U.S. Senate committee to hold hearing on biofuel mandates -sources

NEW YORK, Feb 10 (Reuters) - A U.S. Senate committee is expected to hold a hearing around the nation's biofuel blending laws next week, as the Biden administration works to finalize controversial proposals around blending requirements and exemptions for oil refiners, according to three sources familiar with the matter.

The Senate Committee on Environment and Public Works, whose chairman is Democratic Senator Tom Carper from Delaware and whose ranking member is Republican Senator Shelley Moore Capito from West Virginia, is due to hold the hearing on Wednesday, the sources said. The committee will hold the event to hear concerns from stakeholders around the U.S. Renewable Fuel Standard (RFS).

The offices of Carper and Capito did not immediately respond to requests for comment at the time of publication.

The RFS has consistently pitted the oil and corn lobbies against each other, both major political constituency groups that are top of mind for politicians as the United States readies for midterm elections later this year.

Under the RFS, oil refiners must blend billions of gallons of biofuels, including corn-based ethanol, into the nation's fuel mix, or buy tradable credits from those that do. Small refineries can receive waivers, known as Small Refinery Exemptions (SREs), from the mandates if they prove the requirements would be too financially harmful.

The hearing is set to happen as the U.S. Environmental Protection Agency works to decide on sweeping policy changes to the RFS. In December, the agency proposed a package of actions that would retroactively reduce biofuel blending volume mandates for 2020 and 2021, while the 2022 proposal would increase requirements.

At the time, the EPA also proposed a rejection of 65 pending applications for SREs. read more

Groups across both industries have lobbied around their concerns over the proposal. At a public hearing in early January, oil and biofuel groups weighed in on the recent blending requirement proposal, along with labor groups such as the United Steelworkers and the Pennsylvania Manufacturers' Association.

The Democratic majority for the committee has invited as witnesses Emily Skor, chief executive of Growth Energy, a biofuels trade association, and a representative for the Oregon Clean Fuels Program, a state credit program around carbon intensity, two sources said.

Meanwhile, the Republican minority has invited to testify a representative for the Energy Policy Research Foundation Inc, an energy economics and policy non-profit organization, as well as LeAnn Johnson Koch, a partner at Perkins Coie LLP, who represents the oil refining industry and other industrial clients, two sources said.

Reporting by Stephanie Kelly and Jarrett Renshaw Editing by Marguerita Choy

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

A New-York-based correspondent covering the U.S. crude market and member of the energy team since 2018 covering the oil and fuel markets as well as federal policy around renewable fuels.