The Subcommittee on Environment, chaired by Rep. John Shimkus (R-IL), held a hearing today examining the 21st Century Transportation Fuels Act, a discussion draft led by Chairman Shimkus and Rep. Bill Flores (R-TX) to reshape federal transportation fuel policies.
“Rather than looking at individual federal transportation fuel policies on their own, the draft 21st Century Transportation Fuels Act takes a wider view of those policies and considers how they might work together to bring more value to consumers and more certainty to stakeholders. The draft would transition from blend-specific mandates to performance-based standards for future fuels and vehicles, remove long-standing barriers to the availability and usability of higher ethanol blends, provide an additional decade of certainty for advanced biofuels, and harmonize EPA and DOT vehicle efficiency programs,” said #SubEnvironment Chairman Shimkus.
“I am most concerned about what makes sense for the interests of consumers, especially as it relates to access to, pricing for, and the availability and quality of the engines and fuels that consumers demand or that federal legislation requires. These are issues that were tangentially discussed in our hearings, but I feel can only be appropriately honed when people are evaluating a concrete proposal and providing feedback about the best way to accomplish these goals. To me, the bottom line is that new fuels and vehicles must first and foremost deliver benefits to consumers while improving our environment,” said Full Committee Chairman Greg Walden (R-OR).
“Since the RFS was first established in 2005 and expanded in 2007, much has changed in the market for transportation fuels. If federal policies are not routinely evaluated and updated to reflect market conditions, consumers end up having less than optimal choices,” said Rep. Flores.
- Emily Skor, CEO, Growth Energy (Opening Statement)
- R. Timothy Columbus, Senior Counsel, Steptoe and Johnson LLP, on behalf of the National Association of Convenience Stores and Society of Gasoline Marketers (Opening Statement)
- Geoff Cooper, President and CEO, Renewable Fuels Association (Opening Statement)
- Mike McAdams, President, Advanced Biofuels Association (Opening Statement)
- Chet Thompson, President, American Fuel and Petrochemical Manufacturers (Opening Statement)
- Kurt Kovarik, Vice President, Federal Affairs, National Biodiesel Board (Opening Statement)
- David Fialkov, Vice President, Government Relations, National Association of Truck Stop Owners (Opening Statement)
- Wesley Spurlock, Past President and Chairman, National Corn Growers Association (Opening Statement)
- Manning Feraci, Director, Federal Government Affairs, The Coalition for Renewable Natural Gas (Opening Statement)
- Steve Zimmer, Executive Director, United States Council for Automotive Research LLC (Opening Statement)
- Brooke Coleman, Executive Director, Advanced Biofuels Business Council (Opening Statement)
Referring to ethanol, #SubEnvironment Chairman Shimkus asked Mr. Spurlock, “Wouldn’t some refiners be more competitive if they were to opt for this lower cost source of octane?” Mr. Spurlock answered, “Yes, I feel that they would.”
#SubEnvironment Chairman Shimkus asked Mr. Columbus, “Would your retailers like lower prices for the exact same fuel or higher prices for the exact same fuel?”
Mr. Columbus replied, “Retailers want lower prices. We interface with the consumer everyday and the simple reality is that the competition drives the price to the lowest possible level and that includes the use of feed stocks by mid-level blenders as well as refiners to generate the lowest cost of product for the consumer.”
Rep. Flores asked Mr. Columbus whether or not consumers can influence the cost of gasoline. Mr. Columbus stated, “The short answer to that is absolutely. First of all, I don’t know how you artificially raise the fuel price. If we knew how to do that I am telling you we would’ve done it a long time ago. I always laugh about the price signs, but this is the most transparent commodities market on the face of the earth, so at the end of the day [the consumer] drives price down to the lowest level – to the level that the low-cost provider is prepared to sell it.”
Rep. Flores continued, “So if we’re talking about increasing octane – the consumer is going to revolt if the suppliers elect anything other than the lowest cost solution would you agree with that? Mr. Columbus responded, “Totally, I promise you they will vote with their feet.”
The Majority Memorandum, witness testimony, and an archived webcast are available online HERE.