 

gling of E10 and biobutanol so that the new biofuel could enter the 

market to lower evaporative emissions and contribute to cleaner 

air. We believe the EPA has the flexibility to address this issue, 

and we are currently in a very positive dialogue with them to resolve it. 

Writing federal statutes and regulations with only ethanol in 

mind made sense in the past because there were no other available 

biofuel additives for gasoline, but that will be less and less true as 

time goes on. Many advanced biofuel manufacturers, including 

Gevo, are seeking to enter the Nation’s gasoline supply, and we all 

need a policy and a regulatory environment that is open to innovation and new technology and lets the market reward those advanced biofuels based on their energy content, their emissions profile, and their compatibility with all engines and existing infrastructure. 

So, in summary, we believe biofuels policy and regulation should 

create a level playing field for all biofuels and that the market 

should be empowered to choose those that have the best performance and price characteristics. 

Thanks again for inviting me, and I look forward to answering 

your questions. 

[The prepared statement of Mr. Huttner follows:] 

PREPARED STATEMENT OF MR. JACK HUTTNER, EXECUTIVE VICE PRESIDENT, 

COMMERCIAL AND PUBLIC AFFAIRS, GEVO, INC. 

Good afternoon, Mr. Chairman, Ranking Minority Member Miller, and Members 

of the Subcommittee. I am Jack Huttner, the Executive Vice President for Commercial and Public Affairs for Gevo, Inc. Gevo appreciates the invitation to testify at 

this hearing today on the ‘‘Conflicts and Unintended Consequences of Motor Fuel 

Standards.’’ 

Gevo is a Colorado-based renewable chemicals and advanced biofuels company. 

We are developing biobased alternatives to petroleum-based products. We are a 

unique biofuels player in a number of ways—ways that might add some interesting 

insights into this discussion. First of all, we make isobutanol, a four-carbon alcohol, 

via fermentation, but it can be also be made from petroleum. Does that make us 

a biofuel company? Biobutanol can be easily converted using known refining and petrochemical process into gasoline, diesel, jet fuel, and chemicals like synthetic rubber. We are also building a processing unit in Texas to make hydrocarbons. Does 

that make us a refinery company? Besides combining advanced biotechnology and 

traditional chemistry, to confound matters further, we also retrofit current ethanol 

plants to make isobutanol. 

So, what are we in the end? Are we a biofuel company, a chemical company, a 

jet fuel producer, or what? Actually, we think we are something new, a harbinger 

of a new energy future where barriers and boundaries between the agriculture and 

petroleum supply chains disappear. Welcome to the world of drop-in biofuels, made 

from biomass but formed into end products using chemistry. Drop-in biofuels like 

biobutanol work well in small engines, marine engines, and automobile engines. It 

requires no flex fuel vehicles or special blender pumps. It can be transported 

through existing petroleum pipelines so no new transportation or fueling infrastructure is needed. 

There are advantages to early innovators like Gevo and some disadvantages. Let’s 

start with the advantages. First of all, we get to work across the frontiers with all 

sectors and this is particularly true here in Washington. For example, I am vice 

chairman of the Advanced Biofuels Association and sit on the boards of the Biotechnology Industry Organization and the Renewable Fuels Association. But, we are 

also active associate members of the National Petrochemical and Refiners Association and the Society of Independent Gasoline Marketers of America. And, since we 

use the starch from corn as one of our carbon sources, we also are actively engaged 

with the National Corn Growers Association. We get to see all sides of energy policy. 

It is an exciting and challenging place to be. 
46 

But, there are some disadvantages to go along with this ‘‘neither fish nor fowl’’ 

position. Chief among them is developing our various business segments in a policy 

and regulatory environment that was crafted before the era of cost-competitive dropin biofuels became possible as they are becoming today. When ethanol was the only 

commercially viable biofuel, it was only natural that biofuel policy assumed that 

would always be the case. But technology has evolved over the last decade and a 

new industry has developed—advanced biorefineries. 

Gevo is retrofitting its first ethanol plant to make biobutanol in Luverne, Minnesota. It is scheduled to come online in the first half of 2012 and is expected to 

have the capacity to produce 18 million gallons per year of biobutanol. About six 

months later, our second ethanol plant conversion, in Redfield, South Dakota, is 

scheduled to be completed, adding an expected additional 38 million gallons per year 

of biobutanol production capacity. By 2015, we plan to have approximately 350 million gallons of biobutanol production capacity from about nine plants across the nation. 

We also recently announced a contract to supply the U.S. Air Force with blends 

of kerosene made from isobutanol and participation in a new project to develop cellulosic biojet technology. 

Gevo is exactly the type of company, and biobutanol is exactly the type of advanced renewable fuel, that Congress was trying to encourage when it enacted the 

revised Renewable Fuel Standard (RFS) as part of the 2007 energy bill. In 2006, 

Gevo did not exist as a company. This year, we have over 110 employees in three 

states. We are hiring now and expect to continue expanding by 25% or more for the 

next several years. 

Gevo supports the 2007 revisions to the RFS and stands ready to partner with 

Congress and interested stakeholders in assuring its successful implementation. The 

RFS2 program represents the most significant federal level policy to encourage the 

development of an advanced biofuels industry in the United States. We salute the 

EPA for their efforts in support of this program. The 2007 RFS2 program helped 

to create many opportunities for our company and we will continue to work hard 

to take advantage of those opportunities. 

Gevo continues to face challenges as well, including some that relate directly to 

the ‘‘conflicts’’ and ‘‘unintended consequences’’ that are the subject of today’s hearing. Each of these challenges can be resolved in a positive manner without direct 

congressional action, as long as we can all work collaboratively on the congressional 

goals for the RFS2 program. To that end, we are currently working in a constructive 

and positive manner with EPA to create a smooth regulatory framework for the deployment of drop-in biofuels. 

One such challenge is the issue of commingling—blending E10 with biobutanol or 

other second-generation biofuels at retail gasoline stations. This challenge relates to 

the issue I mentioned earlier, namely, when the Clean Air Act was written, ethanol 

was the only biofuel available. So, the Clean Air Act granted gasoline containing between nine and 10 percent ethanol a waiver to exceed the evaporative emission 

guideline by one pound of pressure, known as Reid Vapor Pressure or RVP. This 

is a problem for Gevo and producers of some other biofuel components. If you blend 

a gasoline containing butanol with E10, the ethanol content is diluted below 10% 

in the underground storage tank and therefore loses the one-pound waiver, even 

though the fuel dispensed would likely have a lower RVP than E10. From a clean 

air compliance point of view, we should be able to find a way to allow the commingling of E10 and butanol so that a new, lower RVP biofuel can enter the market, 

lower evaporative emissions and contribute to cleaner air. We are currently in the 

early stages of discussion with the EPA and hope to resolve this issue. 

A second challenge faced by Gevo and other advanced biofuel manufacturers is 

connected with EPA’s proposal for new motor vehicle tailpipe emissions standards, 

expected early next year. These so-called ‘‘Tier 3’’ standards may include, among 

many other provisions, a change in the test gasoline used by EPA and motor vehicle 

manufacturers to certify that engines meet emissions standards. Since the 1960s, 

EPA has mandated that this ‘‘certification fuel’’ be pure gasoline without biofuel additives—in other words, E0. There is the possibility that the new Tier 3 rules will 

stipulate E15 as the new certification fuel. 

In a vacuum, this change from E0 to E15 may seem innocuous. After all, E10 currently is prevalent across the Nation, and EPA recently approved the use of E15 

in certain motor vehicles. However, this proposal raises significant concerns to Gevo 

and other biofuels manufacturers. If adopted, all engine manufacturers will ‘‘tune’’ 

their engines to that fuel so they can meet emission standards. This will likely further establish ethanol as the presumptive biofuel additive. 

Writing federal statutes and regulations with only ethanol in mind made sense 

in the past, because there were no other viable biofuel additives for gasoline. But 
47 

that will be less and less true as time goes on. Many advanced biofuel manufacturers, including Gevo, are seeking to enter into the Nation’s gasoline supply in the 

coming months and years, and we need a policy and regulatory environment that 

is open to new technologies and lets the market reward advanced biofuels based on 

their inherent energy content, emissions, and engine compatibility characteristics. 

Congress did an admirable job in 2007 of drafting a revised RFS program that 

is technology neutral. A central focus of the RFS2 program was technology neutrality—allowing competing biofuel pathways to compete for market entry in a manner that is not biased by federal regulations. Congress drafted the RFS2 program 

in 2007 to avoid picking ‘‘winners and losers’’ among different biofuels technologies. 

EPA should do the same and fashion rules that embody the same intent and outcome to the greatest extent possible. We look forward to working with the EPA and 

Congress to assure that the implementation of regulations creates a level playing 

field for all advanced biofuels. 

Thank you again for inviting me to appear at this hearing today. I would be 

pleased to answer any questions you may have. 

Chairman HARRIS. Thank you very much. I thank the panel for 

their testimony. Reminding Members the Committee rules limit 

questioning to five minutes. 

The Chair at this point will open the round of questions, and I 

recognize myself for the first five minutes. 

Ms. Oge, looking through your testimony, you claim a pretty 

amazing amount of hospital visits prevented and millions of cases 

of respiratory problems including bronchitis and asthma. I have 

asked a previous witness from EPA to actually show me some of 

that data, and they were not forthcoming. So I am going to just tell 

you right upfront I am going to request that information from you 

as well, and I hope you are more forthcoming than others from the 

EPA. 

Now, Ms. Oge, if the RFS did not exist, would, in fact, EPA be 

pursuing stricter limits on sulfur contents and fuel volatility as 

part of its Tier 3 rulemaking? 

Ms. OGE. Absolutely. Let me go back and remind us what—when 

did we start thinking about Tier 3 until the previous Administration in 2008, a new standard was set to .075 parts per million. As 

part of the Regulatory Impact Analysis that the agency did at that 

time in 2008, we consider what we are calling today the Tier 3 Program. It is very typical for EPA when we establish public health 

standards to evaluate cost-effective ways that we can enter at the 

national level. So we get in a way that will reduce costs for localities and States so we don’t have to force controls at the local and 

State level that can be very expensive. 

So what we are calling Tier 3 today, which is a systems approach 

of reducing sulfur from gasoline because sulfur poisons catalysts 

and prevents catalysts from doing their job, and at the same time 

reduce emissions from cars. So the Tier 3 effort started the thinking back in 2008. 

Now, in the meantime, we have been working with the State of 

California as they are moving forward to address car standards 

and, as you probably know, California has a low sulfur fuel, so they 

do have a 10-parts-per-million cap of sulfur so they are able to 

move forward with the standards. In order to have a 50-state program across the country and help areas that cannot meet today’s 

existing ozone standard, which is about 55 areas across the country, we need to have clean sulfur to enable both the new technologies, but at the same time by lowering the sulfur level from 30 

parts per million to lower, you can get significant reductions of ni-
48 

trogen oxides and improve air quality across the board from the existing fleet. 

Chairman HARRIS. Okay. Can the EPA demonstrate that the 

ozone National Ambient Air Quality Standards can’t be met without the fuel property reductions required by Tier 3? 

Ms. OGE. In 2008, the Agency looked at a number of strategies 

including Tier 3. We believe Tier 3 will be one of the most cost-effective ways that the Agency can undertake in order to reduce potential access at the State and local level, going to small facilities 

where the costs on reducing nitrogen oxide could be significantly 

higher. 

As part of our proposal we are going to lay out the cost effectiveness of the actions that we are going to take, both for cost and reducing sulfur in gasoline. 

Chairman HARRIS. Okay. Mr. Greco, Mr. Hilbert showed some 

pretty interesting pictures of the marine engines from the use of 

E15, pretty worrisome, actually. In your view does the final 

misfueling label for E15—is that going to solve the problem in not 

getting that fuel into those engines? 

Mr. GRECO. We would say it is insufficient to do that. We submitted comments to EPA during the development of that label and 

feel that they were not accepted, and EPA, in fact, went with a 

label that we feel is less sufficient for that. So we have our concerns with the current label as finalized. 

Chairman HARRIS. Well, let me follow up a little bit on a similar 

topic. In October, Ms. Oge is quoted as saying the EPA has, ‘‘held 

very productive discussions with both car companies and fuel providers,’’ about the upcoming Tier 3 standards. 

Now, do you agree with her characterizations of EPA’s outreach 

to your—— 

Mr. GRECO. I am hearing a different story from my members who 

have met with Ms. Oge. We feel that—in our discussions there has 

been unanimity about the concerns that we have raised today in 

our testimony about the costs, the impacts on jobs, and energy security from this. And there is a united view of that amongst the 

refining industry. 

Chairman HARRIS. Ms. Oge, that doesn’t leave much doubt about 

where the industry stands, and they are the fuel providers. What 

do you define as a very productive discussion? I am not sure. 

Ms. OGE. That is a good question. 

Chairman HARRIS. If the fuel providers come in and say unanimously, look, this isn’t practical, this won’t work, what was the 

product of that? Because you used a very specific word, very productive discussion. 

Ms. OGE. Well, first of all, I believe that the discussions were 

very productive and—— 

Chairman HARRIS. And that is my question: define productive. 

Ms. OGE [continuing]. Let me define productive. Starting last 

February, I took my team, and I went to all the refineries, most 

of the refineries. We went to Texas, to Kansas, California. So to me 

the fact that EPA spends hours listening to the regular community, 

you know, we didn’t invite them to come to us. We went and visited 

with them. 
49 

So I feel that what we heard from the industry was very productive, because that is how we are going to design the program. I 

think the program that we are designing and we haven’t proposed 

anything. The Administrator has not proposed any standards, we 

haven’t sent the proposal to OMB, so I think for the industry to 

say that our discussions were not productive, it is unfortunate, because they don’t know how those discussions are forming the policy 

that the agency is going to recommend. 

So I would strongly suggest in my mind productive doesn’t mean 

we agree on everything. Productive is that the EPA is listening 

carefully, and the industry was offering very important information, and we need it on a one-on-one basis with each of the refineries rather than meeting with the association where they could 

not disclose confidential information. 

So we have confidential information, I think, that discusses we 

are very productive, and when the proposal is going to go out, I 

think the industry is going to realize that, indeed, those discussions 

that we had with individual refiners have ended in a program that 

is going to be very flexible and cost effective. 

Chairman HARRIS. Okay. I guess people can disagree. 

Mr. Miller. 

Mr. MILLER. Mr. Chairman, before I begin my testimony, I would 

like to move into the record. Mr. Costello could not be here, but he 

wanted to introduce into the record a letter from Virginia Dale, Dr. 

Virginia Dale, the director of the Center for Bioenergy Sustainability at Oak Ridge National Laboratory. The letter provides some 

helpful comments on the NRC report. 

Chairman HARRIS. Sure. I would note that the representative of 

Oak Ridge National Laboratory has informed us the letter from Dr. 

Virginia Dale, despite appearing on Oak Ridge National Laboratory 

letterhead, reflects her views as a member of the National Academy’s biofuels panel and does not represent the views of the lab on 

the issue. Well, you laugh, but that is an important point, because 

you know when you write on Congressional letterhead, it has to 

be—you are representing the U.S. Congress, and you know, we 

have strict rules. But with that entered in the record here, I have 

no objection to the letter, just with that statement from Oak Ridge. 

[The information may be found in Appendix 2.] 

Mr. MILLER. Thank you. Beginning my five minutes, Mr. 

Huttner’s testimony was far more conciliatory towards the EPA 

than some of the majority witnesses in this Committee. I don’t 

think he actually used the term very productive, but he seemed to 

suggest in his testimony that you were having useful conversations 

and that you were willing to talk to them. 

And both Mr. Huttner and Dr. Kesan mentioned a specific regulatory difficulty of blending E10 with biobutanol or other advanced 

fuels, and I do understand that there are some regulatory obstacles 

to the introduction of biobutanol to the marketplace. 

First, do you agree that biobutanol is a promising drop-in fuel, 

and assuming that those new fuels are able to meet all Clean Air 

Act standards, could the obstacle that Dr. Kesan and Mr. Huttner 

referred to be overcome through your procedures? Are you aware 

of the specific blending issue? 
50 

Ms. OGE. Thank you, Mr. Miller. First of all, let me say that 

isobutanol or biobutanol is probably one of the most promising 

fuels because what it is it is a drop-in fuel, so actually you—it becomes part of the refining product so you don’t have to blend it at 

the retail stations, so there are a lot of issues with infrastructure 

and so forth that isobutanol doesn’t have. So, indeed, it is a very 

promising fuel. 

We are having productive discussions with a company, another 

company—— 

Mr. MILLER. Very productive or just productive? 

Ms. OGE. Very—I want to underline very productive. 

Mr. MILLER. All right. 

Ms. OGE. And I think this is—you have raised very important 

issues because clearly when the Clean Air Act was drafted, there 

were different issues that Congress was intending at the time. So 

we are working very closely with the companies so that we are capable of finding pathways to allow this promising fuel in the marketplace. 

Mr. MILLER. Okay. Dr. Kesan, I think that Mr. Huttner used the 

term flexibility. Since you are on the university faculty, I think you 

used the term regulatory innovation, but it seems to be the same 

concept, and that had happened in the past to meet Clean Air requirements to allow new fuels on the marketplace. 

How has that flexibility or regulatory innovation helped meet renewable fuel standards and other standards required by the Clean 

Air Act? 

Dr. KESAN. I agree with Ms. Oge and with Mr. Huttner that this 

is a really good opportunity, and isobutanol has some significant 

potentials. What I suggest in the written article that you are referring to is that if you are concerned about a particular oxygenate 

percentage by weight as being something that you have approved 

in the past, if that is the underlying scientific concern that you 

have sort of capped it at a particular percentage, 2.7, 3.7, whatever 

it is, to the extent that you can actually blend an equivalent of butanol that results in the same oxygenate percentage by weight, for 

example, then clarifying that and clarifying precisely what kind of 

blending percentages you can have would help a lot. It would help 

a lot because there is—that is an area of uncertainty, and there 

have been, as I outlined in the article you mentioned, there are sort 

of ways that you can do this, and the EPA has done that with various sort of substantially similar rulemaking in the context of 

methanol and other places. 

And so I do think that there is an opportunity to capture the 

benefits offered by a fuel that might satisfy the advanced biofuel 

threshold of, you know, 50 percent GHG reductions and which is 

an important objective in RFS2, at the same time meet all the concerns, you know, environmental and otherwise. 

Mr. MILLER. Mr. Huttner, this was your issue. Do you have anything to say about the flexibility or the regulatory innovation of 

EPA in addressing this regulatory obstacle? 

Mr. HUTTNER. No. Thank you, and I appreciate the remarks of 

the other witnesses, and I would say that for a new and emerging 

company like Gevo bringing innovation and new jobs to the economy, representing the advanced biofuel sector, which is a new sec-
51 

tor trying to work its way with the petroleum and the existing ethanol industry, engaging with the regulatory and policymakers early 

on in our activity is an important kind of value that we have as 

a company. Only in that way can we really assure that we can find 

our way into the market with all the big guys. 

So as a newcomer one of those things that we do is try to go out 

early and meet with people. 

Mr. MILLER. My time has expired. 

Chairman HARRIS. Thank you. The Chair now recognizes the 

gentleman from California, Mr. McNerney. 

Mr. MCNERNEY. Thank you, Mr. Chairman. I wasn’t sure whether you were going to call myself or my colleague from California 

first. 

So, Mr. Williams, in your testimony you provided some achievements of the members of the NPRA in their commitment to clean 

air and clean water. Very commendable. You mentioned all have 

been outstanding, have an outstanding record of complying with 

the EPA, have provided hundreds of billions of dollars of investment to dramatically reduce the levels of sulfur in gasoline to 90 

percent and diesel to 90 percent, too. 

These are excellent achievements. Let me ask you a simple—two 

simple yes, no questions. Would your members have done this 

without federal regulation and enforcement? 

Mr. WILLIAMS. Some of the reductions, yes, I believe—we are not 

saying we are opposed to all regulations. The point of my testimony 

is that we are getting to a point where, you know, we would consider it to be almost a tipping point. You have lots of overlapping 

and conflicting regulations that are creating significant challenges 

for our industry, and that is one of the things I said in my written 

testimony and my opening statement was that, you know, we support sensible regulations. It is just a matter of measure, and it is 

a matter of whether or not these things actually can work together. 

Mr. MCNERNEY. How many jobs were lost in that process? 

Mr. WILLIAMS. Well, they did have some costs. If you look at the 

chart in the back of my testimony, it isn’t my chart, it is the Department of Energy. There were 66 refinery closures in the last 20 

years because of some of those regulations, and those regulations 

obviously weren’t the only factor. There were a lot of factors, but 

they were a significant factor according to DOE. I don’t have specific job numbers on that, but again, the DOE chart—— 

Mr. MCNERNEY. So those refineries were closed before 2004? 

Mr. WILLIAMS. Those refineries, some of them closed after 2004, 

and again, the chart lists just since 2008, there have been about 

three refinery closures. There was an announcement recently that 

two companies unfortunately feel they are going to have to close 

three more refineries if they can’t find a buyer over the next year. 

Mr. MCNERNEY. Well, at that point in your testimony, you 

changed and stated that you see no evidence that further reductions would improve future vehicle technology, but I would like to 

submit for the record, Mr. Chairman, two records, one from the Association of Global Auto Manufacturers and the other from the Alliance of Automobile Manufacturers who disagree with that in that 

the amount of sulfur still is damaging to their catalytic converters. 

Chairman HARRIS. Without objection. 
52 

[The information may be found in Appendix 2.] 

Mr. WILLIAMS. Would you like me to comment on the—— 

Mr. MCNERNEY. Sure. 

Mr. WILLIAMS [continuing]. Auto Alliance letter? We have obviously seen that letter, too, and we haven’t seen any evidence that 

current sulfur levels are actually deteriorating catalysts. There are 

obviously a lot of cars out on the road right now running on existing levels of sulfur in gasoline. 

Not only that but there are at least 19 vehicle models that can 

meet Tier 3 vehicle standards and run off Tier 2 sulfur gasoline, 

and they are not expensive models. They are things like the Chevy 

Malibu and the Ford Focus. So it—— 

Mr. MCNERNEY. Well, I am glad it is your opinion, but the two 

letters from the Automobile Manufacturers and the testimony of 

Ms. Oge contradict that. So I don’t think it is a clear case there 

is no improvement still, and I think that is an area that we need 

to be diligent to move forward in. 

Let me ask what is it that is keeping the Association back from 

wanting to do additional refining. Is it the cost? Is it the jobs? 

Mr. WILLIAMS. Additional refining or additional regulatory measures? 

Mr. MCNERNEY. Well, refining additional sulfur out of gasoline? 

Mr. WILLIAMS. Yeah. I mean, I think, you know, my colleague 

over at API highlighted some of the costs associated with those reductions and the Tier 2 reductions started in 2007, but weren’t finalized until—or started in 2000, I am sorry, and weren’t finalized 

until 2004, and 2007. EPA recognized those would be onerous, 

which is why you had the lead time. 

Mr. MCNERNEY. Well, Mr. Greco indicated a 12 to 25 cent per 

gallon cost, but the National Association of Clean Air agencies 

state that the cost would be less than one cent. So, again, I don’t 

see any verification for these statements that improvement is not 

going to hurt the economy and that the cost is going to be that 

drastic. 

Mr. GRECO. We would be happy to go over our study with you 

at your convenience. We just got the NACA study like you did, so 

we did not have the benefit of looking at it. We did model 112 refineries nationwide. So we stand by our study and feel it is very 

robust and credible. 

Mr. MCNERNEY. Well, I think the statement of Dr. Kesan that 

uncertainty is the problem in terms of cost production. So putting 

regulations in place that allow refineries and producers to plan 

ahead for 10 years and meet these levels is going to be much more 

cost effective than waffling back and forth on these issues, especially when the health and safety of our children is involved. 

Thank you, Mr. Chairman. 

Chairman HARRIS. Thank you. The Chair now recognizes the 

gentlelady from California, Ms. Woolsey. 

Ms. WOOLSEY. Thank you very much. 

First of all, Mr. Williams, I am just going to not repeat what my 

colleague just asked you. Tell me what did the NPRA sit here and 

say when they were deciding on the first tier of regulations? Were 

you for it, did you know it was going to be okay, what did you say? 

Mr. WILLIAMS. Which—are you talking about Tier 2 specifically? 
53 

Ms. WOOLSEY. Tier 2. 

Mr. WILLIAMS. Tier 2. Yeah. Our association industry supported 

reductions in sulfur in gasoline. We did have some concerns about 

the extend of the reductions and some of the time frames. 

Ms. WOOLSEY. Uh-huh. 

Mr. WILLIAMS. And I can get you more details on that—— 

Ms. WOOLSEY. Okay. Well, I just—— 

Mr. WILLIAMS [continuing]. Prior to my time—— 

Ms. WOOLSEY [continuing]. Want to be clear. 

Mr. WILLIAMS. But we did support some cuts in sulfur. 

Ms. WOOLSEY. Yeah. Right. Experience doesn’t always support 

being against change because then we learn, oh, my, that was a 

success. 

Mr. Greco, on the 25 cents a gallon increase, what industry in 

this country has higher profits than yours? Why would that 25 

cents that it is going to cost to clean our air fall on the shoulders 

of the consumer? 

Mr. GRECO. Well, first that 25 cents is a manufacturing cost. I 

cannot say how much of that cost would get passed onto the consumer. 

Regarding your other statement, if you look at the earnings 

statements of the various member—various companies, our profits 

on a per dollar sales basis are actually in line if not a little lower 

than many companies; many high-tech companies based in California, for example, have significantly higher profits than oil companies. 

That being said, we have invested as my testimony mentions, over $100 billion in the past 20 years on environmental improvements on making cleaner fuels, and we have seen the benefits of 

that. As Mr. Williams said, our air is significantly cleaner than it 

was 20 years ago. Now, that is a combination of cleaner vehicles 

enabled by cleaner fuels. We are just saying that at this point we 

are seeing diminishing returns from those changes. 

Ms. WOOLSEY. Okay. Well, thank you very much on that. It is 

my understanding that ethanol makes up 10 percent of the U.S. 

daily gasoline demand, about 10 percent. If ethanol were not part 

of our fuel system, how would that 10 percent of the fuel supply 

be filled, and do you think it would cost consumers more or less 

if we don’t have ethanol? 

I will start with you, Mr. Greco, and Mr. Williams, I would like 

you to answer that and then I am hoping Ms. Oge will answer it 

also. 

Mr. GRECO. I mean, I can’t predict the cost in that case. We 

find—— 

Ms. WOOLSEY. What would it be if it wasn’t ethanol? 

Mr. GRECO. It would be other components of the hydrocarbon. It 

would be lighter-ends gasoline. It depends on each refinery. Each 

refinery had to make those investment decisions and blending decisions based on their unique operation. So there is not a single answer that I can give you. 

Ms. WOOLSEY. Okay. Mr. Williams, do you have an idea of what 

would fill that need? 

Mr. WILLIAMS. So just for clarity, you are asking what the cost 

would be if there was more ethanol in—— 
54 

Ms. WOOLSEY. No, if there was less. If we took away the ethanol. 

Mr. WILLIAMS. So if you had less ethanol—— 

Ms. WOOLSEY. Less ethanol. No ethanol. 

Mr. WILLIAMS [continuing]. What would the cost be, and you 

know, I would echo Mr. Greco’s comments that we cannot predict 

price; however, we can say that ethanol has lower energy content 

than a gallon of gasoline, so there would be an efficiency boost. 

EPA has already said in a public letter that there is a mild, a fuel 

economy penalty, fuel efficiency penalty. 

Ms. WOOLSEY. Well, let us have Ms. Oge, if you would like to respond to that. 

Ms. OGE. We would not have 10 percent ethanol. I think you 

would have some ethanol because ethanol improves the octane of 

gasoline, so it is a very important property in gasoline, so you 

would have some ethanol, and then you would have other aromatics, other compounds that are gasoline-based, compounds that 

currently have ethanol. For example, ethanol reduces the amount 

of benzene and aromatics. 

So, again, that is somewhat less toxic substances in the gasoline 

make-up. 

May I speak a little bit about the price issue? 

Ms. WOOLSEY. Yes. 

Ms. OGE. So, you know, the API study basically makes certain 

assumptions of what EPA is going to do. EPA has not declared 

what we are going to do as part of Tier 3. Actually, our Tier 3 efforts are concentrating on reducing sulfur less than 30 parts per 

million. 

So the NACA report is more close, the stated report of what EPA 

is planning to do. API study made a lot of assumptions of actions 

that EPA is going to take as part of Tier 3, but that is not accurate. 

Ms. WOOLSEY. Thank you. 

Mr. GRECO. Can I respond to that? 

Ms. WOOLSEY. My time is up. I would be glad to have them respond. Mr. Chairman, it is up to you. 

Chairman HARRIS. Sure, Mr. Greco. 

Mr. GRECO. Thank you. We made the best assumptions we could 

at the time. It has been a shifting field with EPA as to what this 

target would be. We expect about a 60-day comment period. That 

is probably not sufficient time for us to do a full-blown study when 

we get the proposal, which is why we are asking for the study now 

to see the data and then go to a rulemaking. 

Chairman HARRIS. Thank you. I now recognize the gentleman 

from New York, Mr. Tonko. 

Mr. TONKO. Thank you, Mr. Chair. Mr. Williams, in your written 

testimony you applaud your industry for its significant emissions 

reductions through compliance with Tier 2 standards, which were 

responsible for a 90 percent reduction in sulfur emissions. 

You also claimed no further regulation of sulfur content is necessary. It is widely known that there is a harmful effect from sulfur emissions that is posed to public health. In fact, the National 

Association of Clean Air Agencies, the Northeast States for Coordinate Air Use Management, and the Ozone Transport Commission 

have all come forward in support of Tier through regulations, not-
55 

ing the significant impact reduced sulfur emissions have on public 

health. 

So, Mr. Chair, with your permission I would like to ask unanimous consent to submit for the record statements from these three 

organizations that I just mentioned. 

Chairman HARRIS. Could we see them? I don’t think they have 

been shared with the Majority staff. 

Mr. TONKO. Certainly. 

Chairman HARRIS. If you can just keep them—— 

Mr. TONKO. Okay. 

Chairman HARRIS [continuing]. I will rule on that. 

Mr. TONKO. Thank you. Thank you. The goal of the yet-to-be-proposed Tier 3 standards is to reduce hazardous pollutants in order 

to help States and local air quality agencies reach the 2008 National Ambient Air Quality Standards requirements. It seems to me 

that we have the technology to further reduce these toxic pollutants and achieve our current goals which will help reduce respiratory infections and other respiratory illnesses. 

So, Mr. Williams, in your testimony you state that there is a 

minimum benefit to reducing the already minimal amount of sulfur 

emissions from cars. Why do you claim there will be minimal benefit to reducing sulfur? 

Mr. WILLIAMS. Well, we are already going to continue getting reductions based on the Tier 2 standards that, again, were implemented in 2004 and 2007. In fact, you mentioned the 2008 ozone 

NAAQS. The RIA itself doesn’t explicitly say that Tier 3 for fuels 

is needed. It does talk about some catalyst technology improvements that could be a potential; however, I believe there are about 

eight new counties that are going to be out of attainment with the 

2008 ozone NAAQS standard, and those counties are actually going 

to come into attainment with the Tier 2 standards before Tier 3 

would even be implemented from what we preliminarily heard from 

EPA. 

And, again, there are—you wanted to discuss the vehicles earlier. 

There are Tier 3-capable vehicles that can run on Tier 2. 

So you continue to see sulfur reductions. It is just a matter of 

we have gone from 300 down to 30 PPM and now we are looking 

to go down to 10, and we didn’t go to 30 too long ago. Getting back 

to one of the other points of my testimony, how do all these things 

really interact with, you know, EPA in another letter mentioned 

that the Renewable Fuels Standard could actually see some potential emissions increases, and one of the reasons for the anti-backsliding study and the Energy Independence and Security Act was 

to assess that, and it was pretty clear that Congress said you do 

the 2008 anti-backsliding study and then get an assessment of 

what is going to happen to the fuel supply and then what measures 

might be necessary to do any additional work. 

Now we are being told that the anti-backsliding study is going 

to come out at the same time as the Tier 3 regulations. So the reaction is happening before there is anything to really react to and we 

have a full understanding of the consequences. 

Mr. TONKO. Ms. Oge, do you have any comments on this regard? 
56 

Ms. OGE. Thank you. We—scientifically it is proven that sulfur 

poisons catalysts. It is like back in the ’70s when we had to remove 

lead to enable the three-way catalyst. 

So it is not a secret that the higher the sulfur level, the more 

it impacts the effectiveness of a catalyst. California has 10 parts 

per million sulfur, Europe, Japan, other countries. We have the 

most advanced automotive technologies. We need a better quality 

for our fuel to enable the catalyst to perform to the best potential 

for those precious metals. 

On the other hand, there is extensive data to show that today’s 

cars will benefit by having low sulfur, by reducing nitrogen oxides. 

As a result, cleaner air for 130 million people that breathe in 

healthy air in this country. 

Mr. TONKO. Thank you. When it comes to reducing NAAQS, what 

source, in your opinion, Ms. Oge, is the most cost effective? 

Ms. OGE. We believe that efforts that we are undertaking, the 

Tier 3 efforts, which is to reduce NAAQS, emissions, and hydrocarbons from tailpipe emissions and from cars, combining it with 

low sulfur level, would provide some of the cost-effective strategies 

for local and State governments to address ozone air pollution. 

Mr. TONKO. Thank you. I yield back to Mr. Chair. 

Chairman HARRIS. Thank you very much. I would also like to 

take this opportunity to ask you—and by the way, we will enter 

those—there is no objection, so we will enter them. 

[The information may be found in Appendix 2.] 

Chairman HARRIS. I would like to take this opportunity to ask 

unanimous consent to add a few items into the record as well. 

These items are in the public domain and have been shared with 

the minority. The executive summary of the National Research 

Council’s report, Renewable Fuel Standard Potential Economic and 

Environmental Affects on U.S. Biofuel policy, the National Renewable Energy Laboratory and Mercury Marine report, high ethanol 

fuel endurance, the study of the effects of running gasoline with 15 

percent ethanol concentration and current production outboard 

four-stroke engines and conventional two-stroke outboard engines, 

the executive summary of the Baker and O’Brien study, potential 

supply and cost impacts of lower sulfur, lower RVP gasoline, responses requested by Vice Chairman Sensenbrenner on warranty 

and liability concerns about E15 which were sent by BMW Chrysler Ford GM, Honda, Hyundai, Kia, Mazda, Mercedes, Nissan, 

Subaru, Toyota, Volkswagon, Volvo, Briggs and Stratton and Mercury Marine, statements objecting to EPA’s granting of a partial 

waiver for E15 from the Alliance of Automobile Manufacturers and 

the Association of Global Auto makers, and a letter send by the 

Chairman of the Full Committee to Administrator Jackson about 

Tier 3 and EPA’s responses. 

Without objection, so ordered. 

[The information may be found in Appendix 2.] 

Chairman HARRIS. I thank the witnesses for their valuable testimony and the Members for their questions. We are going to get out 

on time despite a late start. 

The Members of the Subcommittee may have additional questions for the witnesses, and we ask, and we will ask you to respond 

to those in writing. Ms. Oge, I am going to have to ask you specifi-
57 

cally; the EPA is particularly unforthcoming with answers. Other 

EPA witnesses. So I hope you break the mold on that. I will ask 

you to respond to the questions in writing. The record will remain 

open for two weeks for additional comments from Members. 

The witnesses are excused, and this hearing is adjourned. 

[Whereupon, at 3:57 p.m., the Subcommittee was adjourned.] 

(59) 

Appendix 

ANSWERS TO POST-HEARING QUESTIONS
60 

ANSWERS TO POST-HEARING QUESTIONS

Responses by Mr. Brendan Williams, Senior Director of Advocacy, 

National Petrochemical and Refiners’ Association 

Questions Submitted by Chairman Andy Harris 

Q1. In your testimony, you state that NPRA believes that a comprehensive cost-benefit analysis would be in the national interest. This Congress passed the TRAIN 

Act to require such an analysis on the stationary source regulation. Do you envision similar legislation for mobile source regulation? Or should the cost-benefit 

of the stationary regulation include existing and potential regulation on mobile 

sources as well? 

A1. Comprehensive cost-benefit analysis on both stationary and mobile source regulations is in the best interest of the Nation. We understand that federal and State 

regulators have a hard time balancing the need for effective regulation and economic development. However, the size, scope, and cumulative burden of current and 

impending regulatory activity is creating uncertainty and conflicts that burden the 

domestic fuel supply. Legislation like the TRAIN Act is a significant step forward 

to ensure the regulatory blizzard that fuel producers are facing does not put them 

out of business. 

Many mobile source regulations facing fuel producers need to be examined because of their tremendous cost, conflicts with other regulations, and their potential 

to negatively impact the economy. Considering both mobile and stationary sources 

together in cost benefit analysis is critical, because mobile source regulations can 

create conflicts with stationary source regulations. As discussed in my testimony, 

such is the case with EPA’s Tier 3 gasoline regulations, which would require new 

energy-intensive processes that could lead to more greenhouse gas (GHG) emissions 

and come in conflict with EPA’s GHG regulations under the Clean Air Act. In addition, EPA is moving forward with the Tier 3 rulemaking without conducting the 

anti-backsliding study required in section 209 of the Energy Independence and Security Act of 2007 (EISA 2007). Not only does this move contradict congressional 

intent, but it could lead to additional regulatory conflicts if the study indicates the 

RFS could complicate Tier 3 in some manner (or vice versa). In September, the 

House passed the Kinzinger-Gonzalez Amendment to the TRAIN Act 269–145. The 

amendment would ensure the economic and jobs impacts of EPA’s Tier 3 regulations 

are thoroughly analyzed and reviewed. NPRA supported this important amendment. 

Q2. How has the inclusion of mandated volumes of com ethanol impacted our reliance on foreign oil? What effect will cellulosic ethanol production have on fossil 

fuel use? 

A2. The inclusion of mandated volumes of corn ethanol has not reduced U.S. reliance on foreign oil. While such a goal may have been the law’s intent, the result 

has been negligible. Refineries still need crude oil to produce petroleum products 

that are not affected by corn ethanol, such as home heating oil, diesel, and jet fuel. 

Ethanol was used in the fuel supply before the RFS2 mandate because it is a 

source of octane. Ethanol currently makes up slightly less than 10 percent of the 

domestic gasoline supply. It has lower energy content than gasoline, resulting in 

slightly lower fuel economy. It will be extremely difficult to blend more than 10 percent ethanol into the fuel supply given extensive issues that need to be addressed 

to overcome the ‘‘blendwall’’ (e.g., the fact that vehicles and infrastructure handling 

the existing fuel supply are not equipped to run on gasoline containing more than 

10 percent ethanol). 

It is premature to speculate on the effect of cellulosic biofuels. Large volumes of 

these fuels were mandated in EISA 2007. The law required the use of 100 million 

gallons of cellulosic biofuels in 2010 and 250 million gallons in 2011. Yet despite 

these mandates, no cellulosic biofuels have been produced to date. 

Q3. In addition to the litany of mobile source regulations facing your industry, it is 

my understanding that President Obama has endorsed a low carbon fuel standard modeled after the one in California. What would be the impacts of a national low carbon fuel standard? 

A3. A national LCFS would essentially create a cap-and-tradelike system for the 

fuel supply, which would likely result in significant increases in fuel costs and 

threaten the availability of supply around the U.S. A recent study by Charles River 

Associates (CRA) shows that a national LCFS would raise the cost of transportation 

fuels by up to 80 percent within five years and up to 170 percent within 10 years. 
61 

Along with the significant increase in transportation costs, the study shows a national LCFS policy could lead to closures of upwards of 50 U.S. refineries. 

Furthermore, a national LCFS not only impacts the fuel supply, but the economy 

as a whole, significantly reducing consumer purchasing power and the fiscal health 

of the U.S. The CRA study indicates a national LCFS would result in an estimated 

2.3 million to 4.5 million net American jobs lost by 2025 from baseline levels, with 

1.5 million losses from the manufacturing sector alone. This study also indicates 

that the average American household’s annual purchasing power would be reduced 

between $1,400 and $2,400 by 2025 relative to 2010 levels. In addition, studies conclude a national LCFS would lead to a decline in U.S. Gross Domestic Product of 

two to three percent—or $410 billion to $750 billion—by 2025. 

Q4. When the U.S. went from leaded to unleaded gasoline, EPA mandated fuel nozzles for leaded gasoline differ from those for dispensing unleaded gasoline. Despite this difference, there was a 20 percent incidence of misfueling. Given this 

historical figure, what is your opinion of the chance of misfueling with E15 for 

on-road legacy vehicles—pre-2001—and off-road engines if the only safeguard is 

a misfueling label? 

A4. NPRA cannot speculate on the likelihood of misfueling with the only safeguard 

being the misfueling label. However, NPRA has significant concerns about E15 

being sold under the same canopy as regular gasoline, as this could result in a 

greater chance of misfueling. In June 2011, EPA introduced an orange and black 

label to make drivers aware of the change to prevent misfueling. We do not feel that 

the label is sufficient to prevent consumers from misfueling. 

EPA’s decisions in November of 2010 and January 2011 to grant a partial waiver 

for gasoline containing 15 percent ethanol, known as E15, to be sold in the marketplace for cars and light trucks produced in model year 2001 or newer are illegal. 

EPA does not have the authority to grant a partial waiver, and this product will 

most likely create significant problems in the marketplace, including enhancing the 

probability of misfueling. 

Several studies show that misfueling with gasoline blends containing more than 

10 percent ethanol can result in engine damage for not only cars and light trucks, 

but also non-road engines, such as lawnmowers and boats. For example, two recent 

studies by the National Renewable Energy Laboratory tested the effects of E15 on 

marine engines and found E15 resulted in problems with engine performance and 

durability, increased fuel consumption, and increased nitrogen oxide emissions. Furthermore, increased ethanol blends could damage cars’ catalytic converters, which 

were installed to reduce emissions, and its corrosive nature could damages fuel 

tanks and fuel dispensing equipment, putting people at greater risk. Even the Government Accountability Office (GAO) released a report stating that E15 needs further studies due to the potential negative impacts it would have to consumers. 

Questions Submitted by Ranking Member Brad Miller 

Q1. Please provide your name and employment organization(s). 

A1. Brendan Williams. National Pertochemical & Refiners Association. 

Q2. Are you an officer or employee of, or otherwise compensated by, any other organizations(s) that may have an interest in the topic of this hearing? 

A2. Yes. 

Q3. If the answer to question 2 is ‘‘yes,’’ please specify the organization(s) and the 

nature of your relationship with the organization(s). 

A3. NPRA represents virtually every refinery and petrochemical facility in the 

U.S., as well as many companies who have a relationship with the refining and petrochemical industries, but do not actually possess refineries or petrochemical facilities. A full list of NPRA members can be found on our Web site: www.npra.org. 

Q4. in the last three calendar years, including this one, have you been a registered 

lobbyist? 

A4. Yes. 

Q5. If the answer to question 3 is ‘‘yes,’’ please list all of your client(s) that may have 

an interest in the subject matter of this hearing, and the dates between which 

you represented that client or those clients. 

A5. For a list of all members of NPRA, please visit www.npra.org. I have been with 

NPRA since 2007. 
62 

Q6. if you have worked as an attorney, contractor, consultant, paid analyst, or in 

any other professional services capacity, please provide a list of all of your firm’s 

clients who you know to have an interest in the subject matter of this hearing. 

These should be clients that you have personally worked with in the past three 

calendar years (including the present year). Provide the name of the client, the 

matter on which you worked, and the date range of that work. If there was a 

deliverable, please describe the product. 

A6. N/A. 

Q7. Please provide a list of all publications on which you have received an author 

or coauthor credit relevant to the subject of this hearing. If the list is extensive, 

the 10 most recent publications would be sufficient. 

A7. N/A. 
63 

Responses by Dr. Ingrid Burke, Director of the Haub School and 

Ruckelshaus Institute of Environment and National Resources, University of Wyoming, 

Co-Chair, National Research Council Committee on Economic and 

Environmental Impacts of Increasing Biofuels Production 

Questions Submitted by Chairman Andy Harris 

Q1. How has increased ethanol production had an effect on the number of acres 

dedicated to corn production in the U.S.? How has our soil, water, and wildlife 

habitat been affected as a result? 

A1. Responses are based on the content of the report NRC report Renewable Fuel 

Standard. Potential Economic and Environmental Effects of U.S. Biofuel Policy with 

references to specific pages. 

The percent of U.S. corn production used for fuel ethanol has been increasing 

since 2001 (Figure 2-3 on p. 37). USDA-ERS data indicate that planted acreage for 

corn has increased in this decade compared to the last one. 

As corn acreage increases, greater nitrogen fertilizer is applied to achieve desired 

yields. Thus, there is a tendency for greater runoff and loadings to streams and rivers from increased corn production (p. 234), thereby decreasing water quality. In 

fact, a recent analysis of the National Water Quality Assessment programs found 

that since 1980 most of the drainages associated with the Mississippi River increased in flow-normalized concentration and flux of nitrate. Many studies relate 

the hypoxic area in July to August to the nitrogen loading emanating from the Mississippi River and Atchafalaya River from May to June, suggesting that increases 

in nitrogen runoff serve to increase gulf hypoxia (p. 232). 

The effect of increasing corn production in the United States on soil and biodiversity is largely site specific and depends on the condition of the land before it was 

put into corn production. If the land was already in annual crop production, then 

the conversion to corn production might not have a large additional effect on soil 

and biodiversity. In contrast, if the expanded production involves removing perennial vegetation on a piece of land and replacing it with corn, then the land conversion results in losses of major stores of soil carbon and disrupts the future potential 

for storing carbon in soil (p. 252). The land conversion from perennial vegetation to 

corn has also been shown to be correlated with reduced grassland bird diversity and 

population. Likewise, taking land from the Conservation Reserve Program (CRP) 

out of retirement to grow corn for ethanol raises similar soil quality and biodiversity 

concerns (p. 254). 

Q2. Will second generation bioenergy crops like switchgrass and Miscanthus use 

more or less water than current crops like corn and soybeans? Also, will they 

use more or less fertilizers and pesticides? 

A2. Whether switchgrass and Miscanthus use more water than corn and soybean 

largely depends on where the crops are grown and whether they are irrigated (pp. 

244 and 248). Studies have shown that switchgrass and Miscanthus yield increases 

with precipitation and irrigation (Heaton et al., 2004; Robins, 2010). Thus, if the 

crops are grown in dry areas and are irrigated to enhance yield, then switchgrass 

or Miscanthus would not necessarily use less water than corn. 

The average nitrogen fertilization rate for corn is 138 lbs/acre (p. 207). The reported nitrogen fertilizer use ranges from 50 to 100 lbs/acre for Miscanthus and 

from 0 to 200 lbs/acre for switchgrass (p. 208). Although Miscanthus and 

switchgrass have the potential to use less nitrogen fertilizer than corn, it largely depends on the condition of the land on which the crops are grown and the management decisions that individual land operators make. 

Severe pest and disease outbreaks have not been reported outside the tropics for 

switchgrass and Miscanthus (p. 109). They are likely to use less pesticides than corn 

and soybean. However, the pest and disease dynamics could change if cultivation 

of switchgrass and Miscanthus increases and become more intensive to achieve desired yields. 

Q3. Why did the NRC panel find that the RFS ‘‘may be an ineffective policy for reducing global greenhousegas emissions’’? 

A3. Processes that affect GHG emissions of biofuels include land-use and landcover changes, CO2 storage in biomass during growth and emissions from fossil fuel 

combustion in the manufacturing, transport, and application of agricultural inputs, 

from fermentation to ethanol, and from tailpipe emissions (p. 5). Some of those processes that affect GHG emissions are highly variable, even within one given type of 
64 

biofuel. For example, GHG emissions are strongly influenced by whether a biorefinery uses fossil fuel or bioelectricity, or whether any direct or indirect land-use 

changes were incurred for feedstock production. The published estimates of life-cycle 

greenhouse gas emissions of corn-grain ethanol vary from 52–177 g CO2 eq per MJ 

(p. 220). The range of values illustrates how changes or variations in processes (for 

example, fossil fuel vs. bioelectricity use, coproduct production, amount of fertilizer 

input, or extent of indirect land-use change) can result in different GHG emissions 

for the same fuel type. 

If no direct or indirect land-use or land-cover changes are incurred, biofuels tend 

to have lower life-cycle GHG emissions than petroleum-based fuels. Feedstocks such 

as crop and forest residues and municipal solid wastes incur little or no direct and 

indirect land-use or land-cover changes; therefore, cellulosic biofuels made from 

those feedstocks are more likely to reduce GHG emissions when care is taken to 

maintain land productivity and soil carbon storage. 

Other cellulosic feedstocks such as switchgrass and Miscanthus can contribute to 

carbon storage in soil, particularly if they are planted on land with low carbon content. For example, planting perennial bioenergy crops in place of annual crops could 

potentially enhance carbon storage in that site. However, planting switchgrass and 

Miscanthus on existing cropland can trigger indirect land-use changes elsewhere 

that can result in large GHG emissions. Although RFS2 can levy restrictions to discourage bioenergy feedstock producers from land-clearing or land-cover change in 

the United States that would result in net GHG emissions, the policy cannot prevent indirect land-use changes nor can it control such land-use changes outside the 

United States. Therefore, the extent to which RFS2 contributes to lowering global 

GHG emissions is uncertain. 

Q4. Can you describe the consensus process used by the NRC panel in reaching their 

conclusions? Did any of the individual members disagree with the findings? 

A4. Each member acts in an individual capacity and brings a unique expertise to 

the committee. Committee members are asked to consider respectfully the viewpoints of other members, to reflect their own views rather than be a representative 

of any organization, and to base their scientific findings and conclusions on the evidence. The committee deliberates in meetings to develop draft findings and conclusions. 

Once the study committee has a consensus draft of its report, it is subject to an 

independent peer review overseen by Academy members on the Report Review Committee. The peer review process typically strengthens the reports significantly, as 

the Academy will not issue a report until it is satisfied that the questions given to 

the study committee have been adequately addressed (and that the study committee 

did not go beyond its task to address other questions), that the conclusions made 

in the report are well supported, and that all important issues raised in the review 

have been addressed. 

Study committee members are asked to sign off on the final draft of the report. 

Each committee member has the right to issue a dissenting opinion to the report 

if he or she disagrees with the consensus of the other members. 

Thus, NRC reports not only represent the consensus views of the authoring study 

committee, but also have the institutional endorsement of the National Academies 

(http://www.nationalacademies.org/studyprocess/index.html). 

All committee members agreed to the content and signed off on the report Renewable Fuel Standard: Potential Economic and Environmental Effects of U.S. Biofuel 

Policy. No dissenting opinions to the report were registered 

REFERENCES 

Heaton, E., T. Voigt, and S.P. Long. 2004. A quantitative review comparing the 

yields of two candidate C4 perennial biomass crops in relation to nitrogen, temperature and water. Biomass and Bioenergy 27(1):21–30. 

Robins, J.G. 2010. Cool-season grasses produce more total biomass across the 

growing season than do warm-season grasses when managed with an applied irrigation gradient. Biomass and Bioenergy 34(4):500–505. 

Questions Submitted by Ranking Member Brad Miller 

Q1. As I understand it, your study assumes no further technology advances for 

biofuels. Would you characterize this as a reasonable assumption given the current state of the biofuels industry? Why did the NRC choose to make this assumption? 
65 

A1. Response is based on the content of the NRC report Renewable Fuel Standard. 

Potential Economic and Environmental Effects of U.S. Biofuel Policy with reference 

to a specific page and appendix. 

The NRC study does not assume ‘‘no further advances for biofuels.’’ The committee performed a ‘‘sensitivity analysis’’ to account for technology advances for conversion of biomass to fuels (p. 109). Based on an exhaustive review of the literature 

(Appendix M), the committee concluded that the current and near future technologies for cellulosic biofuels could likely achieve a conversion yield of 70 gallons 

of ethanol equivalent for each dry ton of biomass. The committee ran the BioBreakeven model with that conversion yield and then performed the same analysis with 

a conversion yield of 80 gallons of ethanol equivalent per dry ton of biomass to account for any technology advancements between now and 2022. 

Q2. Please provide your name and employing organization(s). 

A2. Ingrid Burke; University of Wyoming. 

Q3. Are you an officer or employee of, or otherwise compensated by, any other organization(s) that many have an interest in the topic of this hearing? 

A3. No. 

Q4. In the last three calendar years, including this one, have you been a registered 

lobbyist? 

A4. No. 

Q5. If you have worked as an attorney, contractor, consultant, paid analyst, or in 

any other professional services capacity, please provide a list of all of your firm’s 

clients who you know to have an interest in the subject matter of this hearing. 

These should be clients that you have personally worked with in the last three 

calendar years (including the present year). Provide the name of the client, the 

matter on which you worked and the date range of that work. If there was a 

deliverable, please describe that product. 

A5. None. 

Q6. Please provide a list of all publications on which you have received an author 

or coauthor credit relevant to the subject of this hearing. If the list is extensive, 

the 10 most recent publications will be sufficient. 

A6. List as follows: 

Evans, S.E., Byrne, K.M., W.K. Lauenroth, and I.C. Burke. Long-term drought reduces the dominant species and increases ruderals in a semiarid steppe. In press, 

Journal of Ecology. 

Evans, S.E., I.C. Burke, and W.K. Lauenroth (2011), Controls on soil organic carbon and nitrogen in Inner Mongolia, China: A cross-continental comparison of temperate grasslands, Global Biogeochem. Cycles, 25, GB3006, doi:10.1029/ 

2010GB003945. 

Gathany, M. and I.C. Burke. 2011. Post-fire soil fluxes of CO2, CH2, and N2O 

along the Colorado Front Range. International Journal of Wildland Fire, in press. 

Bontti, E.E., I.C. Burke, and W.K. Lauenroth. 2011. Nitrogen partitioning between microbes and plants in the shortgrass steppe. Plant and Soil, in press. 

McHale, M.R., E.G. McPherson, I.C. Burke. 2007. The potential of urban tree 

plantings to be cost effective in carbon credit markets. Urban Forestry and Urban 

Greening 6:49–60. 

Currie, W.S., M.E. Harmon, I.C. Burke, S.C. Hart, W.J. Parton, and W. Silver. 

2010. Cross-biome transplants of plant litter show decomposition models extend to 

a broader climatic range but low predictability at the decadal time scale. Global 

Change Biology 16: 1744–1761. 

Munson, S.M., T.J. Benton, W.K. Lauenroth, and I.C. Burke. 2010. Soil carbon 

flux following pulse precipitation events in the shortgrass steppe. Ecological Research, 25: 205–211. 

McCulley, R.L., I.C. Burke, and W.K. Lauenroth. 2009. Conservation of nitrogen 

increases with precipitation across a major grassland gradient in the central Great 

Plains of North America. Oecologia 159(3):571–581. 

Burke, I.C., W.K. Lauenroth, G. Cunfer, J.E. Barrett, A.R. Mosier, and P. Lowe. 

2002. Nitrogen in the central grasslands region of the United States. BioScience 

52(9):813–823. 
66 

Burke, I.C., W.K. Lauenroth, and D.G. Milchunas. 1997. Biogeochemistry of managed grasslands in the Central Grasslands of the U.S. Pages 85–102. In Paul, E. 

and K. Paustian, eds. Organic matter in U.S. agroecosystems. Lewis Publishers. 
67 

Responses by Ms. Margo T. Oge, 

Director of the Office of Transportation and Air Quality, EPA 

Questions Submitted by Chairman Andy Harris 

Q1. Why did EPA only choose to require service stations to label E15 but not other 

gasoline ethanol blends like E10, E85, or other mid-level ethanol blends? 

A1. As part of the E15 Misfueling Mitigation Rule, EPA proposed to label E15 and 

sought comment about whether to also label E10. Most commenters stated that 

there is no need to label E10 fuel dispensers. Since E10 is currently prevalent in 

the marketplace (over 90 percent of the market) and already familiar to consumers, 

EPA concluded that E10 labels are not needed to minimize misfueling with E15 and 

that the E15 label contains the information needed to steer consumers to the fuel 

appropriate for their vehicles. EPA also noted that adding an EPA label to E10 fuel 

dispensers may confuse consumers since most States already require labels for E10 

fuel dispensers. 

EPA also sought comment about whether to require labels for E85 and other midlevel ethanol blends. Public comments were split on that issue. The Agency decided 

not to require labels for those fuel dispensers because the Federal Trade Commission (FTC) already requires labels for pumps dispensing E85 and other alternative 

fuels, and the FTC is considering further labeling requirements for E85 and midlevel ethanol blends. EPA also observed that most E85 and mid-level ethanol blend 

dispensers already have signage that makes clear that they are appropriate only for 

flexible-fueled vehicles. In sum, EPA concluded that it was not appropriate to adopt 

labeling requirements for blends other than E15 at this time. 

Q2. Why did EPA backpedal on the content and language on the warning label from 

the initial proposal to the final label that was announced in June? 

A2. EPA adopted a final E15 pump label that reflects many commenters’ suggestions and the Agency’s consultation with consumer labeling experts at the FTC. The 

Agency determined that the final label effectively provides consumers with the key 

information they need to avoid using E15 in vehicles not covered by the partial 

waiver decisions without unduly alarming them. FTC experts advised that stronger 

warning language might result in consumers avoiding use of E15 in vehicles for 

which the fuel is appropriate under the waivers (i.e., MY2001) and newer light-duty 

vehicles). 

Q3. Since 14 automakers wrote to Representative Sensenbrenner saying that their 

warranties will not cover E15, who will be at fault when a motorist misfuels? 

A3. EPA cannot speak for auto manufacturers as to whether manufacturers’ product warranties will cover the costs of any problems that result if a motorist misfuels. 

EPA’s waiver decisions and labeling rule do not change the terms of manufacturers’ 

warranty provisions. Under EPA’s regulations governing emissions warranties, manufacturers may condition their emissions warranties on use of a particular fuel so 

long as the fuel is broadly available, and may deny an emissions warranty claim 

if use of a different fuel causes the problem. EPA does not have jurisdiction over 

other warranties that manufacturers may provide. However, manufacturers have a 

strong incentive to work with their customers to solve problems. 

EPA believes that the misfueling mitigation measures the Agency has established 

will minimize the potential for misfueling. EPA also plans to work with stakeholders 

to monitor the entry of E15 into the marketplace and the effectiveness of the required misfueling mitigation measures so that any issues that develop may be addressed on a timely basis. In addition, representatives of ethanol producers are currently working with automakers, boat manufacturers, EPA, and others to develop 

public education materials that will provide consumers with additional information 

to help them make appropriate fuel choices for their vehicles and gasoline-fueled 

equipment. 

Q4. When does EPA plan to register E15? What differences did EPA find between 

E10 and E15? 

A4. The timing of registration depends on the actions of E15 manufacturers. Under 

the Clean Air Act, every fuel manufacturer that intends to introduce E15 must first 

register the fuel with EPA just as they need to register E10 fuels. To meet registration requirements, fuel manufacturers must submit an application that includes 

emission and health effects information as well as company-specific information. 

Last year, the Renewable Fuels Association and Growth Energy submitted information and analysis for meeting the emissions and health information requirements 
68 

for registering E15. The Agency reviewed the information and identified a few gaps 

that the two associations then worked to fill. They made their final submission last 

month, and the Agency subsequently issued an evaluation document that finds that 

the submission would satisfy the emissions and health effects information requirements for a registration application for E15. The final submission and evaluation 

document considers the differences between E10 and E15. 

As noted above, each E15 fuel manufacturer must register the fuel, and a complete registration application includes more than emissions and health effects information. Since EPA has evaluated the final RFA and Growth Energy submission, 

fuel manufacturers may choose to rely on that information to complete their applications, but they must also provide company-specific information. We review and, as 

appropriate, approve complete applications as they are received. As of April 2, we 

have approved 24 applications for ethanol for use in E15. 

It is also important to note that, prior to marketing E15, there are other requirements under the E15 partial waivers that must be satisfied. These include submission, EPA approval, and implementation of a misfueling mitigation plan and a survey plan for reviewing implementation of labeling and other E15-related requirements. State and local fuel quality, safety, and other regulations may also apply. 

Q5. E15 is not a legal fuel until it is registered with EPA. EPA indicates they have 

received an application for registration. Can you identify a timeline for making 

a decision to approve or not approve the fuel? 

A5. As of March 16, 2012, EPA has received 18 applications to register ethanol for 

use in making E15. EPA’s practice for all fuel registration applications is to review 

and act on them in the order they are received. 

Q6. As part of the Tier 3 rulemaking later this year, will EPA propose to change 

the current certification fuel from E0 (e-zero) to E15? If this has not been determined yet, what factors will EPA consider in making this decision? 

A6. As we look to set new vehicle emission standards, we are also considering 

changes to the test fuel used to certify them. The current test fuel is E0 and is no 

longer representative of in-use gasoline. We will be considering all the properties 

of gasoline, including the ethanol content that is expected to reflect in-use gasoline 

during and after the implementation time frame of the Tier 3 emission standards. 

Q7. EPA completed consultations with a Small Business Advocacy Review Panel 

about the upcoming Tier 3 regulations on October 14. Why was this review panel 

necessary, what concerns were raised by the small businesses, and what changes 

has the Agency made to the proposal in light of those concerns? 

A7. The Regulatory Flexibility Act, as amended by the Small Business Regulatory 

Enforcement Fairness Act, requires that the Agency convene a review panel for any 

rule subject to notice-and-comment rulemaking requirements that may have a significant impact on a substantial number of small entities. As we began the rulemaking process, we could not be certain whether the rulemaking would have a significant impact on a substantial number of small entities, so we decided to convene 

a SBAR Panel for the Tier 3 rulemaking. As we continued to develop the proposal, 

the Panel process enabled us to receive the views and recommendations of the Panel 

and small entity representatives. We are using this input and insights gained 

through the Panel process as well as prior Panels that we have convened to design 

the proposal from the outset in a way that is responsive to the concerns of small 

businesses. We have convened such a Panel in many of our major rules, and this 

has typically led to our providing flexibility for small entities, such as providing additional time to comply with the standards. 

Q8a–b. EPA stated that it intends to publish the Tier 3 Proposed Rule in December 

2011. EPA has also stated this rule will include regulatory streamlining provisions to satisfy the President’s July 11th Executive Order. (a) If the Proposed Rule is delayed beyond the end of the year for reasons unrelated to the 

streamlining provision, would EPA still include these streamlining provisions in the proposal? (b) Would EPA drop these important streamlining 

changes in order to meet the self-imposed December deadline? 

A8a–b. The streamlining provision will be included in the Tier 3 proposal, which 

clearly has been delayed beyond December of 2011. We are continually involved in 

a process of reviewing and updating our existing regulations to consider new information and to respond to changing circumstances. Sometimes these regulatory updates occur through stand-alone rulemakings, and sometimes for efficiency we include them with other major rulemakings, such as the Tier 3 rule. As we began the 

Tier 3 rulemaking process, we sought input from industry not only on potential Tier 
69 

3 vehicle emission and fuel standards, but also on aspects of our current regulations 

that could benefit from technical corrections, clarifications, and streamlining. The oil 

and auto industries both responded with a number of items that were candidates 

for updating. We ourselves identified a number of other areas. We are committed 

to following through with streamlining provisions as part of the Tier 3 proposal. 

Q9. EPA has stated it has data that demonstrates a reduction in sulfur in gasoline 

from 30 ppm to 10 ppm will result in substantive reductions in nitrogen oxide 

emissions and decreased ozone formation. Yet, EPA has not provided data to 

support this position. Please produce the evidence to show that reductions in sulfur from 30 ppm to 10 ppm will result in substantive reductions in nitrogen oxides and atmospheric ozone formation. 

A9. There is a large body of public literature on research which has shown significant impacts of gasoline sulfur on vehicle emissions. This will be included in the 

docket at the time of the Tier 3 proposal, along with our own emission testing and 

inventory and air quality modeling to support the potential Tier 3 sulfur standards. 

Q10. Mr. Hilbert’s testimony detailed the results of the DOE-funded study on the impacts of E15 on marine engines, essentially finding that E15 will severely damage if not destroy these engines. What is your message to the millions of boat 

owners that now risk severe engine damamge (and potentially safety issues) as 

a result of running on E15? And is EPA doing anything beyond the labeling 

mandate to assist boat owners and others at risk from misfueling? 

A10. Based on our engineering assessment that marine and other nonroad engines, 

vehicles, and equipment (nonroad products) are generally equipped with less sophisticated emission controls that may not accommodate E15, EPA denied the waiver 

for all of those nonroad products, as well as for all motorcycles and heavy-duty gasoline-fueled engines and vehicles. Thus, E15 is not approved for use in these engines 

and vehicles. EPA’s assessment was confirmed for marine engines by the recent report you cite from the National Renewable Energy Laboratory. The NREL study 

was conducted on an engine durability cycle designed to stress engines, and the engines used elevated ethanol levels throughout testing. We have no evidence that occasional misfueling would destroy engines. The main concern is habitual misfueling, 

most likely happening accidentally if there were no labeling requirement. 

The partial waivers EPA granted to E15 include conditions that require E15 producers to implement misfueling mitigation measures, and a final rule EPA issued 

in June requires that E15 producers and marketers take several specific steps, including fuel pump labeling, to help minimize the potential for misfueling. We based 

the misfueling mitigation requirements on similar requirements that proved successful in transitioning the marketplace to ultra-low sulfur diesel (ULSD) fuel. In 

the E15 misfueling mitigation rulemaking, we also noted that E15 marketers may 

supplement the required labels with signs or other means of communication that 

provide additional information appropriate for their customers. In addition, EPA described the importance of an industry-led public outreach and education campaign 

like that undertaken for ULSD. Development of an E15 outreach and education 

campaign is now underway, and representatives of many stakeholders, including 

marine engine manufacturers, are participating, as is EPA. The Agency is committed to working with stakeholders to monitor the entry of E15 into the marketplace and the effectiveness of misfueling mitigation efforts so that we many address 

any issues that arise on a timely basis. 

Q11. I understand that EPA will soon publish an annual rulemaking which will include an assessment of the cellulosic industry prospects for 2012. Will EPA’s 

methodology in assessing the cellulosic standard prospects for 2012 incorporate 

lessons learned from the previous year’s assessment in order to weed out the 

factors that caused EPA’s projections to significantly overestimate the amount 

actually produced? 

A11. The statute specifies that EPA is to project the volume of cellulosic biofuel 

production, in consideration of the projections from the Energy Information Administration, for the upcoming year and must base the cellulosic biofuel standard on 

that projected volume if it is less than the applicable volume set forth in the Act. 

Since these evaluations are based on evolving information about emerging segments 

of the biofuels industry, and may result in the applicable volumes differing from 

those in the statute, we believe that it is appropriate to establish the applicable volumes through a notice-and-comment rulemaking process. In making this determination, EPA did consider all relevant factors, including historical production trends. 
70 

Q12. The National Academy of Sciences report entitled ‘‘Renewable Fuel Standard: 

Potential Economic and Environmental Effects of U.S. Biofuels Policy’’ found 

that the RFS standards are unlikely to be met absent a surprise technological 

breakthrough or policy change. We are about to enter a dramatic ramp-up in 

required biofuel production due to the RFS—billions of additional gallons of 

biofuels that the National Academy says we we won’t be able to produce. Does 

EPA have the authority to downwardly revise the overall RFS and will EPA 

exercise that authority? 

A12. Under RFS2, if the projected volume of cellulosic biofuel production is less 

than the applicable volume specified in the Act, EPA must lower the applicable volume used to set the annual cellulosic biofuel percentage standard to the projected 

volume of production. When we lower the applicable volume of cellulosic biofuel in 

this manner, we are also authorized to lower the applicable volumes of advanced 

biofuel and/or total renewable fuel by the same or a lesser amount. EPA has lowered 

the volumes of cellulosic the past two years, but has not lowered the total advanced 

or total renewable fuel volume standards because we anticipate that non-cellulosic 

advanced biofuels will be available in adequate supply to meet these standards. If, 

however, in the future, as the advanced volume mandate increases, our analysis indicates insufficient volumes of non-cellulosic advanced biofuels will be available, the 

Agency could exercise its authority to lower by the same or a lesser amount the 

total advanced and total renewable fuel volumes. 

Further, section 211(o)(7) of the Clean Air Act allows the Administrator of EPA, 

in consultation with the Secretaries of Agriculture and Energy, to waive the requirements of the national renewable fuel standard, in whole or in part, if the Administrator determines, after pulic notice and opportunity for public comment, that implementation of the RFS requirements would severely harm the economy or environment of a State, a region, or the United States. 

Questions Submitted by the Chairman of the House Committee 

on Science, Space, and Technology, Representative Ralph M. Hall 

Q1. In response to my letter dated July 25, 2011, Assistant Administrator Gina 

McCarthy stated that the Regulatory Impact Analysis (RIA) to the 2008 Ozone 

NAAQS standard indicated that Tier 3 tailpipe standards for new light-duty vehicles were needed to attain the standard. However, the RIA only mentions improved catalyst designs to achieve Tier 3 tailpipe standards for NO2 of 0.02 

grams/mile, and it is silent on the need for additional controls on fuel properties. Can EPA cite where it states in the RIA that additional controls on fuel 

properties are needed? Can EPA demonstrate that this standard cannot be met 

with gasoline with an average sulfur content of 30 ppm, the current standard? 

A1. The Ozone NAAQS RIA did not specifically mention sulfur control. However, 

EPA has determined that in order for vehicle manufacturers to achieve more stringent NO2 tailpipe standards, they will need to employ advanced catalyst designs. 

These advanced catalyst designs are only effective when coupled with lower sulfur 

concentrations in fuel. In developing the Tier 3 vehicle standards, which will be 

based on improved catalyst designs, we have consistently looked at the vehicle and 

its fuel from a systems approach, such that the improved catalyst design and gasoline sulfur control are looked at together. Any proposal to reduce sulfur levels will 

include a demonstration of the need for lower-sulfur gasoline to enable the vehicle 

tailpipe standards contemplated in the NAAQS RIA. 

Q2. In September, EPA published a preliminary review of recent ozone data and 

identified eight new areas that would be in non-attainment with the 2008 

NAAQS standard. For the five areas outside California that would presumably 

benefit from a lower sulfur standard, what percent would reach attainment (due 

to the continued penetration of vehicles certified to Tier 2, which is still being 

implemented) before 2017, when the Tier 3 standards would presumably begin 

to take effect? 

A2. EPA’s preliminary review of recent ozone data, included in a September 22, 

2011, memo from Gina McCarthy to the EPA Regional Air Division Directors, found 

that 52 areas monitor air quality that exceeds the 2008 ozone NAAQS. According 

to the memo, EPA’s modeling indicates that approximately half of the 52 hypothetical nonattainment areas would attain the NAAQS by 2015 as a result of rules 

already in place. The memo goes on to say that Tier 3 vehicle and fuel standards, 

as well as other stationary source rules under development, ‘‘will ensure steady forward progress to clean up the Nation’s air and protect the health of American fami-
71 

lies, while minimizing and in many cases eliminating the need for States to use 

their scarce resources on local actions.’’ 

Q3a–c. It has come to the Committee’s attention that there is a concern regarding 

certain blends of biodiesel, specifically, above five percent or B5. There have 

been reports in some States of diesel vehicles breaking down to blends of 11 

percent or more. On the gasoline side of the fuels equation, EPA establishes 

a certification fuel and requires quality control standards. (a) Is there a similar certification fuel for diesel? (b) What quality controls does EPA have to 

ensure biodiesel meets appropriate specifications? (c) Since the use of biodiesel is a federal mandate, why are the States the only ones involved in ensuring the quality of biodiesel fuel? 

A3a–c. (a) Biodiesel (B100) for use in motor vehicles is required to be registered 

under 40 CFR 79 as a diesel fuel. As part of registration, in accordance with the 

Clean Air Act, diesel fuel is also required to be ‘‘substantially similar’’ to the diesel 

fuel used to certify vehicles to emissions standards, or the fuel must have received 

a waiver approved under 211(f) of the Clean Air Act. However, we have not defined 

‘‘substantially similar’’ for diesel, so we rely on the fuel meeting the ASTM D6751 

standard for biodiesel or to be waived under the authority in 211(f) before it can 

be registered. We believe that biodiesel meeting ASTM D6751 is ‘‘substantially similar’’ to diesel certification fuel. 

(b) EPA requires the biodiesel manufacturer to present a certificate of analysis 

showing that the biodiesel meets the industry quality standard as noted above. 

(c) EPA’s Office of Enforcement and Compliance Assurance conducts random and 

directed inspections of fuel production and dispensing facilities TKTKTK for compliance with our requirements for renewable fuels and gasoline and diesel fuel. 

Questions Submitted by Representative Randy Neugebauer 

Q1. The refining industry is already heavily regulated. Additional regulations, such 

as Tier 3, may cause some U.S. refineries to close. Has EPA addressed this 

issue? What does EPA believe will happen to gasoline supply in the case of U.S. 

refinery closures? How would higher gasoline imports be helpful to achieve energy security? 

A1. There are many factors that contribute to the closure of refineries over time. 

The Energy Information Administration (EIA) data show that since 1982 there have 

been 154 net refinery closures as the refining industry, like any other industry, has 

continued to undergo the natural process of rationalization as it matures. Smaller, 

less efficient facilities have been replaced by larger facilities. During the period from 

2003 to 2011, when the highway and Nonroad Ultra-Low Sulfur Diesel programs, 

Tier 2 gasoline sulfur control, gasoline benzene control, were all phasing in, EIA 

data posted on its Web site show a net of just two closures of refineries that were 

producing transportation fuels, far fewer than during any previous period. During 

this same time, the average size of U.S. refineries increased from 113,000 barrels 

per day to 123,000 barrels per day, and total U.S. refining capacity increased by six 

percent. In each and every rulemaking, we have provided considerable lead time, 

phase-in flexibility, and, as necessaary, case-by-case refinery economic hardship relief to ensure our regulations were not causing refinery closures. We have processed 

at least a dozen individual hardship applications to date. During these hardship discussions, not one company has ever said that they were closing because of our 

standards. 

For these reasons, we are also confident that the Tier 3 regulations would not 

cause refinery closures. We are once again developing the program with considerable lead time, phase-in flexibility, and case-by-case hardship relief to minimize the 

impacts. We are aware of the results of a study by Baker & O’Brien for API suggesting the potential for four to seven refinery closures. However, this study did not 

model the Tier 3 program, but rather fuel scenarios from a previous Automobile Alliance study. Furthermore, a prior Baker & O’Brien study for API for the ultra-low 

sulfur nonroad diesel proposal back in 2003 contained similar dire projections of as 

many as 12 refinery closures and dramatic reductions in diesel fuel production, 

which would result in a need to import 640,000 barrels per day of diesel fuel. However, when we analyzed what actually transpired between 2005 and 2010 when the 

highway and nonroad diesel fuel programs phased in, refineries did not close; diesel 

fuel and distillate production did not decline. Some U.S refineries are competing favorably with the rest of the world, although some refiners on the East Coast exposed to heavy competition from product imports and from the Gulf Coast refiners 

have recently closed. 
72 

Q2. The EPA was required to conduct an anti-backsliding study by the summer of 

2009 to examine the potential adverse air quality impacts of renewable fuel 

mandates. It is fairly clear that this report was intended to precede additional 

regulations, as its findings will be crucial to informing new regulatory decisions. 

However, the EPA has said it will announce the details of the study along with 

your Tier 3 regulations. Why has the EPA ignored the Congressional intent for 

the purpose and schedule of this study and subsequent regulations? How can the 

Agency justify promulgating Tier 3 rules without first publishing the anti-backsliding study? 

A2. The primary driver for the development of the Tier 3 vehicle and fuel standards is the need for further control measures to help areas that aren’t meeting air 

quality standards to achieve and maintain them and therefore protect public health. 

There are over 144 million people living in areas that are exceeding these standards. The EPA is developing Tier 3 standards for light-duty vehicles and their fuels 

using its general authority under Clean Air Act sections 202(a) and 211(c). The Tier 

3 standards under development are not intended to be an anti-backsliding control 

strategy but instead are justified on their own as an important strategy to address 

ozone and other air quality problems. 

We are also in the process of carrying out the anti-backsliding study as required 

under Clean Air Act sections 211(q) and 211(v) to assess the emission and air quality impacts resulting from the increased renewable fuel volumes required by Congress. The anti-backsliding study and Tier 3 overlap in some technical areas, as 

they both consider the impacts of fuels and vehicles on emissions, and both actions 

will utilize an assessment of how renewable fuels affect vehicle emission. While they 

are designed for different purposes, this technical overlap is why we are conducting 

the anti-backsliding study in the same time frame as our Tier 3 proposal. However, 

the Agency would need to move forward with Tier 3 standards with or without the 

anti-backsliding study. 

Q3. Could you please detail options other than Tier 3 EPA assessed, if any, that 

could result in meeting the 2009 Ozone National Ambient Air Quality Standards 

(NAAQS)? Did EPA exhaust all other possiblities that could help us meet those 

standards, such as vehicle catalyst modifications? 

A3. The Regulatory Impact Analysis (RIA) for the 2008 ozone NAAQS modeled a 

variety of potential control measures that would help areas attain the NAAQS, including controls on stationary, area, onroad mobile and nonroad mobile sources. The 

Tier 3 vehicle standards represent the ‘‘improved catalyst design’’ that is discussed 

in that RIA. In the analysis done for the RIA, all of these measures combined were 

necessary to bring areas into attainment with the 2008 NAAQS. 

Q4. What is EPA’s end goal with emissions? Do you believe that emissions should 

ultimately be entirely eliminated? For example, should sulfur levels reach zero 

parts per million? At what point are we at final and acceptable levels of emissions? 

A4. EPA’s goal, as established by the Clean Air Act, is for all Americans to have 

air quality that meets health-based standards. The Clean Air Act requires that EPA 

review the health-based air quality standards (such as the ozone NAAQS) every five 

years to ensure that the standards are requisite to protect the public health. Meeting the health-based air quality standards requires a joint effort by the States and 

EPA, through a combination of nationwide rules passed by EPA and local rules 

passed by State and local air quality management agencies. 

Questions Submitted by Ranking Member Brad Miller 

Q1. Ms. Oge, my colleagues and I are very worried aobut the economic crisis in the 

country. Mr. Greco and Mr. Williams both claim in their testimony that oil refineries will have to close because of the not-yet-proposed Tier 3 standard. The 

DOE study that Mr. Williams mentioned in his testimony did note that the ‘‘cost 

of compliance contributed to economic stresses that resulted in the shutdown of 

66 refineries from 1990 through 2010,’’ but the report did not state that compliance costs were the ‘‘significant’’ factor as Mr. Williams has stated. It seems to 

me there are a number of factors that could have contributed to the closure of 

refineries. What is your response to the statement by NPRA that EPA’s rules 

have been a significant factor in the closure of 66 refineries since 1990? 

A1. There are many factors that contribute to the closure of refineries over time. 

The Energy Information Administration (EIA) data show that since 1982 there have 

been 154 net refinery closures as the refining industry, like any other industry, has 
73 

continued to undergo the natural process of rationalization as it matures. Smaller, 

less efficient facilities have been replaced by larger facilities. During the period of 

2003 to 2011 when the Highway and Nonroad Ultra-Low Sulfur Diesel programs, 

Tier 2 gasoline sulfur control, gasoline benzene control, and the renewable fuel 

standards were all phasing in, EIA data posted on its Web site shows a net of just 

two closures of refineries that were producing transportation fuels, far fewer than 

during any previous period. During this same time, the average size of U.S. refineries increased from 113,000 barrels per day to 123,000 barrels per day, and total 

U.S. refining capacity increased by six percent. In each and every rulemaking, EPA 

has provided considerable lead time, phase-in flexibility, and (as necessary) case-bycase refinery economic hardship relief to ensure our regulations were not causing 

refinery closures. We have processed at least a dozen individual hardship applications to date. During these hardship discussions, not one company has ever said 

that they were closing because of EPA standards. 

For these reasons, we are also confident that the Tier 3 regulations, as well as 

the refinery sector rulemaking, will not cause refinery closures. For the Tier 3 rule, 

we are once again developing the program with considerable lead time, phase-in 

flexibility, and case-by-case hardship relief to minimize the impacts. We are aware 

of the results of a study by Baker & O’Brien for API suggesting the potential for 

four to seven refinery closures. However, this study did not model the Tier 3 program but rather fuel scenarios from a previous Alliance study. Furthermore, a prior 

Baker & O’Brien study for API for the ultra-low sulfur nonroad diesel proposal back 

in 2003 contained similar dire projections of as many as 12 refinery closures and 

dramatic reductions in diesel fuel production, which would result in a need to import 640,000 barrels per day of diesel fuel. However, when we analyzed what actually transpired between 2005 and 2010 when the highway and nonroad diesel fuel 

programs phased in, refineries did not close; diesel fuel and distillate production did 

not decline. Some U.S. refineries are competing favorably with the rest of the world, 

although some refiners on the East Coast exposed to heavy competition from product imports and from Gulf Coast refiners have recently closed. For the refinery sector rulemaking, we do not anticipate any refinery closures as a result of stationary 

source regulations. In line with the above discussion, refinery closures have resulted 

from such significant drivers as changes in demand for refined petroleum products, 

the addition of capacity in emerging markets, and the decrease in the price of other 

fuels (i.e., natural gas), not from regulating fuel quality. 

Q2. When did EPA start considering Tier 3 standards, and why? 

A2. EPA is continuously assessing motor vehicle emissions and how they affect air 

quality and public health, and also the development and application of vehicle and 

emission control technologies. As part of the regulatory impact analysis for the 2008 

ozone NAAQS, we identified tighter vehicle standards as a control measure that 

would help areas attain the standard. We have been planning for such standards 

since that time. 

Emissions from motor vehicles and their fuels contribute to public health issues 

that exist currently and are projected to continue in the future. Motor vehicles are 

an important source of the compounds that form ozone, particulate matter (PM), 

and nitrogen dioxide (NO2). State and local areas need federal measures to reduce 

these motor vehicle emissions in areas where these emissions are a significant factor 

contributing to nonattainment of the health-based air quality standards. As EPA is 

moving forward to implement the 2008 ozone standard, we project that about half 

of the expected 52 nonattainment areas will need additional emission reduction— 

either from specific stationary sources of pollution or from motor vehicles—in order 

to attain and maintain the public health standard. 

Federal measures to reduce motor vehicle emissions are a cost-effective strategy 

for attaining public health standards. As the States have been telling us (e.g., the 

National Association of Clean Air Agencies [NACAA] and the Northeast States for 

Coordinated Air Use Managment [NESCAUM]), without new federal vehicle standards, areas may need to adopt other controls on industrial sources or small businesses that are more costly. 

Q3. Why was the National Association of Clean Air Agencies’ (NACAA) cost estimate 

for a potential Tier 3 fuels program so much lower than API’s estimate of costs 

of potential fuel controls? How do these compare to what EPA is considering? 

A3. One of the primary reasons is that the NACAA cost estimate was based on 

an analysis of the potential Tier 3 standards, whereas the API cost estimate was 

of fuel scenarios from a previous Automobile Alliance study, the least stringent of 

which is still more stringent than what EPA is considering for Tier 3. Beyond this, 

the API study made several conservative assumptions which tended to inflate the 
74 

costs and impacts. As discussed in the response to question 1, this is consistent with 

prior studies’ performance for API by the same contractor. 

Q4. What technology advancements in alternative transportation fuels are currently 

being reviewed at EPA? Could these fuels impact the ability of the country to 

meet the RFS? 

A4. EPA continues to evaluate new fuels and new technologies as part of its responsibilities to qualify new renewable fuel pathways under the RFS program. 

There are many fuels that offer the potential for use in meeting the RFS volume 

standards. Many fuels have already been approved and new ones are being approved on an ongoing basis. Just recently, EPA issued a direct final action to identify additional fuel pathways that the Agency determined meet the biomass-based 

diesel, advance biofuel, or cellulosic biofuel life cycle greenhouse gas (GHG) reduction requirement under RFS2. This rule, when finalized, will approve biofuels produced from camelina oil, energy cane, giant reed, and napier grass. It also includes 

an evaluation of renewable gasoline, biodiesel produced through alternative processing, and clarifies our definition of renewable diesel to explicitly include jet fuel. 
75 

1 Clean Air Act, 42 U.S.C. § 7545(f)(1)(B) (2010) (emphasis added). 2 Clean Air Act, 42 U.S.C. § 7545(f)(4) (2010) (emphasis added). 3 Id. 

Responses by Dr. Jay Kesan, Professor and H. Ross and 

Helen Workman Research Scholar and Program Leader, 

Biofuel Law and Regulation Program, Energy Biosciences Institute, 

University of Illinois College of Law 

Questions Submitted by Chairman Andy Harris 

Q1. In your view, did EPA adequately follow the Clean Air Act in granting partial 

waivers for E15? 

A1. § 211 of the Clean Air Act states: 

• ‘‘Effective upon November 15, 1990, it shall be unlawful for any manufacturer 

of any fuel or fuel additive to first introduce into commerce, or to increase the 

concentration in use of, any fuel or fuel additive for use by any person in motor 

vehicles manufactured after model year 1974 which is not substantially similar to any fuel or fuel additive utilized in the certification of any model year 

1975, or subsequent model year, vehicle or engine under section 7525 of this 

title.’’ 1

• ‘‘The Administrator, upon application of any manufacturer of any fuel or fuel 

additive, may waive the prohibitions established under paragraph (1) or (3) of 

this subsection or the limitation specified in paragraph (2) of this subsection, 

if he determines that the applicant has established that such fuel or fuel additive or a specified concentration thereof, and the emission products of such 

fuel or fuel additive or specified concentration thereof, will not cause or contribute to a failure of any emission control device or system (over the useful life of the motor vehicle, motor vehicle engine, nonroad engine or 

nonroad vehicle in which such device or system is used) to achieve compliance by the vehicle or engine with the emission standards with respect to 

which it has been certified pursuant to sections 7525 and 7547(a) of this title. 

The Administrator shall take final action to grant or deny an application submitted under this paragraph, after public notice and comment, within 270 days 

of the receipt of such an application.’’ 2

Sub-Issues Raised by Rep. Andy Harris 

Reliance on U.S. DOE Testing and Data by EPA 

In your question, you state the following: 

• In discussing EPA’s decision to grant a waiver for mid-level ethanol blends in 

a recent article, you stated that the Clean Air Act ‘‘language makes it perfectly 

clear that the fuel waiver applicant bears the burden of establishing that the 

waiver fuel will not negatively affect vehicle and engine emissions control systems. Nonetheless, when the EPA conditionally granted’’ the E15 waiver, ‘‘it relied almost exclusively on data supplied by the U.S. Department of Energy as 

opposed to data and analysis submitted by the waiver applicants.’’ 

These excerpts are from an article of mine published in Global Change Biology 

Bioenergy. 

A. Arguments Against EPA’s Action 

The language of the CAA explicitly states that the EPA should not grant a fuel 

waiver unless ‘‘the applicant has established’’ that the waiver fuel will not adversely 

affect the ability of emission control systems to achieve compliance with EPA’s emissions standards. 3 Yet when EPA conditionally granted the E15 Waivers, it relied 

primarily on testing conducted by the U.S. DOE. Specifically, when the EPA published its first decision regarding E15, it stated: 

• Growth Energy did not provide the necessary information to support a full 

waiver in several key areas, especially long-term durability emissions data necessary to ensure that all motor vehicles, heavy-duty gasoline highway engines 

and vehicles, highway and off-highway motorcycles, and nonroad products 

would continue to comply with their emission standards over their full useful 

life. In 2008, DOE began emissions durability testing on 19 Tier 2 motor vehicle 

models that would provide this data for MY2007 and newer light-duty motor 
76 

4 U.S. Environmental Protection Agency, Partial Grant and Partial Denial of Clean Air Act 

Waiver Application Submitted by Growth Energy To Increase the Allowable Ethanol Content 

of Gasoline to 15 Percent; Decision of the Administrator, 75 Fed. Reg. 68094, 68095 (Nov. 4, 

2010) (emphasis added) [hereinafter E15 Waiver I]. 5 Id. at 68096-97. 6 Id. at 68097. 7 Id. at 68095. 8 Clean Air Act, 42 U.S.C. § 7545(f)(4) (2010) (emphasis added). 9 See id. 10 See id. 11 Id. 12 Clean Air Act, 42 U.S.C. § 7545(f)(4) (2006). 

vehicles (‘‘DOE Catalyst Study’’). Consequently, the Agency delayed a decision until the DOE test program was completed for these motor vehicles in September 2010. EPA reached its decision on the waiver request based 

on the results of the DOE Catalyst Study and other information and test data 

submitted by Growth Energy and in public comments. EPA also applied engineering judgment, based on the data in reaching its decision. 4

Additionally, when EPA summarized its findings with respect to the fuel effects 

it traditionally analyzes in considering fuel waivers (i.e., durability/long-term exhaust emissions, immediate exhaust emissions, evaporative emissions, materials 

compatibility, and driveability and operability), it repeatedly relied on the ‘‘DOE 

Catalyst Study’’ and pointed out the shortcomings of the data submitted by the applicant. 5 Moreover, when EPA deferred its decision on model years 2001–2006 lightduty vehicles, it again referred to ongoing DOE testing and stated that ‘‘EPA expects to make a determination for these motor vehicles shortly after the results of 

DOE testing is available.’’ 6 While the EPA’s decision pays some attention to the notion of relying on ‘‘test data submitted by Growth Energy’’ (amongst other sources), 7

it remains abundantly clear that the data submitted by the applicant, when standing alone, was insufficient to justify granting the E15 Waivers. As such, the applicant did not establish that E15 would not adversely affect emissions control systems. Since the CAA only authorizes the EPA to grant a fuel waiver after the Administrator ‘‘determines that the applicant has established’’ that the waiver fuel will 

not adversely affect emissions control systems, 8 the Administrator may have abused 

her discretion and acted in an arbitrary and capricious manner in conditionally 

granting the E15 Waivers. 

B. Arguments in Support of EPA’s Action 

As an initial matter, since the CAA requires the Administrator of EPA to 

‘‘determine[]’’ whether the requisite burden has been established before granting a 

fuel waiver, the statute clearly envisions the exercise of agency discretion. 9 Although the CAA makes it clear that the applicant ultimately bears the burden of 

proof in seeking a fuel waiver, it says nothing about what types of information EPA 

is permitted to rely on in reaching its decision. 10 Additionally, the CAA explicitly 

provides that EPA must engage in ‘‘public notice and comment’’ prior to issuing a 

fuel waiver decision. 11 If EPA is not permitted to rely on information gathered 

through public notice and comment (i.e., information not supplied by the applicant), 

then the process is pointless. Moreover, the E15 Waivers provide a prime example 

of why EPA should be permitted to rely on information other than that submitted 

by the applicant. If, for example, the CAA were interpreted as requiring EPA to 

deny the E15 Waivers because the applicant itself had failed to submit enough data 

to establish that the waivers should be granted, this would not have altered the results of the DOE testing, and the applicant would likely resubmit its application 

based on the DOE results, and EPA would be forced to begin the public notice and 

comment process all over again. It is clearly a more efficient use of resources for 

the EPA to base its fuel waiver decisions on all relevant information that is brought 

to light via the public notice and comment period. Finally, the CAA’s reference to 

the fact that the applicant must establish that the waiver fuel will not adversely 

affect emissions control systems, could be explained as a hold-over from the waiver 

provision’s previous version that did not require public notice and comment. 12 Since 

the previous wording of the waiver provision did not require notice and comment, 

this language was likely originally included as a means to specify that EPA was not 

required to establish the merits of a fuel waiver (i.e., the EPA’s role is to merely 

make a decision based on information submitted by the applicant). As the CAA now 

explicitly requires public notice and comment, it would be an absurd result to interpret the waiver provision as precluding the granting of a waiver when the applicant 
77 

fails to establish the requisite burden on its own but sufficient information is gathered from other public sources. 

C. Explanation of the Quoted Excerpts From Our Article 

The quoted statement from our article is presented out of context in Representative Harris’ question. In our article, the statement is preceded by noting that ‘‘[i]f 

we unpack the CAA’s fuel waiver language, some important and possibly misleading 

ideas emerge.’’ As this article was intended for a non-legally trained audience, this 

portion of the paper was intended to compare and contrast the way a non-lawyer 

would read the plain language of the CAA with the way in which EPA administers 

the fuel waiver process. In doing so, we remain completely agnostic as to whether 

or not the EPA’s approach is proper. 

In another article of mine, Making Regulatory Innovation Keep Pace with Technological Innovation, we again mention this issue in an agnostic manner, but go on 

to opine that if the EPA continues to view DOE testing as the gateway to fuel waiver approval, then it would be beneficial for the DOE to begin conducting tests on 

emerging types of biofuels (e.g., biobutanol). 

Conditionally Granting the E15 Waiver for Some Vehicles 

and Denying It for Other Vehicle/Engine Types 

(i.e., conditionally granting a ‘‘Partial Waiver’’) 

In your question, you state the following: 

• You also noted that EPA’s decision to partially approve the waiver contradicted 

the Clean Air Act language that the ‘‘fuel has no adverse effects on the emissions control system in a variety of vehicle and engine types.’’ 

These excerpts are from an article of mine published in Global Change Biology 

Bioenergy. 

• A. Arguments Against the EPA’s Authority to Conditionally Grant a ′′Partial 

Waiver′′ (Quoted directly from U.S. Environmental Protection Agency, Partial 

Grant and Partial Denial of Clean Air Act Waiver Application Submitted by 

Growth Energy To Increase the Allowable Ethanol Content of Gasoline to 15 

Percent; Decision of the Administrator, 75 Fed. Reg. 68094, 68143–44 (Nov. 4, 

2010) (internal citations omitted)). 

‘‘As stated in EPA’s notice for comment on the E15 waiver request, a possible outcome after the Agency reviewed the record of scientific and technical information 

may be an indication that a fuel up to E15 could meet the criteria for a waiver for 

some vehicles and engines but not for others. In this context, the Agency noted that 

one interpretation of section 211(f)(4) is that the waiver request could only be approved for that subset of vehicles or engines for which testing supports its use. We 

also stated that such a partial waiver for use of E15 may be appropriate if adequate 

measures or conditions could be implemented to ensure its proper use. EPA invited 

comment on the legal aspects regarding a waiver that restricted the use of E15 to 

a subset of vehicles or engines, and the potential ability to impose conditions on 

such a waiver. 

We received a number of comments expressing opposition to a partial waiver 

based on a lack of legal authority under section 211(f)(4). Some of those same commenters, as well as others, also stated that EPA should first conduct and finalize 

a rulemaking under section 211(c) to mitigate the potential for misfueling and limit 

the types of mobile sources for which E15 may be used. 

Many commenters pointed to the language in section 211(f)(4) and argued that the 

use of the word ‘any’ in the phrase ‘will not cause or contribute to a failure of any 

emission control device or system (over the useful life of the motor vehicle, motor 

vehicle engine, nonroad engine or nonroad vehicle in which such device or system 

is used) to achieve compliance by the vehicle or engine,’ means that if the waiver 

applicant has not established that the use of E15 meets the waiver criteria for any 

type of motor vehicle or nonroad product, then the waiver must be denied. Noting 

the statutory provision’s use of the word ‘any,’ commenters asserted that should E15 

cause or contribute to a failure of any emission control device to achieve compliance 

under any single circumstance, then the waiver applicant has not met the waiver 

criteria and the waiver must be denied in its entirety. Another commenter suggested that the word ‘any’ modifies ‘emission control device’ and that if an emission 

control device for any of the types of vehicles in the parenthetical language in section 211(f)(4) is implicated, then the waiver must be denied. Still another commenter suggested that ‘In amending section 211(f)(4) in 2007 with enactment of the 
78 

Energy Independence and Security Act, Congress expanded the types of devices for 

which an applicant must establish that a fuel or fuel additive will not cause or contribute to a failure while retaining the prohibition of causing or contributing to the 

failure of ‘any’ device. With the expansion of section 211(f)(4), EPA is directed to 

only approve a waiver if all nonroad and on- road vehicles and engines would not 

be adversely affected.’ Commenters asserted that the provision effectively required 

that there should be a ‘general purpose’ fuel. The commenters noted that EPA would 

contradict this direction if it failed to address impacts on any portion of the vehicles 

or engines. Essentially, the implication of all of these assertions is that EPA can 

only grant a waiver if all emission control devices in all types of mobile sources listed in the statute will not be adversely impacted by E15. 

We also received several comments suggesting that if EPA desires to grant a partial waiver, it must first proceed under section 211(c) with a separate and full rulemaking to analyze the costs, benefits, necessary lead time, and the technological feasibility of a partial waiver. The commenters stated that this rulemaking should also 

include an analysis of the partial prohibition and controls on the use of E15 and 

include detailed regulatory requirements to ensure adequate control measures and 

to mitigate misfueling with E15. Commenters stated that the inclusion in section 

211(f)(4) of 270 days by which EPA must act does not allow enough time to address 

all the necessary marketing and other issues and thus Congress could not have envisioned a partial waiver.’’ 

U.S. Environmental Protection Agency, Partial Grant and Partial Denial of Clean 

Air Act Waiver Application Submitted by Growth Energy To Increase the Allowable 

Ethanol Content of Gasoline to 15 Percent; Decision of the Administrator, 75 Fed. 

Reg. 68094, 68143–44 (Nov. 4, 2010) (internal citations omitted). 

• B. Argument in Support of the EPA’s Authority to Conditionally Grant a ‘‘Partial Waiver‘‘ (Quoted directly from U.S. Environmental Protection Agency, Partial Grant and Partial Denial of Clean Air Act Waiver Application Submitted 

by Growth Energy To Increase the Allowable Ethanol Content of Gasoline to 15 

Percent; Decision of the Administrator, 75 Fed. Reg. 68094, 68144 (Nov. 4, 

2010) (internal citations omitted)). 

‘‘Growth Energy and ACE stated that the Agency has the authority to grant a 

partial waiver or that EPA’s authority for a partial waiver is a permissible interpretation of CAA authority, but that the evidence suggests a waiver for all vehicles and 

engines on the road today is appropriate. 

We also received comment noting that the prohibition in section 211(f)(1) only applies to the use of any fuel or fuel additive in light-duty motor vehicles, indicating 

that the grant of the waiver of this prohibition under section 211(f)(4) is not dependent on findings with respect to nonroad products. The commenter further noted that 

although EPA has the authority and discretion to look at the effect of a fuel or fuel 

additive on nonroad products (in the context of examining impacts on motor vehicles), nothing in the statute or legislative history indicates that the amendment to 

section 211(f)(4) sought to limit EPA’s discretion for issuing a waiver for motor vehicles. In light of Congress’ decision in the Energy Independence and Security Act of 

2007 to substantially increase the Renewable Fuel Standard Program’s volume mandates, this commenter suggests that reading the word ‘any’ in section 211(f)(4) as 

amended by the 2007 Energy Act to apply to anything more than any emission control systems on the subset of motor vehicles would be at odds with Congressional 

intent. 

Regarding EPA’s authority to impose conditions on a waiver, we received comment stating that EPA has the authority to grant waivers subject to a broad range 

of conditions that ensure that the fuel or fuel additive will not cause or contribute 

to the failure of any emission control device or system. One commenter pointed to 

four of the eleven waivers EPA has issued since 1977 that have placed conditions 

on a waiver. In EPA’s first waiver decision in 1978, the Agency discussed its authority to grant conditional waivers, noting that it may grant a waiver ‘conditioned on 

time or other limitations,’ so long as ‘the requirements of section 211(f)(4) are met.’ 

This commenter also points to the legislative history of section 211(f)(4) which 

makes clear that EPA has authority to grant conditional waivers. The 1977 Senate 

Report regarding section 211(f)(4) states: ‘The Administrator’s waiver may be under 

such conditions, or in regard to such concentrations, as he deems appropriate consistent with the intent of this section.’ Senate Report No. 95–125, 95th Congress, 

1st Session 91 (1977), pg 91.’’ 

U.S. Environmental Protection Agency, Partial Grant and Partial Denial of Clean 

Air Act Waiver Application Submitted by Growth Energy To Increase the Allowable 

Ethanol Content of Gasoline to 15 Percent; Decision of the Administrator, 75 Fed. 

Reg. 68094, 68144 (Nov. 4, 2010) (internal citations omitted). 
79 

• C. The EPA’s Decision Regarding Its Authority to Conditionally Grant a ‘‘Partial Waiver’’ (Quoted directly from U.S. Environmental Protection Agency, Partial Grant and Partial Denial of Clean Air Act Waiver Application Submitted 

by Growth Energy To Increase the Allowable Ethanol Content of Gasoline to 15 

Percent; Decision of the Administrator, 75 Fed. Reg. 68094, 68144–46 (Nov. 4, 

2010) (internal citations omitted)). 

‘‘The issue before EPA is whether it is reasonable to interpret section 211(f)(4) as 

authorizing EPA to grant a partial waiver under appropriate conditions, as in today’s decision. If Congress spoke directly to the issue and clearly intended to not 

allow such a partial waiver, then EPA could not do so. However, if Congress did 

not indicate a precise intention on this issue, and we believe that section 211(f)(4) 

is ambiguous in this regard, then a partial waiver with appropriate conditions 

would be authorized if it is a reasonable interpretation. EPA has considered the text 

and structure of this provision, as well as the companion prohibition in section 

211(f)(1), and believes it is a reasonable to interpret section 211(f)(4) as providing 

EPA with discretion to issue this partial waiver with appropriate conditions. 

It is important to put section 211(f)(4) in its statutory context. The prohibition in 

section 211(f)(1) and the waiver provision in section 211(f)(4) should be seen as parallel and complementary provisions. Together they provide two alternative paths for 

entry into commerce of fuels and fuels additives. The section 211(f)(1) prohibition 

allows fuels or fuel additives to be introduced into commerce as long as they are 

substantially similar to fuel used to certify compliance with emissions standards, 

and the section 211(f)(4) waiver provision allows fuels or additives to be introduced 

into commerce if they will not cause or contribute to motor vehicles and nonroad 

products to fail to meet their applicable emissions standards. EPA’s authority to 

issue a waiver is coextensive with the scope of the prohibition—whatever is prohibited can also be the subject of a waiver if the criteria for granting a waiver are met. 

In addition, the criteria for each provision have similar goals. They are aimed at 

providing flexibility to the fuel and fuel additive industry by allowing a variety of 

fuels and fuel additives into commerce, without limiting fuels and additives to those 

products that are identical to those used in the emissions certification process. This 

flexibility is balanced by the goal of limiting the potential reduction in emissions 

benefits from the emissions standards, even if some may occur because a fuel or fuel 

additive is not identical to certification fuel or it leads to some emissions increase 

but not a violation of the standards. Together, these are indications that these provisions are intended to be parallel and complementary provisions. 

The section 211(f)(1) prohibition has evolved over time. Initially it was adopted 

in the 1977 amendments of the Act, and was much more limited in nature. It applied only to fuels or fuel additives for general use, and was also limited to fuels 

or fuel additives for use in light-duty motor vehicles. EPA interpreted this as applying to bulk fuels or fuel additives for use in unleaded gasoline. The prohibition did 

not apply to other gasoline, or to diesel fuels or alternative fuels, or to fuel additives 

that were not for bulk use. It was thus relevant only to the subset of motor vehicles 

designed to be operated on unleaded gasoline. 

In 1990 Congress amended the prohibition and broadened it. It now applies to 

‘any fuel or fuel additive for use by any person in motor vehicles manufactured after 

model year 1974 which is not substantially similar to any fuel or fuel additive utilized in the certification of any model year 1975, or subsequent model year, vehicle 

or engine.’ This extended the scope of the prohibition to apply to all gasoline, to diesel fuel, and to other fuels such as E85. However, the concept of applying this prohibition based on the relevant subset of vehicles continues. For example, a diesel fuel 

that is introduced into commerce for diesel vehicles does not need to be substantially similar to gasoline fuel or other fuels intended for non-diesel vehicles. This 

is so even though Congress used the phrase ‘substantially similar to any fuel or fuel 

additive utilized in the certification of any* * *vehicles or engine’ (emphasis supplied). Clearly Congress did not intend the use of the term ‘any’ in the prohibition 

to always mean all motor vehicles or 100% of the motor vehicle fleet. Diesel fuel 

does not need to be substantially similar to the fuel used in the certification of gasoline vehicles, and E85 does not need to be substantially similar to fuel used in the 

certification of diesel vehicles. For example, manufacturers who want to introduce 

E85 fuel or fuel additives for E85 look to the certification fuel that was used for 

the subset of vehicles that were certified for use on E85. 

In some limited cases, EPA has approved a fuel additive as substantially similar 

even when it is introduced into commerce for use in just one part of a single vehicle 

manufacturer’s product line. For example, where a fuel additive is considered part 

of the emissions control system for a vehicle model and is certified that way by the 

vehicle manufacturer, then it is not a violation of the substantially similar prohibition for manufacturers of the fuel additive to introduce it into commerce for use in 
80 

just that very small subset of vehicles, as long as it is substantially similar to the 

fuel additive used in the certification of that vehicle model. In all of these cases, 

broad to narrow subsets of motor vehicles can be considered when deciding whether 

the introduction of a fuel or fuel additive for use by that subset of motor vehicles 

is in compliance with the prohibition. 

EPA has in fact applied this construct of this provision in all of its past waiver 

decisions. EPA has previously said that it is virtually impossible for an applicant 

to demonstrate that a new fuel or fuel additive does not cause or contribute to any 

vehicle or engine failing to meet its emissions standards. Instead, EPA and the 

courts allow applicants to satisfy this statutory provision through technical conclusions based on appropriately designed test programs and properly reasoned engineering judgment. For example, the sample size in these test programs does not include all motor vehicles in the current fleet; the sample size is comprised of a statistically significant sample of motor vehicles that, once tested, will enable the applicant to extrapolate its findings and make its demonstration. EPA believes that this 

practice of focusing on a relatively small but representative subset of motor vehicles 

does not violate the statutory use of the word ‘any’ in this provision. 

Since the waiver and the substantially similar provisions are parallel and complementary provisions, this clearly raises the question of whether a waiver can also 

be based on a subset of motor vehicles meeting the criteria for a waiver. EPA believes the text and construction of section 211(f)(4) supports this interpretation. 

First, the term ‘waive’ as used in section 211(f)(4) is not modified in any way. Normally one would read this provision as a general grant of waiver authority, encompassing both partial and total waivers, as long as the waiver criteria are met. Second, the waiver criteria, like section 211(f)(1), have evolved over time. In 1977, the 

criteria were phrased as providing for a waiver when the fuel or fuel additive ‘will 

not cause or contribute to a failure of any emission control device or system (over 

the useful life of any vehicle in which such device or system is used) to achieve compliance by the vehicle with the emission standards to which it has been certified.’ 

This was not modified in the 1990 amendments. In EISA 2007, Congress amended 

the waiver criteria, providing for a waiver when the fuel or fuel additive will not 

‘cause or contribute to a failure of any emission control device or system (over the 

useful life of the motor vehicle, motor vehicle engine, nonroad engine or nonroad vehicle in which such device or system is used) to achieve compliance by the vehicle 

or engine with the emission standards to which it has been certified.’ Congress uses 

the term ‘any’ in section 211(f)(4), as it does in several places in section 211(f)(1). 

One use of the term ‘any’ was deleted in the 2007 amendments, when the parenthetical was broadened to include consideration of nonroad engines and nonroad vehicles 

as well as motor vehicles. The term ‘any,’ however, has always been paired with the 

consistent use of the singular when referring to vehicles and emissions control systems—‘the vehicle’ and the emissions standards to which ‘it’ is certified, and the ‘vehicle in which such device or system is used.’ Certainly Congress did not state that 

the applicant has to demonstrate that the fuel or fuel additive would not cause any 

devices or control systems, over the useful lives of the motor vehicles or nonroad 

products in which they are used, to fail to achieve the emissions standards to which 

they are certified. If Congress had stated that, then it would be clear, as one commenter suggests, that EPA should only grant a waiver if all emission control devices 

in all the types of mobile sources listed would not be impacted by the fuel. But Congress did not state that. 

Several aspects of section 211(f) thus support the reasonableness of EPA’s interpretation. The prohibition and the waiver provisions are properly seen as parallel 

and complementary, and the prohibition properly can be evaluated in terms of appropriate subsets of motor vehicles, notwithstanding the use of the term ‘any’ to 

modify several parts of the prohibition. This clearly raises the concept of also applying the waiver criteria to appropriate subsets of motor vehicles. ‘Waive’ is reasonably seen as a broad term that generally encompasses a total and a partial waiver, 

as well as the discretion to impose appropriate conditions. The criteria for a waiver 

also refer to ‘any’ but the entire provision does not provide a clear indication that 

Congress intended to preclude consideration of subsets of motor vehicles when considering an application for a waiver. Finally, a partial waiver gives full meaning to 

all of the provisions at issue. 

For example, in this case, granting a partial waiver means that E15 can be introduced into commerce for use in a subset of motor vehicles, MY2007 and newer lightduty motor vehicles, and only for use in those motor vehicles. For those motor vehicles, EPA is not making a finding of it being substantially similar, but E15 has been 

demonstrated to not cause or contribute to these motor vehicles exceeding their applicable emissions standards. It will also not cause any other motor vehicles or any 

other on- or off-road vehicles or engines to exceed their emissions standards since 
81 

it may not be introduced into commerce for use in any other motor vehicles or any 

other vehicles or engines. Thus, under a partial waiver, as the commenter suggested, all emission control devices in all the types of mobile sources listed will not 

be adversely impacted by the fuel. It can only be introduced into commerce for those 

vehicles and engines where it has been shown not to cause emissions problems; for 

other types of mobile sources, it cannot be introduced into commerce for use in such 

vehicles and engines. In concept, therefore, the combination of this partial waiver, 

with appropriate conditions, and partial retention of the substantially similar prohibition, has the same effect as when the criteria for a total waiver has been met— 

the fuel or fuel additive will only be introduced into commerce for use in a manner 

that will not cause violations across the fleet of motor vehicles and nonroad products. It can only be introduced into commerce for use in vehicles and engines where 

it has been shown not to cause violations of the emissions standards, and may not 

be introduced into commerce for use in other vehicles or engines. 

EPA recognizes that a partial waiver raises implementation issues regarding how 

to ensure that a fuel or fuel additive is only introduced into commerce for use in 

the specified subset of motor vehicles. The discretion to grant a partial waiver includes the authority and responsibility for determining and imposing reasonable 

conditions that will allow for effective implementation of a partial waiver. In this 

case, EPA has conditioned the waiver on various actions that the fuel or fuel additive manufacturer must take. The actions are all designed to help ensure that E15 

is only used by the MY2007 and later motor vehicles specified by the waiver. If a 

fuel or fuel additive manufacturer does not comply with the conditions, then EPA 

will consider their fuel or fuel additive as having been introduced into commerce for 

use by a broader group of vehicles and engines than is allowed under the waiver, 

constituting a violation of the section 211(f)(1) prohibition. 

EPA recognizes, as several commenters have suggested, that EPA can impose 

waiver conditions only on those parties who are subject to the section 211(f)(1) prohibition and the waiver of that prohibition. These parties are the fuel and fuel additive manufacturers. Waiver conditions can apply to them but cannot apply directly 

to various downstream parties, such as a retailer who is not also a fuel or fuel additive manufacturer. This is one reason EPA is also proposing specific misfueling mitigation measures in a separate rulemaking under section 211(c), to minimize any 

risk of misfueling. This will also facilitate compliance with certain of the waiver conditions. 

Many commenters suggested that before EPA can grant a waiver of any type 

under section 211(f)(4), the Agency must first issue a rule under section 211(c) that 

addresses the proper prohibition and control of a new fuel or fuel additive to the 

extent necessary before such fuel or fuel additive is permitted under section 

211(f)(4). However, there is no mention of timing in these two statutory provisions 

and EPA believes it appropriate to consider the merits of a section 211(f)(4) waiver 

request on its face.’’ 

U.S. Environmental Protection Agency, Partial Grant and Partial Denial of Clean 

Air Act Waiver Application Submitted by Growth Energy To Increase the Allowable 

Ethanol Content of Gasoline to 15 Percent; Decision of the Administrator, 75 Fed. 

Reg. 68094, 68144–46 (Nov. 4, 2010) (internal citations omitted). 

• D. Explanation of the Quoted Excerpts from Our Article 

Again, the quoted statement from our article is presented out of context in Representative Harris’ question. In our article, the statement is preceded by noting that 

‘‘[i]f we unpack the CAA’s fuel waiver language, some important and possibly misleading ideas emerge.’’ As this paper was intended for a non-legally trained audience, this portion of the article was intended to compare and contrast the way a 

non-lawyer would read the plain language of the CAA with the way in which EPA 

administers the fuel waiver process (i.e., the statement was not intended to suggest 

that the EPA’s approach ‘‘contradict[s]’’ the language of the CAA in a legal sense). 

In doing so, we remain completely agnostic as to whether or not the EPA’s approach 

is proper. In another article of mine, Making Regulatory Innovation Keep Pace with 

Technological Innovation, we again mention this issue in an agnostic manner, but 

go on to opine that if the EPA is willing to conditionally grant a fuel waiver for use 

in some vehicles/engines and deny it for use in others, then the applicant should 

be permitted to ex ante specify which types of vehicles/engines it is seeking a waiver 

for and thereby mitigate the costs associated with seeking a fuel waiver (i.e., negate 

the need to incur the cost of testing the waiver fuel in the types of vehicles/engines 

that are not the subject of the application. 
82 

1 Baker & O’Brien: ‘‘Potential Supply and Cost Impacts of Lower Sulfur, Lower RVP Gasoline,’’ July, 2011. 2 MathPro: ‘‘Refining Economics of a National Clean Gasoline Standard for PADDS 1–3,’’ 

June 27, 2008; MathPro: ‘‘Refining Economics of a Single Octane National Clean Gasoline 

Standard,’’ October 8, 2010; MathPro: ‘‘Refining Economics of a National Low Sulfur, Low RVP 

Gasoline Standard,’’ October 25, 2011. 

Responses by Mr. Bob Greco, Group Director for 

Downstream and Industry Operations, American Petroleum Institute 

Questions Submitted by Chairman Andy Harris 

Q1. What does API think ought to be done by the EPA to prevent the impending RFS 

‘‘trainwreck,’’ i.e., the coming encounter with the E10 blend wall and the severe 

shortage of advanced technology renewable fuels? What role could Congress 

play? 

A1. Congress should amend EISA to align the mandated biofuels volumes with the 

capacity of the existing vehicle fleet to safely use them. Congress should give authority to and require EPA to adjust the RFS requirement when the annual volume 

of any renewable fuel anticipated for meeting the RFS in any given calendar year 

exceeds that which can be reasonably produced; delivered through existing infrastructure; and consumed as determined by original equipment manufacturers’ warranties at the time of manufacture of the vehicle or engine. 

Q2. The requirements in the Energy Independence and Security Act are driving us 

into the E10 blend wall. Will EPA’s waiver to allow the use of E15 in today’s 

automobiles be of any help in averting the coming confrontation? 

A2. No, it will not. EPA prematurely waived Clean Air Act (CAA) requirements to 

allow ethanol blends of up to 15% for model year 2001 and newer cars and light 

trucks prior to the completion of comprehensive auto and oil industry studies on the 

vehicle safety, performance, and durability impacts associated with use of the new 

fuel. Should the driving public experience problems with their cars, the concern is 

that drivers could demand E0, which would make RFS compliance more difficult 

than it already is. Widespread consumer problems occurring because of the waivers 

(either misfueling non-road equipment and pre-2001 vehicle problems or 2001 and 

later model year vehicle problems) would put the entire renewable fuels program 

at risk. Even if E15 is eventually given a green light by auto manufacturers after 

completion of comprehensive research, it will take several years before E15 can be 

introduced into the marketplace due to other regulatory hurdles and necessary 

changes to retail station infrastructure. 

Q3. I understand that, in addition to the Baker & O’Brien analysis of potential Tier 

3 regulation impacts, there have also been other studies released that project 

some smaller economic effects. Could you provide some context to these studies 

and their methodologies? 1

A3. We are aware of studies conducted by the consulting firm, MathPro, which 

analyzed the refining economic impacts of prospective gasoline standards, but 

MathPro in each of these studies used methodologies that are much less rigorous 

and realistic than the Baker & O’Brien analysis. 2

The main flaws in the MathPro’s analytical approach are in the areas of modeling 

methodologies and study assumptions: 

• Capital expenditure/refinery investment: The MathPro approach does not 

account for the unique characteristics and challenges of individual refineries. 

Instead, MathPro treats an entire PADD as one large ‘‘notional’’ refinery, and 

implies that adding required refining capacity can occur at the same rate and 

economies of scale across all refineries within the PADD. This results in overoptimization and an underestimate of compliance costs. 

In contrast, the Baker & O’Brien analysis employs a stepwise approach in its refinery-by-refinery economic assessment of investment required for compliance, modeling 112 refineries on an individual basis. The Baker & O’Brien analysis, which 

allows for refineries to shut down, makes an assessment of required new and expanded capacities. 

• Treatment of natural gas liquids and refinery operation costs: The linear 

programming constraints and modeling assumptions employed by MathPro 

were unrealistic because they do not track how refineries are actually run. The 

constraints and assumptions forces the ‘‘notional’’ refinery to increase the 

amount of crude oil used to offset the volumes of gasoline lost from reducing 
83 

3 http://www.epa.gov/airtrends/nitrogen.html. 4 By 2030, this program will reduce annual emissions of NO2 by about 800,000 tons, and further reductions will be made after 2030; see: http://www.epa.gov/otaq/regs/nonroad/ 

420f08004.htm. 

RVP. In reality, refiners may consider options which include reducing production of refined products or shutting down. The MathPro approach does not allow 

for refinery shutdowns, and recent history demonstrates that individual refineries have shut down. In addition, the MathPro model does not accurately account for how the petrochemicals marketplace will react to the excess natural 

gas liquids created by reducing gasoline RVP. 

Q4. Are further reductions in the sulfur content of gasoline necessary to meet the 

2008 Ozone National Ambient Air Quality Standards (NAAQS)? 

A4. No. Nationwide concentrations of the key ozone precursor nitrogen dioxide 

(NO2) have dropped about 35% over the last 10 years. 3 Additional mobile source reductions of NO2 will occur with vehicle turnover because of existing gasoline and 

diesel fuel on-road requirements, mandated increased fuel economy standards, and 

reductions projected from recent diesel standards for off-road vehicles. 4 Stationary 

source NO2 is projected to decrease with implementation of the Cross States Air Pollution Rule and achievement of existing requirements written into State Implementation Plans to meet ozone standards. There are a variety of options to reduce the 

NO2 emissions and thereby reduce ozone, but further reductions of sulfur content 

in gasoline are not necessary to meet the 2008 ozone standards. 

Questions Submitted by Ranking Member Brad Miller 

Q1. What technology advancements have the blenders made in the four years since 

enactment of legislation mandating the current RFS to prepare for compliance 

with the standard? What technology advancements are planned for the future? 

A1. Blenders have made significant changes to ensure that 10% ethanol gasoline 

can be sold in the majority of fuel in the country to give us the best opportunity 

to meet the biofuel volumes mandated in the RFS. Gasoline suppliers (blenders) 

have increased the use of rail and truck deliveries to their terminals to accommodate the increased volumes of ethanol. Since ethanol must be stored in separate 

tanks at terminals—it cannot be moved via pipeline due to technical concerns—suppliers have installed tanks or converted them from other fuel service to store the 

ethanol. They have also installed advanced automated equipment that ensures that 

ethanol can be efficiently and accurately blended with gasoline to make a product 

that meets the specifications and State and federal requirements. 

However, as my testimony indicates, the blendwall is coming quickly, and our 

members have not been sitting idle. They have been conducting research to understand how to bring more biofuels to market. For example, research is ongoing to determine how to mitigate the technical concerns of moving ethanol in pipelines. If 

the results can be applied in areas where pipelines move product in the right direction, namely mid-continent to the east coast or to/ from marine terminals for transportation via barge, there could be improvements in efficiently moving fuel grade 

ethanol to market. But, of course, more ethanol simply exacerbates the blendwall 

problem. The technological solution is the development and commercialization of 

biohydrocarbons identical to those from petroleum sources that can be dropped into 

current petroleum products. To that end, the biofuels and oil industries continue to 

conduct research to create such a fuel. However, time is not on our side. Development of biohydrocarbons is seriously lagging and offers little promise of being available in time to avert the blendwall. 

E15 is sometimes held out to be a solution. While the Department of Energy and 

API have completed research on the ability of the existing retail gasoline station 

equipment to store and dispense gasoline with greater than 10% ethanol, the results 

of this research show that there are serious issues with using any equipment that 

is not specifically listed for a 15% ethanol fuel (E15) and the majority of equipment 

was not built for that fuel. Beyond the technical issues associated with storing/dispensing E15, suppliers and station owners have concerns regarding selling E15 to 

the consumer. Other research on the vehicle shows that some cars and trucks will 

be damaged by E15, and 14 automobile manufacturers wrote letters to Rep. Sensenbrenner that their warranties would not cover damage that resulted from a vehicle 

that was refueled with E15. Taken together, there are significant concerns associated with storing and selling a fuel that has more than 10% ethanol that may require Congressional action to mitigate these concerns. Moreover, even if the green 
84 

light were given to E15 today, the blendwall is approaching faster than the ability 

of the industry to upgrade the infrastructure needed to accommodate the huge volumes that would be required to avoid it. 
85 

Responses by Mr. David Hilbert, 

Thermodynamic Development Engineer, Mercury Marine 

Questions Submitted by Chairman Andy Harris 

Q1a–c. There have been some criticisms of the NREL report, specifically that it was 

a very limited study and tested only a few engines. (a) Are you aware of any 

plans by either the Department of Energy or EPA to conduct a larger study 

on the effects of higher ethanol fuel blends on marine engines? (b) If no other 

study is planned, are you aware of any other studies that are comparable to 

the one you conducted? (c) As an engineer, absent information beyond what 

was produced in this study, what is your opinion of the performance of marine engines running on higher ethanol blend fuels? 

A1a–c. Despite the limited nature of the testing, several issues were identified. The 

most striking example of these issues was the failed exhaust valves on the 300 HP 

supercharged four-stroke engine. The exhaust valve failure mechanism observed in 

the testing on E15 fuel was not experienced previously in the tens of thousands of 

hours of engine testing during the development and validation of this engine family 

on E0 and E10 fuel. The previous experience with the development and validation 

of the 300 HP engine family were outside the scope of this specific study, but was 

certainly taken into consideration by the Mercury Marine engineering team when 

assessing the risk presented by the different fuel. Thus, it presented a new failure 

mode due to the change in fuel. 

(a) Mercury Marine initially proposed a much more extensive program that totaled $3.8M and would have been a more comprehensive study. We were told by 

DOE and NREL that the only funds available for this testing were $300K–$400K. 

Mercury provided 50% cost sharing even though there was little incentive for us to 

do so. We are not aware of any larger studies being planned. 

(b) A comparable study was conducted by personnel at Volvo Penta at the same 

time we at Mercury Marine were doing our study. It was also funded by the Department of Energy, and it tested one engine family: a 4.3 liter sterndrive based on a 

General Motors-derived engine. The results of that study can be found at http:// 

www.nrel.gov/docs/fy12osti/52577.pdf. This study noted difficulty in starting the 

engine when operated on E15 fuel. 

(c) The study showed that the 300 HP supercharged four-stroke engine had a 

major engine component failure and an increase in certain exhaust emissions due 

to E15 fuel. The 9.9 HP four-stroke engine showed a fuel system component material compatibility problem and also an increase in certain exhaust emissions due to 

E15 fuel. The 200 HP two-stroke engine suffered the failure of a major internal engine component that relies on the fuel to carry lubricating oil to it, which calls into 

question if the ethanol portion affected the lubrication of that component. The number of problems observed in this study compared with the small sample of engines 

tested would suggest that the performance of E15 fuel was unacceptable. 

Q2. How many marine and other off-road or small engines could potentially be at 

risk of misfueling with E15? 

A2. Higher ethanol blend fuels certainly create a risk to all marine engines currently in use. Virtually none of the marine engines currently in use were ever calibrated for higher ethanol blends. As the fuel blends keep changing, at some point 

the legacy engines can no longer tolerate the fuels and will certainly exhibit an increased failure rate. In addition, materials used in the older engines were not designed to tolerate ethanol fuels, and increasing the allowable ethanol concentration 

will likely only add to the problem. 

The National Marine Manufacturers Association (NMMA) estimates there are 12 

million engine-powered marine vessels in the U.S. with about 90% being gasoline 

engine boats. As to small engines, we have seen reports from such groups as the 

Outdoor Power Equipment Institute (OPEI) that estimate that there are more than 

200 million legacy small engines in use in the United States. Other off-road and 

small engine categories should be addressed by those industries, so please defer to 

those organizations for further detail. 

Q3. What is the estimated cost of replacing small engines that may fail or be damaged when using E15? 

A3. For marine engines, outboards range from 2 HP to 350 HP and sterndrive engines range from 130 HP to over 1,000 HP. Replacement cost of individual engines 

can range from $500 to $15,000 for outboards and from $3,000 to $100,000 for 
86 

sterndrive engines. For other engine types for other engine categories, please defer 

to those organizations for further detail. 

Q4. In the event that an E15 waiver is granted for off-road vehicles as well, in response, what would the marine engine manufacturing industry be doing to ensure its products are able to run safely and reliably on this higher blend? Are 

there additional costs to making marine engines resistant to the corrosion associated with higher ethanol blends, including E15? What technological advances 

would be required? 

A4. To answer this question, I need to break this question down into several parts. 

First, I will treat the existing legacy fleet separately from newly manufactured engines. Second, I will speak to the technical difficulties, and then finally to the other 

aspects of this topic. The technical aspects will be centered around materials compatibility/corrosion resistance of the fuel system and also recalibrating the fuel system to supply the appropriate amount of fuel based on the fuel blend differences. 

There would likely be other technical challenges that would be discovered once the 

redesign process would begin, so the answer to this question is not meant to be allencompassing. 

• Legacy engines: Considering the millions of engines in the legacy fleet, there 

is no practical way to convert those legacy engines to operate on a fuel so very 

different from what they were designed to run on. To re-engineer 30∂ years 

of service parts to have proper material compatibility, corrosion protection, and 

fuel delivery is simply impractical. 

• Newly manufactured engines: Materials compatibility of the fuel system or any 

component that could come in contact with the fuel or fuel vapor (such as components that could be exposed to inadvertent contact with fuel during refueling 

or having fuel vapor cause problems) would need to be investigated and redesigned as necessary. Any type of elastomer, polymer, or sealant/adhesive must 

be subjected to ‘‘aggressive’’ ethanol blend exposure tests. Examples of these 

types of components would be gaskets, seals, o-rings, fuel hoses, etc. The ‘‘aggressive’’ ethanol blend refers to the fact that the fluid that the components are 

exposed to contains the proper chemistry to simulate real-world fuel with all of 

the contaminates, acidity, water content (including salt water), etc., that the engines will see. If the materials were found to be incompatible, more robust materials would need to be selected and then re-qualified with more bench tests 

and also running engine tests. The metal components, such as fuel reservoirs 

and fittings, must be tested for corrosion with the aggressive ethanol. If corrosion issues are found, the materials must be upgraded to metals with higher 

corrosion resistance or be coated with a corrosion-resistant coating, such as anodizing. The technology currently exists for the materials compatibility aspects, 

as evidenced by the use of Flex Fuel Vehicles in the automotive segment; however, the changes needed would likely increase the production cost of the engines. 

Mercury Marine manufactures three different types of engines sold in the USA 

that need to be considered separately when discussing fuel mixture control. The fuel 

system would need to be recalibrated to supply the appropriate amount of fuel based 

on the ethanol blend, but this would present difficulty in accounting for the range 

of fuels from E0, which is still available, to E15. The three types of engines are: 

electronically controlled four-strokes, carbureted four-strokes, and direct fuel-injected two-strokes. The main considerations for recalibrating the fuel system are exhaust emissions, engine durability due to exhaust gas temperatures (example: broken exhaust valve in original study), fuel economy, and other operating characteristics. 

Electronically controlled four-strokes offer the best potential for accepting E15 

fuel. Electronically controlled outboard engines could be modified to include an oxygen sensor in the exhaust system to compensate for different fuels. On most outboard marine engines, the exhaust system is integrally cast into the cylinder block 

and cylinder head. The inclusion of a port for an oxygen sensor would mean that 

the block and/or cylinder head casting would have to be modified. There may also 

be other components that would need to be redesigned to make room for the sensor 

protruding out of the exhaust passage, which would also increase cost. The electronic engine controllers on many outboards would need to be redesigned to account 

for the additional sensor input, as well as developing and validating the software 

to control the oxygen sensor. 

Most of outboard marine engines 30 horsepower or lower are carburated and cannot be calibrated to run optimally on E0 and E15 while still maintaining emissions 

compliance and acceptable operating characteristics. Common industry practice from 
87 

the small off-road engine manufacturers identifies a 10% ethanol blend tolerance 

window (example 0–10% or 5–15%) in which carburated engines can be calibrated. 

[See the testimony of Kris Kiser: ‘‘Statement of the Outdoor Power Equipment Institute before the Committee on Environment and Public Works— U.S. Senate,’’ April 

13, 2011]. The carburated engines cannot use an oxygen sensor since the fuel system is not electronically controlled. There is no obvious or easily implemented solution to deal with the carburated models to make them tolerant of a wide variety 

of fuel blends. The technology that would need to be developed to remedy this problem would be a closed-loop electronic fuel injection system that would be competitive 

to a carburator in terms of cost (very cost sensitive on these small engines), reliability, and ease of service. 

Direct-injected two-stroke engines pose a different challenge. The nature of the direct injected two-stroke engine causes fresh air to bypass the combustion chamber 

and go directly to the exhaust. As such, an oxygen sensor in the exhaust system 

senses this fresh air and cannot reliably control the fueling rate on this type of engine at all speeds and loads. Therefore, there is no way to adjust for differences in 

fuel blends with an oxygen sensor in this type of engine. Some other means to provide sensor input into a closed-loop fuel controller to adjust for fueling differences 

would need to be developed. 

To estimate the total cost to redesign the current product offering, retool the necessary changes, validate the changes with analysis and physical testing, and move 

into production is a complete study in and of itself. The $3.8 million proposal mentioned in the answer to question 1.a. above reflects the scope of the preliminary investigation into this topic. The end result could be hundreds of millions of dollars 

of investment and lost opportunities to develop other more competitive products. 

The end result would be products that cost more to produce due to the higher-grade 

materials needed and more sophisticated control systems. 

• Other considerations: When considering new engine installations into new 

boats, in many cases the boat hull and engine are from different manufacturers. 

The boat hull often contains a large portion of the fuel system such as the fuel 

tank, fuel lines, etc. The boat manufacturers would also have to validate the 

fuel systems on new boats with E15 fuel. 

Another point to consider is that many new marine engines are sold to replace 

worn-out engines in existing boat hulls. Even if the new engines are compatible with 

E15 fuel, the legacy boat in which they are installed may not be. There have been 

documented cases of older boat fuel systems which are incompatible with ethanol 

blended fuels. The legacy boat fuel system would need to be reevaluated to see if 

there are material compatibility issues. This would further exacerbate the issues of 

misfueling if there were some marine engines approved for E15 and others that 

were not and also some boat fuel systems which are approved for E15 and others 

that are not. 

Q5. It has been suggested that the endurance and emissions problems you witnessed 

when testing marine engines with E15 would not occur with advanced biofuels. 

Why is that the case? What properties of advanced biofuels make them more 

suitable for use in a marine engine as compared with ethanol? Are there any 

studies available to support this suggestion? 

A5. What are being proposed as ‘‘advanced biofuels’’ are synthetically made fuels 

that are nearly chemically identical to current gasoline, diesel, and jet fuels. As 

such, they would not have the higher oxygen content of ethanol fuels, would not 

cause enleanment of the engine which leads to the increased engine operating temperature, would not have the material compatibility issues, and not absorb water. 

All proposed fuels require extensive testing, but the characteristics proposed for 

these ‘‘drop-in’’ fuels suggest that they will behave very much like the petroleum 

fuels they would replace. 

Questions Submitted by Subcommittee Ranking Member Brad Miller 

Q1. Please provide your name and employing organization(s). 

A1. David Hilbert—Thermodynamic Development Engineer, Mercury Marine Division of Brunswick Corporation. 

Q2a. Are you an officer or employee of, or otherwise compensated by, any other organization that may have an interest in the topic of this hearing? 

A2a. No 
88 

Q3a. In the last three calendar years, including this one, have you been a registered 

lobbyist? 

A3a. No 

Q4. If you have worked as an attorney, contractor, consultant, paid analyst, or in 

any other professional services capacity, please provide a list of all of your firm’s 

clients who you know to have an interest in the subject matter of this hearing. 

These should be clients that you have personally worked with in the last three 

calendar years (including the present year). Provide the name of the client, the 

matter on which you worked and the date range of that work. If there was a 

deliverable, please describe that product. 

A4. I was the technical leader of a test of E15 blend fuel in three different Mercury 

outboard engines. These tests were conducted at the Mercury Marine test facility 

in Fond du Lac in 2010–2011 by Mercury personnel under contract to the U.S. Department of Energy and coordinated by the National Renewable Energy Lab 

(NREL). The final report was released by the Department of Energy in October 

2011. This test was entitled, ‘‘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,’’ and it formed the basis for my testimony before the Subcommittee. It can 

be accessed on the Web site of DOE’s National Renewable Energy Laboratory at the 

following URL: http://www.nrel.gov/docs/fy12osti/52909.pdf. 

Q5. Please provide a list of all publications on which you have received an author 

or coauthor credit relevant to the subject of this hearing. If the list is extensive, 

the 10 most recent publications would be sufficient. 

A5. ‘‘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’’—as listed in question 4 above. 
89 

Responses by Mr. Jack Huttner, 

Executive Vice President, Commercial and Public Affairs, 

Gevo, Incorporated 

Questions Submitted by Chairman Andy Harris 

Q1a–1e. In your written testimony, you discuss Gevo’s projections for estimated biobutanol production capacity in the coming years and out to 2015. You state 

that by 2015, Gevo plans to have approximately 350 million gallons on biobutanol production capacity at an estimated nine plants. (a) How much biobutanol is Gevo currently producing? (b) Could you please explain how the 

composition of EPA’s pending Tier 3 standards may impact your projected 

production capacity? (c) Could you explain how this uncertainty over forthcoming standards has impacted your company and the industry in general? 

(d) What impact would the establishment of E15 as the new certification 

fuel for new tailpipe emissions standards have on Gevo’s projected production capacity, the company’s business model, and on the product’s anticipated economic and environmental contributions? (e) What would be the 

broader impact for all fuel-based industries? 

A1a–1e. As I stated in my testimony, Gevo currently is converting two existing ethanol plants for isobutanol production, with the first 18 million gallon per year 

(MGPY) facility expected to be online by mid-2012 and the second with an additional 38 MGPY in 2013. Until the first commercial plant is in production, Gevo is 

producing isobutanol at its one MGPY demonstration plant in St. Joseph, MI, as 

needed by customers for product specification and qualification. Gevo’s business 

plan is to build on the success of these early biobutanol units and accelerate the 

conversion of ethanol facilities to biobutanol manufacturing plants to reach approximately 350 million gallons of production from nine biobutanol plants by the end of 

2015. 

EPA is not expected to propose its Tier 3 standards regulations until early 2012 

and it is far from clear what the details on that proposal will be or whether the 

final Tier 3 standards—scheduled for adoption in late 2012 or early 2013—will be 

similar or significantly different from the proposal. With those caveats, however, 

EPA has conducted briefings with stakeholders regarding the direction of their Tier 

3 Standards deliberations and, based on what Gevo has heard from EPA and other 

stakeholders, the proposal will have the following impacts on our projected production capacity and business plan. 

EPA is expected to require reductions in gasoline sulfur levels in the Tier 3 proposal. Given biobutanol has almost no sulfur content, Gevo anticipates that gasoline 

standards requiring lower sulfur content will increase demand for a renewable 

biofuel such as biobutanol. Our product’s extremely low sulfur content will make it 

a very attractive biofuel blendstock for refiners and other obligated parties under 

the projected Tier 3 standards. 

EPA also has discussed reducing gasoline ‘‘volatility’’—measured by Reid Vapor 

Pressure, or RVP, measured in pounds per square inch—under the Tier 3 proposal, 

to control ozone precursors. Biobutanol has a lower RVP than ethanol, again making 

Gevo’s product a more attractive biofuel blendstock for obligated parties under the 

Tier 3 standards if RVP is restricted. However, in conventional gasoline areas of the 

country, Congress has allowed ethanol a ‘‘one-pound’’ RVP waiver for 10 percent 

ethanol/gasoline blends (so-called E10). This ethanol RVP waiver limits the effectiveness of EPA’s RVP constraints in terms of environmental protection, and reduces 

the competitive advantage that biobutanol’s inherently lower RVP should bring to 

its blenders in the marketplace. Thus, in a vacuum, Tier 3 standards that constrain 

RVP should be advantageous to Gevo and biobutanol. With the presence of the onepound ethanol waiver, however, that advantage is minimized or eliminated. 

A third matter EPA has floated as part of the Tier 3 proposal is changing the 

‘‘certification fuel’’—the fuel used to certify vehicles and engines to the Tier 3 emissions standards—from ethanol-free, ‘‘neat’’ gasoline (E0) to either E10 or E15. EPA 

posits that E10 is a prevalent gasoline blend sold across the United States today 

and that, given the Renewable Fuel Standard under the 2007 energy bill, E15 will 

be the prevalent gasoline blend sold across the country in the coming decade. Gevo 

has not taken a position on a re-designation of the certification fuel from E0, but 

we do have concerns about such a proposal. 

Gevo is concerned that moving to a certification fuel containing a specific biofuel, 

such as ethanol, as would be the case with E10, would create barriers to entry for 

non-ethanol biofuels such as biobutanol and a competitive advantage for ethanol 

over advanced biofuels as the latter seek to penetrate the gasoline markets in the 
90 

coming years. Gevo continues to consider this matter and looks forward to reviewing 

the rationale that EPA will put forward in its Tier 3 proposal before taking a formal 

position on a re-designation of a certification fuel. 

Uncertainty is anathema to any business, and that includes the motor fuels production and biofuels production industries. It is very difficult for any business to 

make a commitment to a new capital project, a plant expansion or conversion, or 

a new business partnership when the business does not know what environmental 

standards it will be required to meet in the future. Thus, the mere fact that EPA 

is considering these Tier 3 Standards injects a degree of uncertainty into our industry—an uncertainly that impacts Gevo in the same manner as every other biofuels 

manufacturer. I am not able to identify a specific project that Gevo has not undertaken, or a commercial relationship with a refiner or marketer that has not developed, due to the uncertainty caused by the pending Tier 3 Standards. One cannot 

prove a negative. 

As noted in the response to 1(b) above, Gevo has not taken a position on re-designating the certification fuel at this time. We do have concerns about designating a 

biofuel such as ethanol as the ‘‘incumbent’’ renewable blendstock in gasoline, but it 

may be that such concerns can be ameliorated by EPA or by other circumstances. 

To Gevo, however, it does not make sense to designate E15—a fuel that is not yet 

registered by EPA and thus not legal to sell anywhere in the United States—as the 

certification fuel. Many vehicle and small engine manufacturers have stated on the 

record that their engines will not operate well on E15 and that they likely will not 

warrant repairs caused by use of E15. Thus, it is unclear whether E15 will ever 

enter the marketplace in substantial volumes. Given this uncertainty, EPA should 

not force engine manufacturers to certify their engines using a fuel that is neither 

widely used by nor widely available to consumers across the United States. 

Gevo’s concern with the designation of E10 as the emissions certification fuel is 

focused on preventing ethanol from converting 30 years of federal tax and production supports for ethanol into a virtual monopoly of the renewable biofuels 

blendstocks for gasoline in the coming months and years. Congress intended the 

2007 Renewable Fuel Standard to be technology neutral. If designating E10 as the 

certification fuel runs afoul of that neutrality, then Congress should monitor EPA’s 

actions very closely on this matter. 

Q2a–2c. You state in your written testimony that you are ‘‘in the fairly early stages 

of discussion with the EPA and hope to resolve’’ . . . ‘‘the issue of finding a 

way to permit the commingling of E10 and butanol so that a new, lower 

Reid Vapor Pressure (RVP) biofuels can enter the market, lower evaporative 

emissions, and contribute to cleaner air.’’ (a) Could you please characterize 

the nature of the ‘‘early stages of discussion’’ currently ongoing with the 

EPA? (b) What progress has been made on this issue? (c) What do you anticipate will be the upcoming stages of discussion and progress toward 

‘‘technology neutrality’’ in the RFS2 that you emphasize elsewhere in your 

testimony? 

A2a–2c. Gevo would characterize its discussions with EPA to date as preliminary, 

but positive and productive. Gevo has explained its concerns to EPA staff in Ms. 

Oge’s office, but has not yet discussed the commingling issue directly with Ms. Oge. 

Her staff has acknowledged the existence of the commingling issue and that, unless 

EPA guidance is altered, the commingling restriction will present a hurdle to the 

introduction of biobutanol and other renewable, non-ethanol biofuels to the marketplace. Gevo looks forward to the continuation of these discussions with EPA in the 

near future and to achieving what I believe is a joint goal of environmental protection and eliminating a barrier to the widespread introduction of a variety of biofuels 

into the gasoline market in the coming decade. 

Gevo has not had further discussions with EPA staff on this matter since the 

hearing, but expects to do so in the near future. 

Congress and EPA must remain vigilant to protect the technology neutrality built 

into the RFS2 program. While the RFS2 is a government program, it is regulating 

for-profit business entities seeking sales and income for their companies and positive returns for their shareholders. Thus, some may be tempted to seek to skew current or future EPA regulations towards one particular biofuel technology, process 

or molecule in an attempt to gain a competitive and economic advantage through 

government regulation. Gevo opposes such tactics and urges Congress and EPA to 

resist such efforts when they occur. Ultimately, consumers will decide the ‘‘winners’’ 

and ‘‘losers’’ under the RFS2 program and legislators and regulators should not seek 

to substitute their judgment for the harsh but generally accurate judgment of the 

competitive marketplace. 
91 

Q3–3a. You briefly mention that Gevo continues to face challenges that relate directly 

to the conflicts and unintended consequences of the motor fuel standards that 

are the subject of today’s hearing. You then limit your discussion of these 

challenges to the issues of commingling and that of the Tier 3 standards, 

and their specific relevance to Gevo. (a) From your perspective, could you 

please offer a broader assessment of these conflicts and unintended consequences, including issues directly related to your company, as well as a 

more general assessment of their impact on industry at large—and the subsequent impact on the U.S. economy? 

A3–3a. Federal and state regulation of motor fuels is a patchwork quilt of statutes 

and regulations adopted over the last three decades with, at times, conflicting public 

policy goals in mind. These public policy goals have variously ranged from increased 

overall production to environment protection to energy security to decreased use of 

fossil fuels. No observer should be surprised that these conflicting goals have given 

rise to conflicts and unintended consequences as one program or regulation is overlaid by others. If one adds to this mix the fact that principles of federalism and history allow States to regulate motor fuels in ways that in some cases contradict federal law, then it actually surprising that the system works as well as it does. 

With respect to federal and State regulation of biofuels and biofuels production, 

this patchwork quilt has been woven over several decades of good intentions into 

a complex web of incentives and mandates that may or may not be achieving today’s 

public policy goals. Gevo encourages Congress and the States to review and to the 

extent necessary revise these statutes and regulations to promote renewable biofuels 

with the following common characteristics: (1) high energy content; (2) low environmental impact with respect to traditional criteria pollutants and greenhouse gases; 

and, (3) compatibility with the Nation’s liquid transportation fuel infrastructure and 

existing motor vehicle and non-road engines. 

Q4. Are you currently or do you have plans to use cornstarch in isobutanol production? If so, would this biofuel qualify as a second-general biofuel? 

A4. Gevo’s business model is to convert ethanol from cornstarch plants to produce 

isobutanol. This strategy is meant to leverage the installed capital base (14 BGPY) 

of the current generation ethanol industry to make a fermentation alcohol with better gasoline-blending characteristics. But, we can also convert cellulosic sugars into 

biobutanol when the technology to convert biomass becomes economically competitive. In other words, Gevo’s production technology does not require the use of cornstarch to produce biobutanol, but currently cornstarch is the most economically competitive and fastest route to our volume objectives available to Gevo. 

With respect to qualification as a ‘‘second-generation biofuel,’’ I suspect this question refers to whether Gevo’s biobutanol will be certified as an ‘‘advanced biofuel’’ 

under the RFS2 program. The short answer to this question is yes, if the biobutanol 

pathway could show a greenhouse gas (GHG) reduction of 50% compared to 2005 

gasoline. Gevo can achieve the GHG reduction if we were to invest the capital necessary to power our plants with renewable energy rather than fossil energy sources. 

While the RFS2 restricts cornstarch ethanol from ever qualifying as an advanced 

biofuel, there is no such restriction on biobutanol. 

Q5a–5b. When the RFS was passed in 2005 and expanded in 2007, wasn’t the goal 

of Congress to move beyond food crops for fuel and instead use waste products and other non-food feedstocks to product second-generation biofuels like 

cellulosic ethanol? (a) Does the RFS2 create a situation in which corn-based 

ethanol has the competitive advantage? How does that work? (b) What recommendations do you have for changes in the RFS that would allow for 

increased production of advanced biofuels? 

A5a–5b. Yes, that is Gevo’s understanding. However, the development and commercialization of non-food feedstocks has not kept pace with the optimism inherent 

in the RFS2 statute’s goals for advanced biofuels. Biobutanol is arguably, a secondgeneration biofuel, even if produced from grain derived fermentable sugars. It is a 

second-generation biofuel by virtue of its performance characteristics, i.e., its higher 

energy density, compatibility with existing infrastructure (engines, pipelines, dispensers) and its easy conversion into hydrocarbon fuels, like jet, diesel and gasoline. 

Gevo does not believe that the RFS2 program, as passed by Congress, inherently 

advantages corn-based ethanol. Rather, corn-based ethanol’s competitive advantage 

stems from 30 years of federal and State support for ethanol through tax, energy 

and environmental policies. In all, this governmental support runs into the tens of 

billions of dollars. We believe that if ethanol (one fermentation alcohol) is to be supported by public policy, the same support should also be available to other fermenta-
92 

tion alcohols, indeed other biofuels, so they may compete with ethanol on their performance and price characteristics. Otherwise, ethanol policy is a competitive barrier to the entry of other biofuel molecules. 

A technology-neutral RFS2, as Congress intended, would enable biobutanol a very 

good chance of challenging corn-based ethanol’s current dominance of the renewable 

biofuel gasoline blendstock market in the coming years and decades. 

Gevo does not have a comprehensive set of recommendations for RFS2 program 

changes to provide to the Committee, but again offers the following recommendations with respect to potential statutory changes to the RFS2 program and to future 

EPA implementation of the existing RFS2 program—Congress and EPA must promote renewable biofuels with the following common characteristics: (1) high energy 

content; (2) low environmental impact with respect to traditional criteria pollutants 

and greenhouse gases; and, (3) compatibility with the nation’s liquid transportation 

fuel infrastructure and existing motor vehicle and non-road engines. 

Questions Submitted by Ranking Member Brad Miller 

Q1. Please provide your name and employing organization. 

A1. Jack Huttner, Executive Vice President, Gevo, Inc. 

Q2a. Are you an officer or employee of, or otherwise compensated by, any other organization(s) that may have an interest in the topic of this hearing? 

A2a. Yes. 

Q2b. If the answer to question 2a is ‘‘yes,’’ please specify the organization(s) and the 

nature of your relationship with the organization(s). 

A2b. I am the Vice Chairman of the Advanced Biofuels Association, which has an 

interest in the topic of this hearing, but receive no compensation from the Advanced 

Biofuels Association and I did not submit testimony on behalf of the association for 

this hearing. I am also on the governing board of the industrial and environmental 

section at the Biotechnology Industry Organization (BIO). 

Q3a. In the last three calendar years, including this one, have you been a registered 

lobbyist? 

A3a. No. 

Q4. If you have worked as an attorney, contractor, consultant, paid analyst, or in 

any other professional services capacity, please provide a list of your firm’s clients who you now to have an interest in the subject matter of this hearing. These 

should be clients that you have personally worked with in the last three calendar 

years (including the present year). Provide the name of the client, the matter on 

which you worked, and the date range of that work. If there was a deliverable, 

please describe that product. 

A4. I am an employee of Gevo, Inc., and have no clients that may have an interest 

in the subject matter of this hearing. 

Q5. Please provide a list of all publications on which you have received an author 

or coauthor credit relevant to the subject of this hearing. If the list is extensive, 

the 10 most recent publications will be sufficient. 

A5. I have not authored or coauthored any such publications relevant to the subject 

of this hearing. 
(93) 

Appendix 2 

ADDITIONAL MATERIAL FOR THE RECORD
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ADDITIONAL MATERIAL FOR THE RECORD
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LETTER TO CHAIRMAN ANDY HARRIS FROM DR. VIRGINIA H. DALE, 

MEMBER, NATIONAL ACADEMIES BIOFUELS PANEL
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97 

LETTER TO HONORABLE LISA P. JACKSON, ADMINSTRATOR, 

ENVIRONMENTAL PROTECTION AGENCY, AND WHITE PAPER, FROM MITCH BAINWOL, 

PRESIDENT AND CEO, ALLIANCE OF AUTOMOBILE MANUFACTURERS
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LETTER TO HONORABLE LISA P. JACKSON, 

ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY, 

FROM MICHAEL J. STANTON, PRESIDENT AND CEO, 

ASSOCIATION OF GLOBAL AUTOMAKERS, INC. 
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LETTERS SUBMITTED TO HONORABLE LISA P. JACKSON, 

ADMINSTRATOR, ENVIRONMENTAL PROTECTION AGENCY, 

FROM NESCHAUM, OZONE TRANSPORT COMMISSION, AND NACAA 
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SLIDE PRESENTATION FROM MR. DAVID HILBERT, 

THERMODYNAMIC DEVELOPMENT ENGINEER, MERCURY MARINE
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PRESENTATION FROM MR. DAVID HILBERT, 

THERMODYNAMIC DEVELOPMENT ENGINEER, MERCURY MARINE
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GEVO WHITE PAPER FROM THE TESTIMONY OF MR. JACK HUTTNER, 

EXECUTIVE VICE PRESIDENT, COMMERCIAL AND PUBLIC AFFAIRS, GEVO, 

INCORPORATED
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POTENTIAL SUPPLY AND COST IMPACTS OF LOWER SULFUR, LOWER RVP GASOLINE, 

PREPARED FOR THE AMERICAN PETROLEUM INSTITUTE, JULY 2011, 

BY BAKER AND O’BRIEN INCORPORATED
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LETTERS FROM AUTOBILE MANUFACTURERS TO HONORABLE LISA JACKSON, 

ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY
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LETTERS TO REPRESENTATIVE F. JAMES SENSENBRENNER, JR., 

FROM BRIGGS & STRATTON, SUBARU, GENERAL MOTORS, AND MERCURY MARINE
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ASSOCIATION OF INTERNATIONAL AUTOMOBILE MANUFACTURERS, INC: 

RESPONSE TO EPA DECISION TO APPROVE E15 ETHANOL FUEL

FOR 2001–2006 MY VEHICLES
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NATIONAL RESEARCH COUNCIL OF THE NATIONAL ACADEMIES: 

RENEWABLE FUEL STANDARD: POTENTIAL ECONOMIC AND

ENVIRONMENTAL EFFECTS OF U.S. BIOFUEL POLICY
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LETTER FROM CHAIRMAN RALPH M. HALL TO HONORABLE LISA JACKSON, 

ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY
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LETTER TO CHAIRMAN RALPH M. HALL FROM

HONORABLE GINA MCCARTHY, ASSISTANT ADMINISTRATOR, 

ENVIRONMENTAL PROTECTION AGENCY
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Æ