being on with us this morning and talking us through politics in the united states and the midterms. >> monday morning historians discuss the survey of presidential leadership. we will look at the histories and evolution of presidential libraries with the washington journals edward rothstein. join the discussion with your phone calls, facebook comments, texts, and tweets. >> c-span's new american presidents web site is your one-stop guide to commanders in

chiefs from joe baca -- from george washington should -- from george washington to joe biden all in one easy to browse c-span website. visit c-span.org/presidents to explore this rich catalog of resources today. >> representatives from the clean energy sector and petroleum industry talked about the epa renewal bill -- renewable fuel standard hearing. this runs two hours. [inaudible conversations]

i'm pleased to call this hearing to order. today we are going to examine the environmental protection agency's renewable fuel standard program. this includes management and implementation challenges as well as opportunities to encourage greater deployment of more sustainable fuels. our staff, my staff tells me that our committee has not held in oversight hearing on this topic since 2016? 2016. going on six years. but to help form the discussion we are fortunate to have an expert panel of witnesses who are joining us today and then we want to thank all of you for participating in this meeting and discussion. winston churchill's credited

with saying a lot of things. we want to take a moment to understand the history of this program and how we got to where we are today americans are consuming more to fuel its growth and consumers were paying more every year. took several steps to improve the nation's energy future and i would say with of the leadership of our president george w. bush. among those steps we created expanded under the clean care act. the goals include providing new

economic opportunity while lowering the dependence on foreign oil. since the implementation we've come a long way to achieving our goals. economic growth and agricultural communities has expanded and our fuels have become significantly cleaner than they were two decades ago. in fact the renewable fuel standard presents economic energy opportunities for people in delaware and every other state. like many of our colleagues on the committee i still support the goals of the renewable fuel standard. for example the amount used today in this country is far less than 36 billion.

that shortfall is partly due to market challenges and approving new fuels to enter the marketplace. but make no mistake having the potential to replace on a gallon for gallon basis in today's combustion engines with no loss of performance. many of these advanced fuels have already been approved for use in state fuel programs and states like oregon however we've been slow to make decisions on the new advanced biofuel applications and and pathways for usage. at the same time, the clean air act we have some of the advanced renewable fuels that qualify to

help refine these obligations and further supporting and growing domestic biofuel industry and another challenge in preventing the renewable fuel standard is the volatility and compliance costs. years of mismanagement in the previous administration coupled with the unexpected changes in both fuel supply and demand caused by the pandemic have collectively wreaked havoc on the programs compliance and market known as the rin market. epa tracks compliance with the renewable fuel standard by using tradable credits.

the costs from 30 cents to almost two dollars per gallon created the financial incentive for just about everybody. especially those that comply with of the renewable fuel standards. that has made it extremely difficult for the obligated parties to make forward thinking investments in producing cleaner fuels. i'm going to sneeze. maybe not. [laughter] excuse me. with the volatility and compliance costs. when exploring ways to improve the federal policies.

all while fostering local clean fuel investments as we will hear today these programs have the flexibilities and those that are not included in the renewable fuel standards. and if he and post liquid fuel world and the key abilities to producing the refined motor vehicle fuels to power our lives we turn to senator capital.

it's nice to be back in the nation's capital, so i appreciate that. i also want to join the witnesses today. the renewable fuel standards. we haven't had that hearing since 2016 so i think the gap between the hearings speaks to the intricacies of the program. there are a few issues i would like to cover today during this hearing. i'd like to highlight my concern

on the two actions. the renewable obligation for 2022 does not reflect the market reality for the but the panel has to say about that. i'm concerned the volume obligation is going to raise costs at the time when gasoline isn't as high in and of itself. imposed by the program. the proposed action will negatively impact.

we've already won two more cases acted in the arbitrary manner with the exemption petition. but it's just one of a number of small refineries around the country. it's especially puzzling as we see the increase in gasoline prices and small refinery closures around the nation. the proposal will only lead to the increased uncertainty with bearing the cost amid the already record high inflation and the business is being harmed

by elevated fuel costs i look forward to hearing more on this issue. it's still very, very important. i can tell you firsthand it isn't going away anytime in my state of west virginia. it disregards the fact the different communities and businesses have different needs for transportation solutions. it may be true that electric vehicle sales are slowly but surely increasing. it is conversational and liquid fuel is especially important as

the program enters the new phase next year. from 2006 to 2022 but after 2022, epa has the power to determine the annual volume amounts and as the chairman pointed out. the expected to issue a rule to do just that. the office of radiation at epa this is the office that is in charge and many other complex regulatory programs. yet we've been waiting for more than a year for the administration to name a nominee

to their office. i talked about this more than once in the committees. the previous record was 260 days. with that, mr. chair man, i yield back my time.

would you repeat and say your name for us. finally a partner before this began for the testimony i would turn over to the colleagues.

looking at the renewable fuel standard as we look around the world all the visible and measurable signs of the global climate change we need to adopt clean forms of energy and end our dependence on carbon emitting fossil fuels. i believe we have an incredible opportunity by the electric cars and trucks and investments we made in the act. as we strive to tackle the challenge of the global climate chaos. not all of the solutions will start with the federal government and we need to learn

from them and it is something we recognize in oregon year after year we confront the wildfires and having a huge impact on the lakes and streams and oceans wreaking havoc off the oregon coast. almost six years ago was a resounding success. it put us on track within the next five years. running the federal fuels

policy. a proud graduate of oregon state university with a degree in bio resources engineering. she's been an integral member of the environmental quality for almost three decades. everyone has the tools and technical assistance to transform the fuel market.

along the west coast moving in the same direction. so i'm thrilled she's with us today through the miracle of electronics and to share her experiences about what has worked in oregon and how those successes can be implemented in a larger scale. thank you, mr. chairman. >> thank you. if you are ready, go right ahead. >> good morning, chair carver. i work for the oregon department and the program manager for the invitation to speak to you today about the clean fuels program. i'd also like to thank senator

merkley and for the continued leadership in addressing the climate crisis. the program began in 2016 and thus far the program's success can be summarized in three distinct outcomes first the companies that are producing the fuels are making them more cleanly and delivering them in greater volumes. the carbon intensity of the ethanol oregon uses.

reducing the greenhouse gas emissions so far and displacing a billion gallons of fossil fuels in oregon. to biofuels reducing tailpipe emissions in oregon and improving the health of oregonians. in addition to reducing the greenhouse gases, low carbon fuels also e-mailed to the carbon monoxide, nitrogen oxide and particulate matter compared to fossil fuels.

the prices when compared even those that do not have similar positions. in fact the program has lowered the cost of the low carbon fuels it created a powerful incentive

to decarbonization sector. and takes the best part of the standards. it's needed to begin the transmission to the lower carbon fuels and the fuel standard ensures that the lowest of the low carbon fuel comes to oregon. with the credit as both are necessary to provide the incentives to the fuel providers. from the long-term certainties from the low carbon fuel standard program that has established targets through 2030 and oregon is currently in a

rulemaking to established through 2035. but we haven't done this alone. oregon has benefited greatly being a signatory to the coast elaborate. since 2013 british columbia, washington, oregon and california have worked together to harmonize best practices and policy alignments, program design and implementation to create cleaner low carbon fuels. this has grown to other states are looking for smart strategies to reduce the transportation emissions.

thank you for the opportunity to testify today. i'm the ceo of the world's largest biofuel trade association. remaining the nation's most successful clean energy policy yet the full potential as a climate solution remains untapped. for the past eight years, the lack of accountability and failure to comply with the law slowed progress into carbon reduction bit today as the congress looks to immediately reduce the intensity of the nation's transportation it is imperative that a biofuels like ethanol, the most affordable and abundant source of low carbon high-octane fuel on the planet is part of the transportation

now and into the future. there's no pathway 2015 without biofuel. the gasoline or the flex fuel vehicles will dominate a new new vehicle sales through 2050. we can achieve progress and progress reductions with today's infrastructure, today's vehicles and a homegrown supply chain through a robust and binding renewable fuel standard and acceleration towards nationwide year-round elusive lower cost biofuels.

and a compliance deadline extensions. most of these administrative actions have been to appease the unfounded claims of a select few looking to subvert, slowing progress and carbon reduction. epa's recent proposals, delayed as they are, right and some of the wrongs and included the required 15 billion in 2022. a long-overdue remedies for the general waiver and the abuse of the small refinery exemptions. they take a major step backward by seeking to produce the 2020 blending obligations finalized two years ago. this retroactive change exceeds the agency's authority and creates market disruption and uncertainty. we need to finalize the proposals as soon as possible

not only have they deprived consumers of the lower cost fuel, they eliminated an easy task for their own compliance. without immediate action, consumers will lose access to the most affordable fueling option on june 1. when americans drive the most. we must restore market access so drivers can save up to ten cents per gallon every time they fuel up with a 15. in addition to reducing emissions in light duty vehicles, biofuels are poised to play a greater role in the carbonized and other forms of transportation. and bio refineries are already deploying carbon capture and wind and solar energy and incentivizing sustainable farming practices. all to drive further innovation

as further reductions in the carbon intensity. we see promise in the low carbon fuel markets and like aviation, marines and heavy duty vehicles. to lead the nation to the clean energy transition we must have a healthy and thriving biofuels industry and a strong and growing rfs and move to e- 15 is the nation's standard fuel. don't be fooled, it isn't going to harm refiners. three administrations in the courts have affirmed this. claims to the contrary are just a smokescreen to divert attention away from clean, affordable american energy. undermining and delaying the role of the 15 means increasing the gas prices for american consumers, period. gas prices are driven by the price of crude, not to the cost of the rfs. american farmers and biofuel producers are ready to work with the administration and congress to restore and put us back on track. thank you and i look forward to

your questions. >> thank you very much for joining us and for your testimony. i got another shot at your name. i think i'm getting close to getting it right. you are recognized. please proceed. >> [inaudible] thank you for the opportunity to make some comments on the renewable fuel standard and management of the program. i'm with the research foundation that's been around since 1944. i also want to thank the senior director for helping me with the testimony and preparation of the charts. the first thing i would like to say is that in all of our work over the years and we testified here in 2018, 2016, we have

always said biofuels and particularly ethanol represent a very important component of the fuel supply for the u.s. it's a very cost-effective way to get octane and extend the supply. the basic criticism of the program is not with biofuel, it's with the mandate. as you can see in the first chart, and chairman carver talked about this already. we are not hitting the original targets of the energy security act. in fact there's a lot of reasons for that. we are about 20 billion against the initial proposed target. the basic reason we are not hitting the target is because our expectations were wrong. there's a lot of uncertainty in the future of oil and gas prices and supply and demand. in 2007, expectations were gasoline demand was going to grow dramatically by about 30%

over the next 20 to 30 years. in fact, it declined dramatically. and this made it more difficult to incorporate biofuels because when biofuels become a large percentage of the gasoline pool, the costs rise. it's actually quite low costs that save money up to around the 10%, about 10% compliant costs rise. you can see this year, this is actually very interesting to us because when we testified in 2016, we informed the committee that there was a certain price pricelist to the program that if you tried to drive these biofuels by mandates above 10% the compliance cost escalates and as chairman carver pointed out the credits are one way to understand and we estimated that using the scenarios alone, the

increase in the cost of the program per gallon the consumers could be anywhere from 30 to 50 cents. well, today the prices are driving up the cost of gasoline about 28.5. as you can see i'm not going to bore you with this, but in a way it's what it costs to take crude oil and turn it into gasoline diesel fuel and other petroleum products. you can see here that when we had a period, and we will talk a lot about this, but before epa changed the rules on how to treat the credits under the exemption, the program, the exemptions were driving down the rin prices because it increased the volume. that program has ended, combined with the acceleration and prices

as we come out of covid, we now have very high prices in the u.s. and these are reflected in the start. the other issue we are now entering a period in this period preceding this because a big percentage of the cost of the program and i would like to show you here the problem is yes it might be contributing about two dollars, but an array of programs, the low carbon fuel standards, rfs, federal taxes, all of these are contributing to the costs. so, we just have to keep this in mind. one of the components of the high gasoline prices are these

programs. i think that i will just flip to the end of my comments here that as we go forward, our future is very uncertain and i really encourage congress to give some guidance to the epa because unless we have a set of programs that are robust against the uncertainty, we are likely to have a lot of dislocations into this is a fundamental problem in the program, with the use of the mandates. thank you so much. >> thank you very much and last but not least we thank you for your testimony. please proceed. >> thank you, chairman carver, ranking members of the committee for the opportunity to talk about the renewable fuel standard. i spent the entirety of my 30 year career representing the

petroleum industry and particularly small refineries. i know the companies, i know the people, and of the communities, and now i also know the very real threats they face as a result of the proposal to end the refinery hardship under the standard. i am referring of course to what senator o-uppercase-letter described in the december 7, 2021 proposal to issue a blanket denial of all pending small refinery hardship editions. the epa's deadline to issue the decisions was 90 days after the petitions were submitted and instead now he intended to deny them retroactively causing small refineries to enter the market at the near record highs. most important and most telling is the fact the epa's proposed denial did not reference it's legally required consultation with the department of energy,

and the department of energy's conclusion that if epa acts as they propose to do, small refineries will be at risk of shutdown into bankruptcy, notwithstanding that advice from the department of energy the legally required consultation, epa is moving ahead with its plans. certainly this was material information to the parties asked to provide comments on the state of small refineries. i'm sure you are aware of the fact the gas prices are at the highest levels in eight years into the inflation rate is increasing faster now than in the last 40 and we are at a crossroads. if epa persists ignoring its statutory duty and taking aim at america's small refineries, it will not only violate the law, it will exacerbate these already adverse economic conditions the country faces. the harm to refineries and the

u.s. economies will be harmed for harm's sake because denying small refinery hardship relief cannot and will not affect 1 gallon of biodiesel. no biodiesel blending will be lost. at congress' direction the department of energy in the report determined that small refinery hardships would grow increasingly acute as the volume mandates increase because as the volume mandates increase, wind prices increase. when rin prices increase, small refinery costs increase, and that is because small refinery hardship is caused by the limited ability to blend not their unwillingness to blend. epa's 2021 proposed denial concludes a small refinery with limited access to renewable fuel blend stocks, no downstream blending capability, no retail

type capability, no pipelines to access lucrative product markets will have the exact same costs to the penny to comply with of the renewable fuel standard as the largest integrated oil company in the united states. companies that have the ability to export their fuel and avoid the mandate completely, companies with the ability to blend other fuels by small refineries to generate excess and the ability to take those and trade them, speculate in them in the unregulated 30 billion-dollar market. large integrated refineries report in their public reports earning tens of millions of dollars in profits speculating in rin. i listened to a hearing talking about the harm to the biofuels industry from granting small refinery hardship relief, which

is a fiction. a small refineries first of all disproportionately produce diesel, not gasoline. they blend as much ethanol as they can, but gasoline is a small part of the production. the data demonstrates that there is zero correlation between small refinery hardship release and the blended rate generally, so in the years when the hardship relief was granted, more than in the prior years, there was zero impact on the rate. so this is a question that we have to have explained to us because there is clearly no correlation between the two. forcing small refineries to buy him a record high price will result in their failure. it will result in the closure and bankruptcy according to the department of energy and epa needs to step back. >> have you concluded your

remarks? >> yes. >> thank you so much. i would ask unanimous consent to place in the record materials on historical fuel and energy prices. here in the no objection, so ordered. the past administration's mismanagement of the renewable fuel standard along with the ongoing fuel impacts of the pandemic have created a volatile swings and compliance costs for the renewable fuel program in recent years making it hard for all stakeholders to plan and invest and meet the program's requirements. it's my understanding that oregon hasn't experienced the same volatility in the compliance cost with its clean fuels program. my question is how are the flexibilities built into oregon's low carbon fuel standard along with additional cost containment and other measures in the programs that

differ from the federal program. how do they help to mitigate the compliance cost spikes? >> thank you for that question. i think a lot of it is the ability of the agency to monitor the cost. the prices that are delivered in california and washington and idaho and for the past year or so we haven't seen a significant comparison. those are states that also don't necessarily have additional fuel standards. we do keep track of those places pricesand we are legislatively

required to have cost-containment mechanisms in the program to be able to monitor those fuel prices and so i think it is a combination of the monitoring but haven't caused these volatilities in the fuel prices in oregon. >> a quick follow-up it is my understanding oregon tracks the costs and surrounding state fuel costs as part of its implementation of the low carbon fuel standard. very briefly or their theresurrounding states that dot have the low carbon fuel standards today that have higher fuel costs than oregon? >> thank you for that question, chair carper. so as i previously stated, the most recent analysis of the data that we have been looking at is we do compare the fuel prices both retail and wholesale to the states of washington and

california idaho. we've shown we do not have any additional standards in place there and feel confident that the prices of the fuel in oregon isn't being disproportionately impacted by the fact that we do have a low carbon fuel standard. recent court decisions prevent the blends to 15% known as e- 15. this coming summer unless congress or the administration takes further action at the same time the epa over the course of several different administrations has been slow to improve the advanced applications for the new pathways and fuel for the

renewable fuel standard question. in your mind with the approval of additional advanced biofuel applications and. >> it most certainly wide. the easiest path to bring down the prices to blend more biofuel. basic supply and demand. the more blended in particular higher blend like he 15, the more created and that's how you bring down the price. so not only is that going to be addressed but you will be introducing a lower cost fuel supply for consumers and there are also technologies languishing in the epa currently producing cellulosic ethanol that they are not getting credit for because the application has been sitting around for five years. so if there's more innovation we

do need some certainty and predictability and for the regulations to keep up with the market and regulation. >> thank you for those responses. >> in your remarks you were pretty clear about the exemption. obviously i mentioned that in my opening remarks and you are probably aware the case that i brought forth in west virginia of two favorable court decisions from the fourth circuit. shouldn't epa take into consideration that the courts have actually taken into consideration making regulatory decisions and that this was causing hardship to this small refinery, how would you respond to the epa blanket denial of everything when the courts have actually come forward and said

it's not a sound decision? >> you are exactly right. for the 2016 to 2018 compliance, the fourth circuit demanded of thedecision to deny hardship ref to west virginia. if they produce about 23,000 barrels per day and it's isone of the smallest refineries in the country. the court rejected the decision because the epa didn't consider the facts of the specific case. its location, how it distributes its fuel, the fact 70% of it is then production with diesel. epa then took another shot and denied the petition even though

it had been vacated by the court and again determined that it was an eligible. the second time the fourth circuit vacated the decision this time finding epa had arbitrary and capricious and trading different than any other small refinery. so now this is the third attempt to prevent west virginia from receiving hardship relief. essentially what the epa is proposing to do is for every other small refinery in the united states will be denied hardship relief if the epa proceeds on this path. ironically, on the basis that every refinery in the united states from the largest multinational oil company to the tiniest small refinery in west virginia has exactly the same cost of compliance. it doesn't matter that a large company can export. it doesn't matter a large

integrated company has access and makes millions in speculation. everybody's cost is the same and so i always go back to the study prepared for congress which explains the hardship that a small refineries will suffer as a result of their inability to blend, as a result of their inability to take massive amounts of capital and joint venture. so yes, you are correct, senator. this is the third attempt to divest. >> and specifically. >> thank you. i was looking through your chart and it talks about where we see that gas prices going into who gets hurt the most and it talks about the rising cost of

transportation fuel, low income and many low income communities. if you have to pay an extra ten to $15 to pay your car up, that hits that person that at the end of the month is looking for an extra ten or $15 to help pay their electric bill or some other bill that's also rising at the same time. you also talked about the cost of blending is about 28.5%, 28 to 30 cents per gallon, so there is a cost to their. then you also mentioned to me before we got started that as we are moving forward, there are some guardrails epa needs to have as we are moving forward that we can provide for them. if you want to talk about that issue i'd like to hear that but i also like to hear your opinion on the overall cost of what we see now, high cost of gasoline and how we can deal with the issue of who is hitting the hardest and there's a proposal to get rid of the gas tax that's

18 cents that's not even close to this. >> first, let's talk a little bit about the government mandated energy transition because we are the largest oil and gas producer in the world and we are very concerned certain policies are seeking to constrain north american production platform before the alternatives already. it's going to have -- we are going to produce a lot of alternative fuels and technologies, but if we proceed between 2010 and 2020, the united states alone was the application of biofuels provided over 80% of the increase in demand for liquid fuel, so that's the first thing we need to think about. we should treat this north american production platform as a strategic and economic asset

which we need to be careful before we decided to disrupt it so that is the biggest program that we have to keep the gas prices under control. the next thing is we are fighting over a small body because in the mandate, we would still be blending anywhere from eight to 10%. ethanol is a valuable feedstock. it helps to make octane requirements and other biofuels. but if we proceed with a mandate, we kind of prohibit innovation and alternatives that come forward because we have no idea what they are going to look like. then the final point, this is devastating for low income communities as you can see from that chart. everyone who wants to proceed should keep in mind i don't believe the american people

will. >> senator cardin was here earlier and i think now joins us by web x remotely. >> i appreciate this hearing very much. it's long overdue. the history of the renewable fuel standards is something that needs to be understood and we need to update this so i appreciate your leadership. there's many competing priorities. we have energy security issues and the environment concerns for climate change. we have the cost issues. it affects the cost she was not

just here and within the food stock so i would like to know what can we do if we want to focus on development and growth of domestic advanced biofuels derived from nonfood based stocks how should we be adjusting the policy with regards to the renewable fuel standards? >> i think the way to do this is to allow a lot of the alternative biofuels to compete for the liquids market and for those that have promise we should have a good research and development program and even support for deployment but we should allow a large opportunity for consumer choice and

competition to take place between manufacturers and processors of fuel to deploy these into the marketplace. >> i will go ahead and follow on those themes of choice and competition, two things we wholeheartedly do support. they need options at the pump and it's unfortunate come june 1st 1 of the lowest cost options available to them is going to be eliminated because the refineries so we've got to reintroduce the higher blends that's giving consumers one low-cost choice. when it comes to competition as we all pursue lower carbon intensive energy, that's very important and critical to that is making sure the modeling and incentives are technology neutral. in this country the past when so let's make sure we are looking

at the full lifecycle analysis of the available solutions. we are going to need everything to achieve these goals to make sure it reflects up to date science, innovation taking place within agriculture to bring down the carbon intensity and then we will have a competitive environment with a choice for consumers. >> i would mention in that regard, we both serve on the senate finance committee and we had looked at proposals to try to have a neutral in regards to the tax issues and reward those that are lower in the carbon emissions and help our environment. so, we agree with that. the problem is today's structure does reword certain high carbon sources and we don't really have a level playing field. i don't know if the other panelists would respond to this or not.

>> yes, thank you for the question. i think what i would say this is what the low carbon standard does. it really does reword the carbon intensity of the fuel, so as you mentioned going from a plant-based to a waste oil for the biodiesel, for example, it means the fact that they do have lower emissions means that they do have higher incentives, low carbon fuel standards, so those incentives bring down the cost of those fuels. so, that is the low carbon fuel standard and i think it's been working really well for the lowest. >> that some of the debate we are having right now. >> the standard giving choice to consumer. >> thank you mr. chairman.

>> thank you. before we return i would ask unanimous consent to submit for the record of various materials demonstrating the strong economic growth including the statement from the assistant secretary for the policies at the department of treasury from january 31, 2022. according to the statement, growth grew 5.5% over the four quarters of 2021. fastest annual pace in 37 years. this is in addition to the materials i submitted earlier to show the energy prices today are still lower than they were in 2007 and today's prizes at the e pump are driven by growth and fuel demand as the economy emerges from the pandemic. without objection. next senator inhofe will be followed by senator whitehouse. >> thank you, mr. chair man and before you start the clock, i want to experiment with something i haven't tried before. i have two questions. the first question has four

parts. rather than the position of having to write it down fast i'm going to ask my staff to hand her the written copy of those four questions, which i will read now. first of all, ms. johnson -- >> the time is expired. [laughter] >> i didn't do that to you. >> okay, go ahead. >> denial of the small refinery exemptions which we have in oklahoma to drive the prices up and does the data support the assertion that the exemptions lower the blending and please describe your understanding of the stakeholder engagement regarding the proposed rule and is there data to support the claim the epa refineries would contribute to the closure of the refineries and lost jobs?

anything that's already been answered we can go over that fast. >> thank you, senator and thank you for the list of questions. so, with respect to the first question of whether denial of small refinery exemptions will drive compliance costs higher and gas prices higher it is a certainty. if we publish the proposed denial, the parties holding the rin's, smaller refineries need for compliance will be in the position to demand exorbitant prices because small refiners will be captive buyers on the eve of the compliance deadlines. multiple compliance deadlines on top of one another because epa has been so delayed in its rulemaking. this is assuming rin's are available at all. so, my small refineries do not have the rin's that they need for compliance. they are physically unavailable, not no more 2019's are available for the compliance, number

2020s are available for compliance because as epa described, parties uncertainty about with the ultimate volumes will be are holding onto their excess rin. so it is a recipe for crushing small refineries. it is a recipe for escalating rin prizes. they will get much worse if the epa moves forward with its proposal. gas prices will increase with rin prices for parties that can partially or fully pass through the cost, for example large integrated oil companies and large exempt retail chains and small refineries will be forced to violate the law without hardship relief, shutdown, curtail or go bankrupt. those are the department of energy's predictions. with respect to your second question, senator, does the data support the assertion that small refinery exemptions lower the blending of biofuels, i want to answer that in two parts. first of all, the epa's current

proposal relates to compliance 2019 and 2020 and 2021. it is impossible to blend any more fuel in those years. those years have already closed. so, no. no biofuel blend rate will go down. and essentially the other proof, there's a lot of discussion about the 2016 to 2018 timeframe when the prior administration granted or hardship relief that had historically. during the period of time when small refinery hardship increased, so did the blend rate. and the simple reason is small refineries cannot meaningfully impact the blend rate. the blend rate the blending is done downstream. the only question is whether or not small refineries are going to make massive wealth transfer to the large integrated oil companies and large exempt blunders that hold the rin needed for compliance. your third question was to

describe stakeholder engagement with refineries regarding the proposed rule. i can say this. small refiners were blindsided by epa's proposal to retroactively deny all 2019 to 2021 petitions years after the statutory deadlines to issue their decisions had passed. epa checked a box. they met with us on august 205th 2021. they shared no substance about their plans to issue retroactive initiateretroactive adjudicatiod denials for the small refineries the proposal matches entirely the industry that seems to have meaningful engagement with epa and seems to have engaged with the usda. and by the way, congress decided that the appropriate consultation was with the department of energy, not

agriculture and the department of energy is, as i've said, has determined epa's plans to deny hardship relief will result in a shutdown and closure of refineries. your last question, senator, was whether there's data to support the claim that epa's denial would contribute to the closure of american refineries and less jobs and i won't repeat what i said previously, but essentially, a number of small refineries do not have the rin they need for compliance, and if they are denied relief, they will be captive buyers in a market with escalating rin prices and epa has acknowledged that there was a shortcoming in the production of rin for the 2019 compliance year and the rin that are available in the market are not in the hands of small refineries. so the small refineries won't necessarily violate the act because they will not have the ability to get the rin the need for compliance which will then

force them to decide between spending money on rin if they have it, shutting down, and/or going into bankruptcy. senator, i hope i've answered each of the questions. >> excellent, and you've done it in just the right amount of time. >> the gentleman's time is expired. go ahead, just briefly. >> i had one more thing and that is, i know you talked about this and answered a question and addressed this also, but -- >> to move to an electric fleet we have to move materials and minerals which we will be highly

dependent. some are not necessarily friendly to the united states. >> if i may just correct one, one question i thought was very interesting. it's important i understand that oregon has the fifth highest gasoline prices in the country. so, it may be lower than some other joining states but gasoline prices are quite high in oregon. >> senator whitehouse, you are up. >> thanks, chair man and everyone for being here. i have long supported the biofuels and ethanol standard, but it's kind of been an act of faith someday the market would come around and that corn ethanol in particular was kind of a pathway effort that would let the cellulosic ethanol and other forms come forward.

so, i'm interested in your testimony about the carbon intensity of the ethanol and biodiesel that oregon uses that it's decreased. i wonder how confident you are in the measure of carbon intensity of your corn ethanol fuel stock. >> yes. thank you for the question, senator. so, we do use the oregon model to calculate the intensity in the state which is the national model to do so. with respect to the ethanol that we are receiving an oregon, the import of that fuel is producer specific so we can keep very close track of the different ethanol's that we are getting

and what we are seeing is incremental decreases in the carbon intensity so for ethanol over the past six years it has continued to go down at about 10%. the carbon intensity of the biodiesel's have seen a more significant decrease. but it is study and it shows that there is value in the low carbon fuel standards to continue to draw down those intensities. they are getting more efficient and better after energy input and that is reflected in the lower intensity scores. >> you mentioned cellulosic ethanol i believe. what is the market share within the ethanol market of cellulosic ethanol? or in your portfolio if you know that better than the national market. >> yes. thank you for that, senator. as far as cellulosic ethanol, we

don't have any cellulosic ethanol companies in the state of oregon so the ethanol that is coming to oregon is not cellulosic but is decreasing in the carbon intensity. >> how much of it is corn? >> 100%. >> okay. there we go. one of the things i think we need to do in order to find a pathway to climate safety is to put a price on carbon. that seems to be fairly commonly held view among economists and banks and so forth and among people who are looking hard at the climate problem for the emissions reduction solutions. and at present, the absence is a massive subsidy for the fossil fuel industry. the international monetary fund

calculated north of 600 billion per year just in the united states. 600 billion per year is an enormous number and provides a very strong motive for a massive political elections lobbying operation by the protected and subsidized fuel to defend and protect its subsidy politically, so we are in a kind of difficult position here in congress. i'm wondering, back to you again, if there were a price on carbon, how would that affect the ethanol portion of your fuel market? >> yeah, thank you for that question. so, in effect, the way the low carbon fuel standard works is that we are at the moment the monetization kind of value is in the credit prices that are being treated in the program.

so this is a market that we do not control. the market contributes to the credits traded within the treate program, so currently speaking, the credits in the state of oregon are trading at about $125 per ton. it's been higher. it's been lower. we publish that on a monthly basis to show transparency to the market, and so you know, there is certainty in what that price is that is associated with of the carbon, so that's how we do it in the low carbon fuel standard. ..

>> which i am convinced is a historical phenomenon. in this country and administrations have been given enough a lot of leeway

and with those hardship waivers is another tool. and then four years it's one way then another and then another four years it's another way. i knew a couple of you and i have had this discussion but it seems to me that at the end of this year, for the last decade several people like to deny at the end of 2022 there is a new rule in place they are not required. the authority is the epa and the administration has more unilateral authority after this year. and i would like to have a little discussion from the panel. what is the understanding of the act so where do we go?

>> i think that's an excellent question and something that keeps me awake at night because i see a freight train headed toward the highest possible rbl to break through and to promote e-15. and then they have discretion in such a way that it distorted competition. and growth energy has stood shoulder to shoulder which is preventing the closing the blender people. so just keep pushing and at some point in 15 will happen

every small refinery is shut down because we are counting on volunteer funding what we call the blender the poll. smaller binaries do not have the idea to one —- the ability to bland and so until the suspects it is a recipe for those refineries that cannot bland. if we have in fact determined that e-15 result in reductions of greenhouse gas emissions which i don't think we agree with we need to fix the structure of the program and i was interested in cost caps and limitations on the ability to speculate on the cost and

obligating lenders, all of these proposals to fix the things that are preventing renewable fuel blending has not occurred. so straightahead we just have collateral damage. >> first of all currently have the future administration instead of pushing a 15 candidate go to zero? with 1 gallon quick. >> thank you for the question. after 2023 there are no congressionally set blending requirements a few important things they have to consider energy independence and environmental impact. and one of the things we have all suffered from is a lack of certainty and stability one of

the things you look forward to is the opportunity to have lending requirements similar to what was in oregon to help address the volatility concerns. >> i wish we had more time. but the biggest point i went to make is 2022 is here now. we have to come up with something i would rather come up with it with everyone in the room. >> as soon on —- as long as you are in the room with me. >> thank you senator. senator duckworth please proceed we will come back as

she can we join us. >> and then i have senator stab in now one —- gather now. >> i like to begin by asking consent to the three documents into the hearing record one is the academics daddy of the national academy of sciences called environmental outcomes of us renewable fuel it is a study by the downstream impact of us biofuel policies and the third is an article entitled those that are divided into rollback biofuel requirements. >> is there objection? hearing nine. that the rfs mandate is adding 20 or 30 sensing out into the

period class that the low prices are extremely high it works the hardship of consumers and we should look at every avenue to provide relief to consumers when i'm in cheyenne on the ranch i grew up in in the house that i grew up in a group to a small refinery. and then furthermore they were unable when refining for hydrocarbons, they were absolutely unable to purchase

non- hydrocarbons to plan to meet the renewable fuel standards. so they converted the oil refinery to a refinery that now refines soybean we'll it went from 260 the low-wage jobs to 60. we lost 200 employees in cheyenne which is a huge number in our little community. so this had an enormous impact on our communities. and this happened during the previous administration's tenure. in the last of the refiners exemption putting the him are

down in costing small communities like mine hundreds of jobs when congress created the biofuel mandate we predicted period increasingly precludes refineries from selling their products they produce and the products they don't produce if they can get them. this squeezes the smallest firms first higher cost producers are harmed the most that you are too big to fail are too small to succeed and

in the case of small refiners are they too small to succeed. >> think of the american, conflict we have a lot of oil production produced and processed and they are moving off the continent. it with the emergence with the production of vendor energy independence they play a vital role and as i said the solution remains in order for all of these facilities at the different cost structures they needed open market and the fundamental problem they all face are these mandated requirements which do not

yield any benefits even to the farmers. that moved biofuels forward and these would tend to disappeared. >> one of my small refinery said to me we dance between the toes of giants. the smallest refinery in virginia in whatever community they dance between the toes of the giant integrated multinational oil companies.

until the fuel standard came along and said we will tilt the competition in favor of the large integrated oil companies but don't worry we've got your back congress and specifically we recognize the following mandates and the inability of small refineries to have access to capital with large integrated oil companies that don't have access to pipelines to disproportionately produced diesel fuels we will have your back and provide an exemption. small refineries blend everything they can but they don't always have access or the ability so what happens is they are captive buyers in a wildly. so 2019 to propose hardship

relief that one more drop of renewable fuel can be blended to what we are talking about epa compelling small refineries to make massive wealth transfers from oil integrated companies because they don't have access to feedstock because they cannot bland and it is un-american. >> and that should be the focus and what we do to have a better renewable standard program because we're just assuring and only the big integrated companies will succeed and all of the small businesses will fail. once again, they are moving people out of a small rural

communities and into the bigger areas that have the bigger refineries that is happening in so many industries. that it has a profound effect on america's jobs and demographics. and renewable fuels at the same time you don't make it all about a small sale in the big survive and thrive. >> senator duckworth? have you joined us yet? >> yes i have. >> you are recognized. >> as some of the comments that are made there is no end to the list and then to

playing biofuels. with the basic supply and demand. so when they are responsible for retail gas prices. >> the prices have no bearing on the price of fuel at the pump. and it is a dominant factor driving the price of fuel is the price of crude oil. and with government agencies and other modeling and what's really important to understand is the role of biofuel to bring down the cost of biofuel for the consumers and the

price of the 15. and that is a 10 percent blend, some choose an ada octane when they have a little more ethanol that brings the price down at ten sense for gallon. and then you can buy 0 percent ethanol then you have a premium not to have ethanol so most assuredly to bring down the cost of gas prices. >> and it is impressive of more than 15 years ago and my understanding is that under the last three administrations and numerous companies are on public record refiners are downstream and not doing harm

by the amount of money. can you help us to understand despite the argument of big oil oil refiners have managed to purchase and stay in business quick. >> thank you for the question. with the refiner flexibility how they demonstrate compliance they can blend biofuel or they can purchase so they have the flexibility to do this so more than a decade for the businesses to understand the annual obligations to make this decision accordingly and it's important to understand the volatility that you see those that are choosing not to blend and wait until the 11th hour then seek an exemption or waiver or extension from the agency. that's what you see the volatility come into play.

and then the more biofuel they will save. >> mr. chairman like to enter into the record 2015 and 2017 and 2021. that one is indicating among other things with the carbon intense was 39 percent lower. and it has decreased on existing cropland and according to the usda the amount of fertilizer required to produce has fallen dramatically since the creation of the rfs. >> .

>> i ask unanimous consent to include in the record with this hearing report from environmental health and engineering and greenhouse gas reduction documenting the $1 billion of reduction attributed since 2007 and third published by usda title the greenhouse gas assessing recent evidence with those that to reduce omission that find that ethanol reduces the carbon footprint. >> these studies confirm what they already know and those that are reducing those missions to play the integral

part in these efforts. thank you mr. chairman. >> you have been patient so now i will let senator stab in now go first and you can go right after. thank you for your patience. >> i am here. thank you and i appreciate very much you doing this hearing. and then to frame this as big refiners this is whether we will have the dirtiest kind of fuel or the cleaner fuels if we go back 100 years as edison first tried to do a vehicle with a battery you cannot to

help them create the innovation and two years later the biggest permanent tax cut for oil and gas were embedded in the federal tax code. and then at that time now we are trying to balance that out with giving opportunities to biofuel. all of which start and stop. it's not indebted in the tax code. so from a business standpoint the importance of policy and regulatory certainty making investment decisions and someone, how important is that quick. >> thank you for the question. it's incredibly important in terms of my industry has

cellulosic biofuel it's up at 100 percent and beyond of reductions. and as a nation with carbon reductions are on the table and then to see a lack of certainty and the lack of the marketplace moving forward so they set this out it does stifle the innovation to continue to bring down carbon intensity of corn ethanol and also to get our industry at zero as a really important feedstock. >> . >> do biofuels responsible for high gas prices? >> quite the opposite. and to bring down the price of the pump for every driver.

those are important to read use carbon inventions in the transportation sector. that's why the united auto workers you make gray automobiles that the uaw is the largest in iowa with those making farm equipment and they are consistently talking about the fact they are supportive. and with electric vehicles and biofuels are critical to reduce carbon emissions and petroleum use? >> yes.

we appreciate uaw had strong remarks to epa in support. we have very ambitious climate goals and no one-size-fits-all solution. we need every tool that means biofuels along with electrification. and that would be met in the long-term that the medium-term 270 million cars are on the road today so biofuels allow us to have a solution for those cars to bring down the admissions and clean it up affordably in an available way from consumers. and then to further drive down the carbon intensity. and then they incentives provide a level playing field.

>> and i will yield to my friend from iowa. >> i appreciate that. thank you, mr. chair and i ask for unanimous consent the renewable fuels association and the clean fuel alliance. >> i think we've all set a record for unanimous consent request. >> and to address the issues brought forward and members of the committee as well. the average price of crude oil is $39.68 a barrel in the average closing price of 2022 so far is $85.72 a barrel today it was $95.46 per barrel of crude oil.

is that do to the rfs? >> absolutely not. the primary factor with the cost of fuel is the cost of crude oil and it has nothing to do with the rfs. but the cost of fuel is because of the rfs but it's the cost of oil. so i reject that and i those folks out there are listening and paying attention to that the price of our fuel is the price of the oil. we had the rfs around for a number of years and the reason we have is congress asks for it to be established so we can reduce greenhouse gas emissions.

the folks across the midwest the farmers and producers responded to the call to congress and they developed systems that produce clean reliable energy sources. and i reject the premise that will refineries are more important than my rural community. as you look to 2023 and beyond america's farmers and the biofuel sector are best positioned to work with this administration and others to put renewable fuel standard back on track to have a secure clean energy future. as much as the biden administration has the all electric world electric fuel is here to stay with 90 percent of cars and trucks and 80 percent of new vehicles fail running on gasoline or flex fuel biofuel is the key

pathway to the carbonized the transportation sector and the rfs is the policy engine to make this possible. that act of 2005 and a security act which mandated the rfs in part to help reduce america's dependence on foreign nations to firmly believe energy security is national security and while president biden he is turning his back on the rfs in favor of electric vehicles which will only make us more dependent on china and science is on our side. it is able to over a decade between 2008 and 2020 the rfs saved nearly 1 billion metric tons of carbon dioxide

equivalent and it's only getting cleaner the latest research shows ethanol is less carbon intensive and that's less intensive than petroleum-based diesel and biofuel can further reduce greenhouse gas emissions and then the conservation practices so let's follow the science of these biofuel energy policy. is not only the clean energy source that biofuel is great for our economy and pocketbooks. iowa corn and soybean farmers had record crop yields it accounts for over $5 billion gdp generates two.$6 billion per household and supports

46000 jobs in iowa alone. in my rural areas. it's the cheapest form of fuel by about 50 cents. and with record high inflation makes sense to make it more readily available i continue to urge the administration to allow those sales of the 15 as soon as possible. not only supports consumers but the nearly 300 retail stations in iowa that want to provide a cleaner choice at the pump. the rfs is the law and refiners have had 15 years to come into compliance renewable fuels it is your choice. any claim that prices are increasing it is hogwash.

it cost them money the last three administrations it does not cause harm to refiners. smaller exemptions go against congressional intent and the supreme court reinforced the strong support america with consumer access to affordable home grown biofuel today, tomorrow and we also hope for many years to come. thank you. i will yield back. >> . >> thank you for your attendance and your patience and your questions and comments. and the price at the pump so look at the numbers.

in the price of oil at the pump is $62, 6228 and it's roughly $94 per barrel an increase of 51 percent. >> i have a couple of questions and has some wrap up questions as well. senator worker are you out there? >> the first one i would like to ask is when with respect to the fuel standard which has gaseous fuels from renewable biomass sources and they are

generally intended to be fuel neutral and technology neutral. with this in mind to have a broader definition of the federal renewable fuel standard. how has the broader definition benefited and how has it encouraged investment to produce cleaner fuels in your state? >> thank you for that question. the state of oregon we do basically value any of the transportation fuels so in addition to the biofuels have propane and renewable propane and that hydrogen as well. so that we would like to see is the natural gas with

propane and then even to switch and the benefit of the natural gas and those are the fuels with the cost of those fuels leading to more infrastructure that target space and with those carbon intensities and those that we see in the state of oregon for the future of the oregon fuels program. >> . >> and what qualifies as an advanced fuel under renewable fuel standards credit technology neutral program

have more opportunity for your member companies to participate in the current structure of the fuel standard? >> thank you for the question. we are low carbon fuel so we appreciate the concept of a low carbon fuel standard and as you stated that this is technology neutral and that we have the analysis biofuels like ethanol that we are considering the practices that continue to bring down the carbon intensity so if you have a program that is truly technology neutral that allows for the higher biofuel blends that is the place we can play and we can help achieve low carbon goals.

i will add it is very complementary to the rfs. they work well in tandem talking about that value to continue to make sure the lowest of the logos into the market. >> . >> . >> and i appreciate the perspectives of our panel to share with us that are pulling us all together and thank you for joining us in person. that thoughtful action that fuel standard with the

compromise and collaboration. and where you believe there might be common ground on the standards going forward and we will. >> i heard a lot of consensus about the importance of competition and marketplace certainty and consumer choice as we make sure we drive toward low carbon fuel options this is a place where biofuels have a role to play. we need a renewable fuel standard enforced and those making the decisions throughout the fuel supply chain so we understand what the obligations are to bring down volatility. we look forward to see the epa

fix and finalize the blending obligations have done that as expeditiously as possible that will be good for all parties. >> senator to have another question. >> very briefly, i think i have most of the answers but i would like for you to respond about the statement or the thoughts of the anti- ethanol study done earlier this week. >> i appreciate the comments. it's very concerning when you get them in the appeal is of the methodology and that is untethered from reality. look at the consensus of epa the department of energy and the california resources board and the department of environmental quality and

ethanol is lower carbon and gasoline and that advantage continues to increase. >> . >> . >> i have to run really quick after i make a comment or two there is consensus so in my view nothing screams lack of certainty than lack of exemption is it a coalminer a

carmaker? it says you have the permit to move forward, how can you possibly conduct business as somebody comes back two years later to revoke it? to me that is lack of certainty. from the university of wisconsin i will not argue that. i don't know what is a lifecycle and when does it start and what kind of emissions to get crude out of the ground. we need to have some consistency in using the same measure of data with the american public quite frankly and those who make these decisions. thank you mr. chairman. i don't have a question i just think the witnesses.

>> . >> are going to find the middle with these complex issues. we look forward to working with your team and others on this committee to find a pathway going forward the situation is not perfect we have to do better. >> and to ask a question i call it common ground and then so let me just ask the other witnesses if they word respond as well? you go first. >> thank you for the question

that as mentioned it is something that we hear quite a bit in the market. and certainty regulatory certainty to be established that is undertaking those standards after 2035 and the transparency of what we do as well as the market aspect and in the pillars of does really well.

>> thank you mr. chairman. >> sometimes that helps. so let's have the information agency published data on what the fob export price of gasoline is let's have them breakdown the component there is a lot of discussion of crude oil causing prices to go up. of course it is. another component in the manufacturing of transportation fuel. and to get a little more work we may get some consensus and a sense of where are the hotspots beyond crude oil driving and gasoline prices? >> thank you for that

suggestion. >> they do not oppose biofuels those that are lower in knitting are not a problem and where we depart is the ability of everybody to share and to blend or pay higher prices and lower admitting biofuels. also where we depart is because as we have been talking about a recent studies suggest ethanol could be 24 percent higher than petroleum-based fuels. some information is key and senator must explained it is a choice but it's not when you don't have access to guide biofuels so they could help us

enormously that instead of resisting the freedom of information act request related to homages each refinery paying? what is the actual cost of compliance? we understand it is compliance so more forthcoming data was certainly helped to dispel the disagreements. there are substantial barriers and they are substantial barriers we have to change that everyone it to be sensible and not distort competition and bring down the price of gasoline and diesel.

>> i have a quick question we have a vote underway. >> and the previous administration those that issue compared to the obama administration including issuing waivers for refineries by companies like exxon mobil. is that your understanding? >> that is correct and the previous administration apa increase the number of refinery exemptions by a factor of six a sixfold that resulted without any information or transparency as to how it is they determine those particular refiners reached a narrow threshold to have disproportionate economic harm so we are pleased to see

it takes a different approach working to follow the law that avenue which is available. >> thank you for that response. in closing and certainly from the witnesses but also from those to be remote remotely grateful to the panel and it is not an easy issue and it is long overdue and has been helpful for me and some of my colleagues to raise as many questions as we have answered but it's a good start how much of this committee across party lines we try to find consensus. thank you all for joining us today and then to help safeguard that security boost and then reduce greenhouse gas

emissions and then continuing and members of our colleagues in the senate and other stakeholders to improve the renewable fuel standard program and then with greater sustainability to empower our allies senators will be allowed to have written on wednesday march 2nd 2 send them to you by march 16 and with that the hearing is adjourned. [inaudible conversations]

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