* Ethanol advocates to meet with members of Congress
* Lawmakers introduce bill essentially ending ethanol
* Trade group says refiner problems "self made"
By Ayesha Rascoe
WASHINGTON, April 10 U.S. ethanol producers are
taking their case for protecting the nation's biofuel mandate
directly to lawmakers this week, as the latest Congressional
push to revamp federal renewable fuel targets kicks off on
Growth Energy, a pro-ethanol trade group, said producers
from Illinois, Colorado, Iowa and other Midwestern states would
meet with their representatives in Congress to parry what they
called a "desperate" attempt by oil companies to stamp out
renewable fuel use.
They plan to reiterate to lawmakers their arguments that the
ethanol mandate has helped to reduce U.S. dependence on foreign
"When we educate policy makers, they get it," Growth Energy
Chief Executive Tom Buis told reporters.
The clash over the future of the Renewable Fuel Standard,
which requires rising volumes of biofuels - chiefly ethanol made
from corn - to be blended into U.S. gasoline and diesel
supplies, has intensified in recent weeks as refiners warned the
mandate could push up costs at the pump.
REFORMING THE RFS
Congressman Bob Goodlatte of Virginia on Wednesday
introduced legislation that would essentially eliminate the RFS
in order, he said, "to help protect consumers, producers, and
the American economy."
Goodlatte and fellow Republican Steve Womack of Arkansas was
joined by Democrats Jim Costa of California and Peter Welch of
Vermont and other lawmakers.
The legislation would eliminate corn-based ethanol targets,
which make up the vast majority of the biofuel mandate. It would
also cap the amount of ethanol that can be blended into gasoline
at 10 percent, while requiring the government to set targets for
cellulosic ethanol use at levels of actual production.
Refiners have been required to buy credits for cellulosic
biofuels, made from sources such as grasses, wood chips and
agricultural waste, even though the fuel has not been
The lawmakers backing the bill said the renewable fuel
mandate has raised corn prices, pushing up food prices and
hurting livestock producers.
"The debate is over," Costa said at a press conference. "The
RFS, as we know it, is not sustainable and it's not good for
American long term energy needs."
Goodlatte said he believes support for changing the mandate
is growing and that this effort may succeed where prior measures
ROCKY RIN MARKET
Prices for biofuel credits spiked earlier this year, rising
from a penny a gallon in December to more than a dollar in
March. Refiners are required to buy the credits, known as RINs,
to comply with the federal mandate.
Oil companies blame the RIN price spike on slumping demand
and other factors that have pushed refiners toward a point when
the law will require the use of more ethanol than can be
physically blended into the fuel supply at the 10 percent per
gallon level they prefer.
Refiners refer to this problem as the "blend wall."
Ethanol supporters blame the credit cost volatility on
refiners' opposition to allowing higher ethanol blends at the
gasoline pump. "Any problems that the refiners are having with
the blend wall are self made," Buis said.
The U.S. Environmental Protection Agency has authorized use
of up to 15 percent ethanol in gasoline for cars built since the
2001 model year, or about two-thirds of vehicles on the road.
Refiners say the higher blend could damage older vehicles,
and gasoline station operators and oil refiners have voiced
concerns they could be held liable if engines are damaged.
The renewable fuel debate has divided lawmakers along
regional lines, with lawmakers from grain producing states such
as Iowa and Illinois strongly supporting the mandate.
So far, these lawmakers have been able to fend off attempts
to pare down or rescind the fuel targets, including similar
bills introduced by Goodlatte during the last Congress.
Buis expressed confidence that Congress would keep the
mandate intact. "We think we have the support to stop this,"
(Reporting by Ayesha Rascoe; editing by Ros Krasny and Phil