[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]









                      THE RENEWABLE FUEL STANDARD:
                A TEN	YEAR REVIEW OF COSTS AND BENEFITS

=======================================================================

                             JOINT HEARING

                               BEFORE THE

                     SUBCOMMITTEE ON ENVIRONMENT &
                       SUBCOMMITTEE ON OVERSIGHT

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            November 3, 2015

                               __________

                           Serial No. 114-47

                               __________

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


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              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                   HON. LAMAR S. SMITH, Texas, Chair
FRANK D. LUCAS, Oklahoma             EDDIE BERNICE JOHNSON, Texas
F. JAMES SENSENBRENNER, JR.,         ZOE LOFGREN, California
    Wisconsin                        DANIEL LIPINSKI, Illinois
DANA ROHRABACHER, California         DONNA F. EDWARDS, Maryland
RANDY NEUGEBAUER, Texas              SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas             ERIC SWALWELL, California
MO BROOKS, Alabama                   ALAN GRAYSON, Florida
RANDY HULTGREN, Illinois             AMI BERA, California
BILL POSEY, Florida                  ELIZABETH H. ESTY, Connecticut
THOMAS MASSIE, Kentucky              MARC A. VEASEY, Texas
JIM BRIDENSTINE, Oklahoma            KATHERINE M. CLARK, Massachusetts
RANDY K. WEBER, Texas                DON S. BEYER, JR., Virginia
BILL JOHNSON, Ohio                   ED PERLMUTTER, Colorado
JOHN R. MOOLENAAR, Michigan          PAUL TONKO, New York
STEVE KNIGHT, California             MARK TAKANO, California
BRIAN BABIN, Texas                   BILL FOSTER, Illinois
BRUCE WESTERMAN, Arkansas
BARBARA COMSTOCK, Virginia
DAN NEWHOUSE, Washington
GARY PALMER, Alabama
BARRY LOUDERMILK, Georgia
RALPH LEE ABRAHAM, Louisiana
                                 ------                                

                      Subcommittee on Environment

                 HON. JIM BRIDENSTINE, Oklahoma, Chair
F. JAMES SENSENBRENNER, JR.          SUZANNE BONAMICI, Oregon
RANDY NEUGEBAUER, Texas              DONNA F. EDWARDS, Maryland
RANDY WEBER, Texas                   ALAN GRAYSON, Florida
JOHN MOOLENAAR, Michigan             AMI BERA, California
BRIAN BABIN, Texas                   MARK TAKANO, California
BRUCE WESTERMAN, Arkansas            BILL FOSTER, Illinois
GARY PALMER, Alabama                 EDDIE BERNICE JOHNSON, Texas
RALPH LEE ABRAHAM, Louisiana
                                 ------                                

                       Subcommittee on Oversight

                 HON. BARRY LOUDERMILK, Georgia, Chair
F. JAMES SENSENBRENNER, JR.,         DON BEYER, Virginia
    Wisconsin                        ALAN GRAYSON, Florida
BILL POSEY, Florida                  ZOE LOFGREN, California
THOMAS MASSIE, Kentucky              EDDIE BERNICE JOHNSON, Texas
BILL JOHNSON, Ohio
DAN NEWHOUSE, Washington
LAMAR S. SMITH, Texas






















                            C O N T E N T S

                            November 3, 2015

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

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

                           Opening Statements

Statement by Representative Jim Bridenstine, Chairman, 
  Subcommittee on Environment, Committee on Science, Space, and 
  Technology, U.S. House of Representatives......................    10
    Written Statement............................................    11

Statement by Representative Suzanne Bonamici, Ranking Minority 
  Member, Subcommittee on Enviorment, Committee on Science, 
  Space, and Technology, U.S. House of Representatives...........    13
    Written Statement............................................    14

Statement by Representative Barry Loudermilk, Chairman, 
  Subcommittee on Oversight, Committee on Science, Space, and 
  Technology, U.S. House of Representatives......................    15
    Written Statement............................................    16

Statement by Representative Donald S. Beyer, Jr., Ranking 
  Minority Member, Subcommittee on Oversight, Committee on 
  Science, Space, and Technology, U.S. House of Representatives..    17
    Written Statement............................................    18

                               Witnesses:

Dr. Terry Dinan, Senior Advisor, Congressional Budget Office
    Oral Statement...............................................    19
    Written Statement............................................    21

Mr. Ed Anderson, CEO and President of WEN-GAP, LLC
    Oral Statement...............................................    45
    Written Statement............................................    47

Dr. John DeCicco, Research Professor, University of Michigan 
  Energy Institute
    Oral Statement...............................................    50
    Written Statement............................................    55

Mr. Brooke Coleman, Executive Director, Advanced Biofuels 
  Business Council
    Oral Statement...............................................    73
    Written Statement............................................    75

Mr. Charles Drevna, Distinguished Senior Fellow, Institute for 
  Energy Research
    Oral Statement...............................................    99
    Written Statement............................................   101
Discussion.......................................................   101

             Appendix I: Answers to Post-Hearing Questions

Dr. Terry Dinan, Senior Advisor, Congressional Budget Office.....   132

Dr. John DeCicco, Research Professor, University of Michigan 
  Energy Institute...............................................   136

Mr. Brooke Coleman, Executive Director, Advanced Biofuels 
  Business Council...............................................   146

Mr. Charles Drevna, Distinguished Senior Fellow, Institute for 
  Energy Research................................................   153

            Appendix II: Additional Material for the Record

Documents submitted by Representative Suzanne Bonamici, Ranking 
  Minority Member, Subcommittee on Enviorment, Committee on 
  Science, Space, and Technology, U.S. House of Representatives..   162

Documents submitted by Representative Jim Bridenstine, Chairman, 
  Subcommittee on Enviorment, Committee on Science, Space, and 
  Technology, U.S. House of Representatives......................   171

Statement submitted by Representative Eddie Bernice Johnson, 
  Committee on Science, Space, and Technology, U.S. House of 
  Representatives................................................    10
    Written Statement............................................   177

 
                      THE RENEWABLE FUEL STANDARD:
                          A TEN-YEAR REVIEW OF
                           COSTS AND BENEFITS

                              ----------                              


                       TUESDAY, NOVEMBER 3, 2015

                  House of Representatives,
            Subcommittee on Environment and
                  Subcommittee on Oversight
               Committee on Science, Space, and Technology,
                                                   Washington, D.C.

    The Subcommittees met, pursuant to call, at 10:05 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Jim 
Bridenstine [Chairman of the Subcommittee on Environment] 
presiding.




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]





    Chairman Bridenstine. The Subcommittee on Environment and 
Oversight will come to order.
    Without objection, the Chair is authorized to declare 
recesses of the Subcommittee at any time.
    Welcome to today's hearing entitled the ``Renewable Fuel 
Standard: A Ten-Year Review of Costs and Benefits.'' I 
recognize myself for five minutes for an opening statement.
    Good morning, and welcome to today's joint hearing of the 
Environment and Oversight Subcommittees examining the Renewable 
Fuel Standard. Today, we will hear from witnesses on the cost 
and environmental impact of this complex and misguided mandate, 
as well as the future consequences if Congress does not take 
action.
    The RFS is an example of the federal government picking 
winners and losers by forcing the use of renewables in 
transportation fuels. The mandate was supported by a bipartisan 
coalition, the ethanol industry, and environmental 
organizations; and justified by claims of environmental 
benefits and enhanced U.S. energy security.
    Unfortunately, but not surprisingly, eight years after the 
current RFS was expanded by Congress as part of the Energy 
Independence and Security Act of 2007, these promises have yet 
to materialize. Congress designed the RFS using flawed 
projections about gasoline consumption, availability of 
renewable fuel infrastructure, bio-refinery technology, and the 
market demand for renewable fuels. In almost every category, 
these projections do not reflect today's energy market.
    Today, demand for gasoline is significantly lower than was 
forecast when the RFS became law. A sluggish economy and 
improvements in vehicle energy efficiency continue to hold down 
gasoline consumption. And technology advancements have unlocked 
our domestic resources of oil and gas to an extent that was not 
anticipated when the RFS was designed.
    Incorporating renewable fuels was supposed to deliver 
environmental benefits. But time and again, researchers, 
including one of our witnesses today, have found that corn 
ethanol produced to meet the RFS makes air quality worse, and 
has higher lifecycle emissions than gasoline. And while corn-
based fuel ethanol production, supported by the requirements of 
this standard, has grown substantially since EISA became law, 
the advanced biofuels and cellulosic ethanol industries 
expected under the RFS still aren't ready for primetime.
    The RFS is an egregious perversion of the free market. 
Instead of a transportation fuel market driven by consumer 
demand, we are stuck with a complex mandate based on outdated 
assumptions about gasoline demand, environmental impact, and 
technological readiness. Each year, the RFS requires still 
higher volumes of renewable fuel, which now exceed the volumes 
that can be accommodated given current gasoline demand.
    The RFS mandate is unworkable even with EPA's dubious 
assertion that E15 can safely be used in select vehicles, even 
though most vehicles were designed to use E10, gasoline 
containing not more than ten percent ethanol. This is on top of 
the simple fact that consumers do not want these fuels. Just .5 
percent of what HollyFrontier--a merchant refiner with 
facilities in my district--sells are products greater than E10, 
one-half of one percent.
    And because the ethanol blending volumes required under law 
are impossible to meet with the current production levels of 
E10, E15, and other higher level ethanol blends, including E85, 
refiners are left at the mercy of uncertain annual waivers from 
the EPA. I'm going to repeat that. Refiners are left at the 
mercy of uncertain annual waivers from the EPA to keep the 
mandatory blending volumes at achievable levels. When EPA even 
bothers to follow the law and announce annual requirements--and 
that is when EPA bothers to follow the law and announce annual 
requirements on time.
    Refiners have had to file lawsuits to get the EPA to do 
their job and announce the annual blend levels, which is 
absurd. Congress cannot continue to sit back and leave the EPA 
to manage the consequences of an unrealistic and poorly crafted 
law.
    So what is the end result of this confusing mandate? 
American consumers are stuck with higher prices across the 
economy. The mandate has already increased prices at the pump, 
and if the RFS is enforced as enacted, the Congressional Budget 
Office estimates that E10 fuel prices could increase by 15 
percent or more by 2017.
    By increasing demand for corn, the RFS also distorts 
commodity prices, raising the cost of food for American 
families. We will hear testimony that the RFS costs the chain 
restaurant industry $3.2 billion a year in higher food prices, 
which must be passed on to consumers, our constituents.
    The federal government's RFS mandate has led to multiple 
negative consequences, propelled by willful disregard for 
consumer preferences and flawed economic and environmental 
assumptions. Demand for fuels with blends of ethanol greater 
than E10 is very limited, even with the most favorable market 
conditions. And more corn ethanol hasn't helped the 
environment. It hasn't reduced costs or encouraged the 
development of commercial-scale advanced biofuels.
    Federal mandates are the wrong approach to fuel innovation, 
and the RFS is a prime example of the elites in Washington, 
D.C., believing they know best, imposing a misguided standard, 
then standing back while it damages our economy.
    I want to thank our witnesses today for testifying on the 
challenges of the RFS--testifying on the challenges the RFS has 
created in today's energy market, and I look forward to a 
discussion about the consequences caused by the federal 
government's intervention in the American energy market.
    It's time for Congress to fix the problems caused by this 
outdated and ill-conceived law and pass legislation to repeal 
the RFS.
    [The prepared statement of Chairman Bridenstine follows:]

           Prepared Statement of Subcommittee on Environment
                        Chairman Jim Bridenstine

    Good morning and welcome to today's joint hearing of the 
Environment and Oversight subcommittees, examining the Renewable Fuel 
Standard. Today, we will hear from witnesses on the cost and 
environmental impact of this complex and misguided mandate, as well as 
the future consequences if Congress does not take action.
    The RFS is an example of the federal government picking winners and 
losers by forcing the use of renewables in transportation fuels. The 
mandate was supported by a bipartisan coalition, the ethanol industry, 
and environmental organizations, and justified by claims of 
environmental benefits and enhanced U.S. energy security.
    Unfortunately, but not surprisingly, eight years after the current 
RFS was expanded by Congress as part of the Energy Independence and 
Security Act of 2007, these promises have yet to materialize. Congress 
designed the RFS using flawed projections about gasoline consumption, 
availability of renewable fuel infrastructure, bio-refinery technology, 
and the market demand for renewable fuels. In almost every category, 
these projections do not reflect today's energy market.
    Today, demand for gasoline is significantly lower than was forecast 
when the RFS became law. A sluggish economy and improvements in vehicle 
energy efficiency continue to hold down gasoline consumption. And 
technology advancements have unlocked our domestic resources of oil and 
gas to an extent that was not anticipated when the RFS was designed.
    Incorporating renewable fuels was supposed to deliver environmental 
benefits. But time and again, researchers--including one of our 
witnesses today - have found that corn ethanol produced to meet the RFS 
makes air quality worse, and has higher life cycle emissions than 
gasoline.
    And while corn-based fuel ethanol production, supported by the 
requirements of this standard, has grown substantially since EISA 
became law, the advanced biofuels and cellulosic ethanol industries 
expected under the RFS still aren't ready for primetime.
    The RFS is an egregious perversion of the free market. Instead of a 
transportation fuel market driven by consumer demand, we are stuck with 
a complex mandate based on outdated assumptions about gasoline demand, 
environmental impact, and technological readiness. Each year, the RFS 
requires still higher volumes of renewable fuel which now exceed the 
volumes that can be accommodated given current gasoline demand.
    The RFS mandate is unworkable even with EPA's dubious assertion 
that E15 can safely be used in select vehicles, even though most 
vehicles were designed to use E10, gasoline containing not more than 10 
percent fuel ethanol. This is on top of the simple fact that consumers 
do not want these fuels. Just 0.5 percent of what HollyFrontier, a 
merchant refiner with facilities in my district, sells are products 
greater than E10. One half of one percent!
    And because the ethanol blending volumes required under law are 
impossible to meet with the current production levels of E10, E15, and 
other higher level ethanol blends, including E85, refiners are left at 
the mercy of uncertain annual waivers from the EPA to keep the 
mandatory blending volumes at achievable levels--when EPA even bothers 
to follow the law and announce annual requirements on time. Refiners 
have had to file lawsuits to get the EPA to do their job and announce 
the annual blend levels, which is patently absurd. Congress cannot 
continue to sit back and leave the EPA to manage the consequences of an 
unrealistic and poorly crafted law.
    So what is the end result of this confusing mandate? American 
consumers are stuck with higher prices across the economy. The mandate 
has already increased prices at the pump, and if the RFS is enforced as 
enacted, the Congressional Budget Office estimates that E10 fuel prices 
could increase by 15 percent or more by 2017.
    By increasing demand for corn, the RFS also distorts commodity 
prices, raising the cost of food for American families. We will hear 
testimony that the RFS costs the chain restaurant industry $3.2 billion 
a year in higher food prices, which must be passed on to consumers, our 
constituents.
    The federal government's RFS mandate has led to multiple negative 
consequences, propelled by willful disregard for consumer preferences 
and flawed economic and environmental assumptions. Demand for fuels 
with blends of ethanol greater than E10 is very limited, even in the 
most favorable market conditions. And more corn ethanol hasn't helped 
the environment, reduced costs, or encouraged the development of 
commercial scale advanced biofuels.
    Federal mandates are the wrong approach to fueling innovation, and 
the RFS is a prime example of the elites Washington, DC believing they 
know best, imposing a misguided standard, then standing back while it 
damages our economy.
    I want to thank our witnesses today for testifying on the 
challenges the RFS has created in today's energy market, and I look 
forward to a discussion about the consequences caused by the federal 
government's intervention in the American energy market.
    It's time for Congress to fix the problems caused by this outdated 
and ill-conceived law, and pass legislation to repeal the RFS.

    Chairman Bridenstine. I now recognize the Ranking Member, 
the gentlewoman from Oregon, for an opening statement.
    Ms. Bonamici. Thank you very much, Mr. Chairman, and thank 
you to our witnesses for being here today to discuss the 
history and future of the Renewable Fuel Standard.
    In 2005, Congress established the Renewable Fuel Standard 
as a way to both reduce our dependence on foreign oil and 
reduce greenhouse gas emissions. The RFS policy also had the 
added benefit of advancing rural economic development. In 2007, 
Congress expanded the RFS to drive additional innovation and 
investment in the biofuels industry. And now, ten years later, 
the original goals and motivation for the Renewable Fuel 
Standard still remain valid.
    Despite this fact, we will hear today from some who will 
assert that the RFS is a failed policy and that it should be 
repealed. I respectfully disagree. Our nation's long-term 
economic and energy security is tied to our ability to 
diversify our energy portfolio and to transition to lower 
carbon energy sources.
    Biofuels have an important part to play in this energy 
future. It would be better if we were further along, but the 
Renewable Fuel Standard has been, and should continue to be, a 
critical mechanism for fostering the development of this 
emerging industry.
    In my home State of Oregon, we've recognized the 
significant opportunities in biofuels, especially with our 
State's strong agriculture and forestry industries. For 
example, Red Rock Biofuels is investing about $200 million to 
build a biorefinery facility in southern Oregon where they will 
transform waste biomass from forests and sawmills into jet 
fuel. Now, that's a place that really needs the jobs, down 
there in southern Oregon. Red Rock plans to sell 6 million 
gallons of its renewable jet fuel each year to Southwest 
Airlines and FedEx Express. This type of innovation will 
greatly reduce the carbon footprint of our airlines and create 
jobs in an area that needs them.
    Additionally, in my Congressional district, Summit Natural 
Energy converts food processing and agricultural wastes into 
bioethanol for racecars. And I've spoken with the racecar 
drivers. They rave about this product.
    The potential of biofuels, especially advanced biofuels, in 
addressing climate change is real and it is something that we 
should be encouraging, not trying to undermine. Reducing carbon 
pollution from the transportation sector is critical in our 
fight against climate change, and the economic costs of not 
acting are catastrophic.
    In fact, a recent report by Citigroup GPS shows that the 
costs of climate inaction could be up to $44 trillion by 2060. 
We need to use a variety of mechanisms to curb greenhouse 
gases, and the RFS is one of these tools. Most recent estimates 
of the Argonne National Laboratory's Greenhouse Gases, 
Regulated Emissions, and Energy Use in Transportation model 
have shown that corn ethanol can produce up to 48 percent less 
greenhouse gases than gasoline across the entire lifecycle.
    Investments in first-generation biofuels are serving as an 
important bridge to the development of advanced biofuels, 
including cellulosic biofuels. Just last week, DuPont opened 
the world's largest cellulosic ethanol plant in Iowa. If done 
correctly in a sustainable and thoughtful manner, we can 
produce biofuels that will lower carbon emissions of our 
transportation sector.
    A viable competitive advanced biofuels industry relies on 
the infrastructure developed for the first-generation 
conventional biofuels. The RFS was designed to provide market 
certainty to drive the production of domestically produced 
biofuels. We have seen what an industry can do when given a 
strong market signal, a signal that the RFS can provide.
    Overreliance on a limited range of technologies and finite 
resources is unreasonable. Our nation cannot drill our way to 
energy security and a thriving economy. We must continue to 
take steps to mitigate climate change. We need to unleash the 
creativity of our scientists, engineers, and entrepreneurs, and 
the Renewable Fuel Standard is an important tool in spurring 
innovation and unlocking our energy potential.
    Thank you very much, Mr. Chairman. I look forward to 
hearing from the witnesses, and I yield back the balance of my 
time.
    [The prepared statement of Ms. Bonamici follows:]

           Prepared Statement of Subcommittee on Environment
                Minority Ranking Member Suzanne Bonamici

    Thank you, Mr. Chairman, and thank you to our witnesses for being 
here today to discuss the history and future of the renewable fuel 
standard.
    In 2005, Congress established the renewable fuel standard as a way 
to both reduce our dependence on foreign oil and reduce greenhouse gas 
emissions. The RFS policy also had the added benefit of advancing rural 
economic development. In 2007, Congress expanded the RFS to drive 
additional innovation and investment in the biofuels industry. And now 
ten years later, the original goals and motivation for the renewable 
fuel standard still remain valid.
    Despite this fact, we will likely hear from some today who will 
assert that the RFS is a failed policy and that it should be repealed. 
I respectfully disagree.
    Our nation's long-term economic and energy security is tied to our 
ability to diversify our energy portfolio and to transition to lower 
carbon energy sources. Biofuels have an important part to play in this 
energy future. It would be better if we were further along, but the 
renewable fuel standard has been and should continue to be a critical 
mechanism for fostering the development of this emerging industry.
    In my home state of Oregon, we have recognized the significant 
opportunities in biofuels, especially with our state's strong 
agriculture and forestry industries. For example, Red Rock Biofuels is 
investing about $200 million to build a biorefinery facility in 
Southern Oregon, where they will transform waste biomass from forests 
and sawmills into jet fuel. Red Rock plans to sell 6 million gallons of 
its renewable jet fuel each year to Southwest Airlines and FedEx 
Express. This type of innovation will greatly reduce the carbon 
footprint of our airlines, and create jobs in areas that need them. 
Additionally, in my Congressional district, Summit Natural Energy 
converts food processing and agricultural wastes into bioethanol for 
race cars--and the drivers rave about it!
    The potential of biofuels, especially, advanced biofuels, in 
addressing climate change is real and it is something that we should be 
encouraging, not trying to undermine. Reducing carbon pollution from 
the transportation sector is critical in our fight against climate 
change and the economic costs of not acting are catastrophic. In fact, 
a recent report by Citigroup GPS shows that the costs of climate 
inaction could be up to $44 trillion by 2060. We need to use a variety 
of mechanisms to curb greenhouse gases--and the RFS is one of those 
tools. Most recent estimates of the Argonne National Laboratory's GREET 
(Greenhouse Gases, Regulated Emissions, and Energy Use in 
Transportation) model have shown that corn ethanol can produce up to 48 
percent less greenhouse gases than gasoline across the entire 
lifecycle.
    Investments in first generation biofuels are serving as an 
important bridge to the development of advanced biofuels, including 
cellulosic biofuels. Just last week DuPont opened the world's largest 
cellulosic ethanol plant in Iowa. If done correctly--in a sustainable 
and thoughtful manner--we can produce biofuels that will lower the 
carbon emissions of our transportation sector.
    A viable, competitive advanced biofuels industry relies on the 
infrastructure developed for the first generation conventional 
biofuels. The RFS was designed to provide market certainty to drive the 
production of domestically produced biofuels. We have seen what 
industry can do when given a strong market signal--a signal that the 
RFS can provide.
    Overreliance on a limited range of technologies and finite 
resources is unreasonable. Our nation cannot drill our way to energy 
security and a thriving economy. We must continue to take steps to 
mitigate climate change. We need to unleash the creativity of our 
scientists, engineers, and entrepreneurs and the renewable fuel 
standard is an important tool in spurring innovation and unlocking our 
energy potential.
    Thank you, Mr. Chairman, and again thank you to our witnesses for 
being here this morning. I yield back the balance of my time.

    Chairman Bridenstine. I'd like to thank the Ranking Member.
    I now recognize the Chairman of the Subcommittee on 
Oversight, Mr. Loudermilk, for his opening statement.
    Mr. Loudermilk. Well, thank you, Mr. Chairman, and 
witnesses for being here with us today.
    I'd like to thank you for taking your time to come here and 
discuss this extremely important matter that we're facing.
    Today, we're here to examine the big-picture challenge of 
the Renewable Fuel Standard and its impact on our country and 
the American people. Ten years ago, supporters of the RFS 
promised to put our country on a path to being cleaner, 
greener, and more energy independent in a time of heavy 
dependence on foreign oil and high gas prices. Back then, 
gasoline consumption was on the rise, America relied on foreign 
oil, and renewable fuels were just starting to become an option 
for consumers.
    Fast-forward to today where the demand for gasoline is 
decreasing, our country is now considering exporting crude oil, 
and we know that ethanol and biofuels are not as clean as we 
once thought.
    In the Committee's hearing on the RFS this summer, we heard 
testimony from Dr. Jason Hill from the University of Minnesota, 
who debunked the misnomer that corn ethanol is cleaner than 
regular gasoline. Dr. Hill acknowledged that while ethanol 
fuels generally burn cleaner than gasoline at the tailpipe, if 
you look at the lifecycle emissions of ethanol, you can see 
that the process of growing and fermenting grain, and 
distilling, distributing, and combusting ethanol releases far 
more of the five particulate pollutants that contribute to 
increased particulate matter 2.5 and ozone levels than 
gasoline. In short, corn-based ethanol is simply not cleaner 
than gasoline.
    Dr. DeCicco, who joins us today, has conducted careful 
analysis of more than 100 related studies concluding that 
serious flaws exist in the government-sponsored modeling used 
to justify the RFS. It comes as no surprise that the Office of 
Inspector General for the EPA announced this month that they 
are planning to investigate whether the EPA complied with the 
reporting requirements associated with the RFS. The IG will 
also be examining whether the EPA appropriately updated the 
lifecycle analysis supporting the RFS with findings from 
studies mandated in the statute on the environmental impacts of 
biofuels. We look forward to their findings.
    It is also clear that the demand today for biofuels is far 
less than the EPA anticipated it would be. In our last hearing 
we heard from CountryMark, a farmer-owned integrated oil 
company that sells E10, E15, and E85 fuel at its stations. This 
farmer-owned small business refiner cannot sell E85 to the very 
farmers who grow the corn used for the ethanol it's blended 
because there is no demand for this fuel.
    It is also becoming clear that Americans are ill- equipped 
to make smart decisions about gasoline choices entering the 
marketplace. According to a recent study conducted by the 
Outdoor Power Equipment Institute, Americans choose to purchase 
gasoline based on price and simply don't pay attention to the 
warning labels placed at the pump. This results in consumers 
using fuels with higher blends of ethanol in lawnmowers, 
chainsaws, generators, and other small engine equipment that 
are not certified to use those fuels. This can cause damage or 
permanently destroy those products.
    And with that, Mr. Chairman, I would like to enter into the 
record a letter from Todd Teske, President of Briggs & 
Stratton, which outlines these points in further detail.
    Chairman Bridenstine. Without objection, so ordered.
    [The information appears in Appendix II]
    Mr. Loudermilk. Finally, I want to thank our witnesses 
today for testifying on the impact that the RFS has on the 
American people. It's time for Congress to make a change. When 
existing law is unworkable, Congress must listen to experts and 
adjust the law as it is needed. I hope that this hearing will 
bring to light some of the unintended consequences of the RFS, 
and provide guidance to lawmakers as we decide the future of 
this law.
    And with that, Mr. Chairman, I yield back balance of my 
time.
    [The prepared statement of Mr. Loudermilk follows:]

              Prepared Statement of Oversight Subcommittee
                       Chairman Barry Loudermilk

    Good morning everyone. I would like to welcome and thank all of our 
witnesses for being here today.
    Today, we are here to examine the big picture challenge of the 
Renewable Fuel Standard and its impact on our country and the American 
people. Ten years ago, the RFS promised to put our country on a path to 
being cleaner, greener and more energy independent in a time of heavy 
dependence on foreign oil and high gas prices. Back then gasoline 
consumption was on the rise, America relied on foreign oil, and 
renewable fuels were just starting to become an option for consumers.
    Fast forward to today where the demand for gasoline is decreasing, 
our country is now considering exporting crude oil, and we now know 
ethanol and biofuels are not as clean as we once thought.
    In the Committee's hearing on the RFS this summer, we heard 
testimony from Dr. Jason Hill from the University of Minnesota, who 
debunked the misnomer that corn ethanol is cleaner than regular 
gasoline. Dr. Hill's work showed us that while ethanol fuels generally 
burn cleaner than gasoline at the tailpipe, if you look at the 
lifecycle emissions of ethanol you can see that growing and fermenting 
grain, and distilling, distributing, and combusting ethanol releases 
far more of the five major pollutants that contribute to increased PM 
2.5 and ozone levels than gasoline. Corn-based ethanol is simply not 
cleaner than gasoline.
    Dr. DeCicco who joins us today, has conducted careful analysis of 
more than 100 related studies concluding that serious flaws exist in 
the government-sponsored modeling used to justify the RFS. It comes as 
no surprise that the Office of Inspector General for the EPA announced 
this month they are planning to investigate whether the EPA complied 
with the reporting requirements associated with the RFS and whether the 
EPA appropriately updated the lifecycle analysis supporting the RFS 
with findings from statutorily mandated studies on the environmental 
impacts of biofuels. We look forward to their findings.
    It is also clear that the demand today for biofuels is far less 
than the EPA anticipated they would be. In our last hearing we heard 
from CountryMark, a farmer-owned integrated oil company that sells E10, 
E15, and E85 fuel at its stations. This farmer-owned small business 
refiner cannot sell E85 to the very farmers who grow the corn used for 
the ethanol it's blended with because there is just no demand for this 
fuel.
    It is also becoming clear that Americans are ill--equipped to make 
smart decisions about new gasoline choices entering the market place. 
According to a recent study conducted by the Outdoor Power Equipment 
Institute, Americans choose to purchase gasoline based on price, and 
simply don't pay attention to the warning labels placed at the pump. 
This results in consumers using fuels with higher blends of ethanol in 
lawnmowers, chainsaws, generators and other small engine equipment that 
are not certified to use those fuels. This can cause damage or 
permanently destroy those products. And with that, I would like to 
enter into the record a letter from Todd Teske, President of Briggs & 
Stratton, which outlines these points in further detail.
    Finally, I want to thank our witnesses today for testifying on the 
impact that the RFS has on the American people. It's time for Congress 
to make a change. When existing law is unworkable, Congress must listen 
to experts, and adjust the law as it is needed. I hope that this 
hearing will bring to light some of the unintended consequences of the 
RFS, and provide guidance to lawmakers as we decide the future of this 
law.

    Chairman Bridenstine. Thank you, Chairman Loudermilk.
    I now recognize the Ranking Member of the Subcommittee on 
Oversight, Mr. Beyer, for his opening statement.
    Mr. Beyer. Thank you, Mr. Chairman.
    And thank you, Chairmen Bridenstine and Loudermilk, for 
holding today's hearing, and thank you to the witnesses for 
testifying.
    The greatest challenge of this generation--climate change--
requires innovative solutions if we ever hope to make a 
meaningful difference. It requires us to look at every aspect 
of our energy production and consumption. We must find ways to 
end our dependence on fossil fuels and reduce our greenhouse 
gas emissions.
    The Renewable Fuel Standard has helped us push the 
technological limits and the capacity of industry to innovate 
our transportation fuels. In the past ten years, we've seen 
increasing production of biofuels from both corn ethanol and 
advanced biofuels. And this increase has come with considerable 
advancements in how corn ethanol is produced, improving 
production efficiencies, while decreasing both the costs and 
the greenhouse gas emissions.
    The Renewable Fuel Standard was designed to integrate all 
biofuels into our fuel supply and lay the groundwork for growth 
and development of advanced biofuels with a 50 percent 
reduction in greenhouse gas emissions compared to that of 
conventional gasoline. And I'm interested in learning more 
about the advancements in this area and where we can expect 
biofuels to be in the next ten years.
    We realize there have been challenges. The EPA is prepared 
to finalize the volumetric requirements for 2014, 2015, 2016 
next month while missing--or later this month--after missing 
the statutory deadline two years in a row. And while they're 
inundated with public comments during the proposal process, 
that doesn't excuse the lengthy delay.
    The Agency has issued waivers for the required cellulosic 
biofuels and plans to do so again, but I hope that the proposed 
biometric obligations can be finalized by November 30 deadline, 
provide market certainty, and signals to investors that the 
United States intends to be a world leader in the development 
and production of these advanced fuels.
    With a wide-ranging body of research looking at every 
aspect of production and a range of stakeholders that have 
advocated for almost every different scenario available, we as 
lawmakers are left with difficult decisions to make. And I want 
to thank the witnesses again for providing expert testimony on 
this pressing topic.
    Mr. Chairman, I yield back.
    [The prepared statement of Mr. Beyer follows:]

            Prepared Statement of Subcommittee on Oversight
                   Minority Ranking Member Don Beyer

    Thank you Chairmen Bridenstine and Loudermilk for holding today's 
hearing and thank you to the witnesses for testifying.
    The greatest challenge of this generation--climate change--requires 
innovative solutions if we ever hope to make a meaningful difference. 
It requires us to look at every aspect of our energy production and 
consumption. We must find ways to end our dependence on fossil fuels 
and reduce our greenhouse gas emissions.
    The Renewable Fuel Standard has helped to push the technological 
limits and the capacity of industry to innovate our transportation 
fuels. In the past ten years we have seen increasing production of 
biofuels from both corn ethanol and advanced biofuels. This increase 
has come with considerable advancements in how corn ethanol is 
produced, improving production efficiencies while decreasing both costs 
and greenhouse gas emissions.
    The Renewable Fuel Standard was designed to integrate all biofuels 
into our fuel supply and lay the groundwork for the growth and 
development of advanced biofuels with at least a 50% reduction in 
greenhouse gas emissions compared to that of conventional gasoline. I 
am interested in hearing more about the advancements in this area and 
where we can expect biofuels to be in the next ten years.
    All of this does not go without saying that there have been 
challenges. The Environmental Protection Agency is prepared to finalize 
the volumetric requirements for 2014, 2015, and 2016 next month, after 
missing the statutory deadline two years in a row. While inundated with 
public comments during the proposal process, it does not excuse this 
lengthy delay. The agency has issued waivers for the required 
cellulosic biofuels and plans to do so again. I hope the proposed 
volumetric obligations can be finalized by the November 30th deadline 
to provide market certainty and signal to investors that the U.S. 
intends to be a world leader in the development and production of these 
advanced fuels.
    With a wide ranging body of research looking at every aspect of 
production and a range of stakeholders that have advocated for almost 
every different scenario available, we as lawmakers are left with 
difficult decisions to make. Thank you again to the witnesses for 
providing expert testimony on this pressing topic.
    Thank you Mr. Chairman.

    Chairman Bridenstine. Thank you, Mr. Beyer.
    Let me introduce our witnesses. Our first witness today is 
Dr. Terry Dinan, Senior Adviser at the Congressional Budget 
Office. Dr. Dinan received her bachelor's degree from John 
Carroll University and her Ph.D. in economics from Iowa State 
University.
    Our next witness is Mr. Ed Anderson, President and CEO of 
WEN-GAP, LLC. Mr. Anderson received his bachelor's degree from 
Guilford College and currently owns 11 Wendy's franchises.
    Our third witness today is Dr. John DeCicco, Research 
Professor at the University of Michigan Energy Institute. Dr. 
DeCicco received his bachelor's degree in mathematics from 
Catholic University, his master's degree in mechanical 
engineering from North Carolina State University, and his Ph.D. 
in mechanical engineering from Princeton University.
    Our fourth witness today is Mr. Brooke Coleman, Executive 
Director of the Advanced Biofuels Business Council. Mr. Coleman 
received his bachelor's degree from Wesleyan University and his 
law degree from Northeastern.
    Our final witness today is Mr. Charles Drevna, 
Distinguished Senior Fellow at the Institute for Energy 
Research. Mr. Drevna has over 40 years of extensive experience 
in legislative, regulatory, public policy, and marketplace 
issues involving energy and the environment. Prior to joining 
IER, he served as President of the American Fuel and 
Petrochemical Manufacturers. Mr. Drevna received his bachelor's 
degree in chemistry from Washington and Jefferson College.
    I now recognize Dr. Dinan for five minutes to present her 
testimony.

                 TESTIMONY OF DR. TERRY DINAN,

          SENIOR ADVISOR, CONGRESSIONAL BUDGET OFFICE

    Dr. Dinan. Good morning, Chairmen Bridenstine, Chairman 
Loudermilk, Ranking Member Bonamici, Ranking Member Beyer, and 
members of the committee. Thank you for the opportunity to 
testify about the Renewable Fuel Standard. This testimony 
updates a Congressional Budget Office's report on the RFS, 
which was published in June 2014.
    The RFS establishes minimum volumes of various types of 
renewable fuels that suppliers must blend into the U.S. 
transportation fuel supply. Those volumes, as defined by the 
Energy Independence and Security Act of 2007, or EISA, are 
intended to grow each year through 2022. To date, the 
requirements of the RFS have been met largely by blending 
gasoline with ethanol made from cornstarch. In the future, EISA 
requires use of increasingly large amounts of advanced 
biofuels, which include diesel made from biomass, ethanol made 
from sugarcane, and cellulosic biofuels.
    CBO concludes that the rising requirements of EISA would be 
very hard to meet in the future because of two main obstacles. 
First, making cellulosic biofuels is complex and costly. 
Second, the increasing requirement for the total gallons of 
renewable fuels would push the average concentration of ethanol 
and gasoline to well above ten percent, the maximum 
concentration that is feasible in order to avoid corrosion 
damage in older vehicles.
    Because of those challenges, EPA has been scaling back the 
requirements of EISA. That strategy decreases compliance costs 
in the short run, but it also reduces incentives for companies 
to invest in the production capacity for advanced biofuels and 
to expand the availability of high ethanol blends.
    CBO also examined how prices for food and fuel would vary 
in an illustrative year, 2017, based on three scenarios. The 
first, the 2016 volume scenario, is one in which the EPA would 
keep the RFS requirements for 2017 at the same amounts it has 
proposed for 2016. The second, the EISA volume scenario, is one 
in which fuel suppliers would have to meet the total 
requirements for renewable fuels and for advanced biofuels that 
are stated in EISA for 2017 but not the requirement for 
cellulosic biofuels. The final scenario was one in which 
lawmakers would immediately abolish the RFS.
    CBO found that food prices would be similar under the three 
scenarios. To the extent that the RFS increased the demand for 
corn ethanol, it would raise corn prices and put upward 
pressure on prices of foods made with corn.
    Under the EISA volume scenario, CBO estimated--sorry. Under 
the EISA volume scenario, CBO estimated that the resulting 
increase in the demand for corn would raise the average price 
of corn by about three percent relative to the 2016 volume 
scenario. However, because corn and food made with corn account 
for only a small fraction of total U.S. spending on food, that 
total spending would only increase by about 1/10 of 1 percent.
    The effect that repealing the RFS would have on the price 
of corn is limited because suppliers would probably find it 
cost-effective to use a roughly ten percent blend of corn 
ethanol in gasoline in 2017 even in the absence of the RFS. As 
a result, CBO estimates that, in comparison with the 2016 
volume scenario, repealing the RFS would cause food prices to 
fall by less than 1/10 of 1 percent.
    In contrast, CBO found that the prices of transportation 
fuels would vary significantly under the three scenarios. 
Compared with the 2016 volume scenario, we found that complying 
with the EISA volume scenario would increase the price of 
petroleum-based diesel by 25 cents to 45 cents per gallon. We 
also estimated that the price of E10, a blend of fuel that 
contains up to ten percent ethanol and which is currently the 
most commonly used transportation fuel in the United States, 
would rise by 15 cents to 30 cents.
    CBO found that complying with the EISA volume scenario 
would reduce the price of E85, a blend containing up to 85 
percent ethanol, by roughly 80 cents to $1.20.
    Finally, compared with the 2016 volume scenario, CBO 
estimates that repealing the RFS would have only small effects 
on fuel prices. Specifically, we estimate that repealing the 
RFS would have essentially no effect on the 2017 price of E10, 
would lower the price of petroleum-based diesel by roughly 5 
cents, and would increase the price of E85 by about 15 cents.
    Thank you again for this opportunity to testify, and I will 
be happy to answer any questions that you might have on CBO's 
analysis.
    [The prepared statement of Dr. Dinan follows:]
    
    
    
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    Chairman Bridenstine. Thank you, Dr. Dinan.
    I now recognize Mr. Anderson for five minutes to present 
his testimony.

                 TESTIMONY OF MR. ED ANDERSON,

               CEO AND PRESIDENT OF WEN-GAP, LLC

    Mr. Anderson. Good morning, Chairman Bridenstine, Chairman 
Loudermilk, Ranking Members Bonamici and Beyer, and members of 
the subcommittees.
    My name is Ed Anderson. My wife Judy and I, with our sons 
Eddie and Jeff, own a small Wendy's franchise with 11 
restaurants in Virginia. We have 385 employees. I am also on 
the board of Wendy's Quality Supply Chain Co-op, QSCC, a not-
for-profit purchasing co-op owned by Wendy's restaurant 
operators like me. QSCC purchases the food for Wendy's and is 
staffed by experts who understand and help us interpret 
commodity markets.
    The National Council of Chain Restaurants asked me to 
testify on behalf of the local small business chain restaurant 
community.
    In July 2013, I testified at a similar hearing on the RFS 
before the House Energy and Commerce Committee. Until then, I 
had never done anything like this and never imagined that I 
would. I run restaurants, but I have a responsibility to my 
family, employees, fellow franchisees, customers, and our 
industry to explain to policymakers that the well-intended RFS 
has turned out to be a very serious problem.
    Judy and I are the face of American small business men and 
women. We've worked for decades to build our business, but when 
Congress passed the Renewable Fuel Standard, it created a new 
burden for businesses like ours. Now restaurant owners and 
employers like us are being hurt at a time when our country 
can't afford it.
    The last time I was here I doubted many restaurant 
operators, let alone our customers, knew that a federal 
government mandate called the RFS is at the root of food cost 
increases. But more and more of us in the food business 
understand the RFS is a big mistake, and the average consumer 
is starting to catch on, too.
    There have been several studies of the RFS impact on food 
commodity volatility and costs. A study from 
PricewaterhouseCoopers in late 2012 found that the RFS is 
costing the chain restaurant segment of the restaurant 
industry, which is the segment I and thousands of small 
business franchisees are in, up to $3.2 billion in higher food 
commodity costs every year.
    My own analysis is that the RFS is costing my small company 
up to $34,000 more in higher food costs per restaurant each and 
every year. For our family, that's up to $374,000 a year in 
additional costs. That might not be a lot of money in 
Washington, D.C., but for me and many others in the restaurant 
business that's a lot of money.
    If Congress repealed the RFS, it would level the playing 
field and over time return normalcy to the commodities market 
so everyone competes fairly and food becomes more affordable. 
It's the RFS that distorts the market so much that restaurants, 
our suppliers, and consumers are forced to pay more than we 
would under normal market conditions.
    Please understand we're not anti-ethanol. We know if it 
wasn't for American farmers and ranchers, we wouldn't be here. 
We get all our beef and chicken from the United States and 
Canada. But this mandate is making food so expensive that it's 
harder to continue investing in new or remodeled restaurants, 
which would create badly needed construction and restaurant 
jobs.
    I believe with all my heart that we live in the greatest 
country in the world. It was built on the hard work and the 
ingenuity of those willing to risk it all to build something, 
creating jobs and opportunity for others along the way. 
Removing the mandate for ethanol allows that industry to stand 
on its own, like Judy and I do, like our sons who work for us 
do.
    Capitalism allows us all to adjust and be successful. Let 
the market, not a mandate, dictate the cost of corn. We can't 
pass these costs on to our customers. They're already 
struggling in this economy, and their own food costs at grocery 
stores have also gone up because of the RFS.
    We're appealing to Congress to provide relief from this 
policy which distorts food commodity markets and harms 
consumers and everyone in the food chain. Congress created the 
RFS, so it's up to Congress to repeal it.
    Thoughtful lawmakers in both the House and Senate 
introduced legislation to repeal or significantly reform the 
RFS. H.R. 703 and 704 would repeal the entire RFS or repeal the 
worst part of it, the corn ethanol mandate. Both bills enjoy 
growing bipartisan support.
    The RFS was a big mistake and it's broken beyond repair. We 
came here today to respectfully ask Congress to repeal it. Judy 
and I are here as small business owners, as employers, and as a 
family to bring attention to the real-life impact the RFS has 
had and to ask Congress to take action for all of us, because 
without your action, this situation will only get worse.
    Thank you.
    [The prepared statement of Mr. Anderson follows:]
    
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    Chairman Bridenstine. Thank you, Mr. Anderson.
    Dr. DeCicco, you are recognized for five minutes.

                 TESTIMONY OF DR. JOHN DECICCO,

                      RESEARCH PROFESSOR,

            UNIVERSITY OF MICHIGAN ENERGY INSTITUTE

    Dr. DeCicco. Thank you. And I wish to thank the Chairman--
--
    Chairman Bridenstine. Could you turn on your microphone?
    Dr. DeCicco. Yes. I wish to thank the Chairmen and Ranking 
Members, as well as other members of the subcommittee and full 
committee for inviting me to today's hearing.
    My name is John DeCicco, and I hold a doctorate in 
engineering from Princeton. Before joining the University of 
Michigan faculty in 2009, I worked professionally on energy 
issues since 1977, including 21 years at major environmental 
organizations. However, the findings I'm presenting today are 
my own professional views as an independent academic and do not 
reflect those of the University of Michigan, my past 
affiliations, or funders.
    My research shows that the Renewable Fuel Standard, or RFS, 
has been harmful to the environment from its inception. Now, 
ten years after the 2005 Energy Policy Act, the program has 
resulted in higher CO2 emissions than would have 
otherwise incurred. It also harms the environment in other 
ways. Sadly, the adverse impacts of the RFS have grown worse 
since it was expanded by the Energy Independence and Security 
Act of 2007.
    The notion that renewable fuels readily reduce CO2 
is based on a scientifically incorrect understanding of carbon 
neutrality. Only under certain conditions does substituting a 
biofuel for a fossil fuel neutralize the CO2 leaving 
a tailpipe. For that to occur, harvesting the feedstock must 
significantly increase how rapidly cropland absorbs CO2 
from the atmosphere on a net basis. That condition is not met 
for corn ethanol mandated by the RFS. It might be satisfied for 
cellulosic feedstocks, but once properly evaluated, the gains 
may not be as great as advocates assume.
    The lifecycle models used to calculate fuel carbon 
footprints, including EPA's RFS model and the DOE-sponsored 
GREET model, automatically credit all biofuels with complete 
carbon neutrality without checking whether that assumption is 
valid. My studies, which rely on crop data instead of computer 
modeling, find that the carbon neutrality condition is not 
being met.
    We evaluated corn ethanol for which lifecycle analysis 
claim to a 40 percent reduction in greenhouse gas emissions 
compared to gasoline. But examining data for the croplands 
actually supplying the facility finds no significant reduction 
in emissions. Under some circumstances, the emissions could be 
as much as 70 percent higher than those of gasoline. And these 
results do not even include the indirect land-use change, which 
would increase biofuel-related emissions even more.
    The key problem is that diverting harvest from existing 
productive land does not remove more carbon from the air than 
was already being removed during prior crop growth. All it does 
is it shuffle carbon around. In effect, it robs Peter to pay 
Paul.
    Our ongoing research involves a detailed carbon balance 
analysis of U.S. renewable fuel production since 2005. 
Preliminary results show that no significant direct CO2 
reduction can be claimed for the RFS. Once indirect land-use 
change is considered, the result is substantially higher 
CO2 emissions overall.
    Excess CO2 is not the only environmental harm 
caused by this policy. Fellow University of Michigan 
researchers have documented how ethanol production has 
destroyed habitat for waterfowl and other wildlife. Expanding 
corn ethanol production is worsening water pollution, 
contributing to algae blooms in the Gulf of Mexico and Lake 
Erie. And as for other air pollution, recent research found 
that the country's third-largest corn ethanol refinery emits 30 
times more air pollution than was assumed for the RFS 
regulatory analysis.
    Ethanol's corrosive properties are also incompatible with 
cars already on the road and degrade the operation of 
lawnmowers, motorboats, and other gasoline-powered equipment 
used by homeowners and businesses alike.
    In summary, a careful look at the data shows that the 
studies used to justify the RFS were flawed. Scientifically 
speaking, lifecycle analysis is an inappropriate method for 
specifying public policy. Inserting lifecycle requirements into 
the law has proven to be a mistake. Only a direct year-at-a-
time accounting provides a scientifically sound way to evaluate 
the CO2 impact of fuels. Once that is done, it is 
clear that the production and use of biofuels, as mandated by 
the RFS, has increased CO2 emissions to date.
    Thank you again for allowing me to share my findings, and 
I'll look forward to any questions you may have.
    [The prepared statement of Dr. DeCicco follows:]
    
    
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        Chairman Bridenstine. Thank you, Dr. DeCicco.
    Mr. Coleman, you're recognized for five minutes.

                TESTIMONY OF MR. BROOKE COLEMAN,

                      EXECUTIVE DIRECTOR,

               ADVANCED BIOFUELS BUSINESS COUNCIL

    Mr. Coleman. Thank you. Good morning, Chairman Bridenstine, 
Chairman Loudermilk, Ranking Members Bonamici and Beyer, and 
Members of the Subcommittee. My name is Brooke Coleman. I run 
something called the Advanced Biofuels Business Council.
    The council represents worldwide leaders in the efforts to 
develop and commercialize next-generation advanced and 
cellulosic biofuels ranging from cellulosic ethanol made from 
switchgrass, which is an agricultural waste, to advanced 
biofuels made from sustainable energy crops, municipal solid 
waste, and algae. We are honored to be here today to help 
accurately assess the impacts of the federal Renewable Fuel 
Standard.
    When I was thinking about my testimony today, it was quite 
clear that I would be giving a counter-perspective, and I want 
to give it. The RFS in my opinion is one of the most effective 
energy policies ever passed by Congress. Its notoriety stems 
not from its failures and unforeseen costs, as alleged, but 
instead its effectiveness in breaking the oil monopoly that 
leaves our economy and our environment at risk.
    So if we're going to assess the RFS from a ten-year 
perspective, let's look a little bit back at what we--where we 
were ten years ago. We were in the middle of an MTBE crisis 
where the oil industry used a gasoline additive to avoid 
ethanol that polluted drinking water. The political deal in 
essence that happened on RFS1 was a way to facilitate getting 
MTBE out of gasoline and out of our families' drinking water, 
and it happened in less than a year because Congress sent a 
clear market signal that ethanol, a homegrown American 
renewable product, would replace MTBE in the marketplace.
    A couple years later, Congress decided to pass a stronger 
RFS, and RFS2 passed in December 2007, built upon those 
successes and now supports more than 800,000 American jobs in 
29 States, producing homegrown renewable fuels as an 
alternative to foreign oil.
    This industry now displaces the foreign oil equivalent 
almost of Saudi Arabia and approximately Ecuador, and now we 
are innovating. I just returned from Nevada, Iowa, where DuPont 
just opened the largest cellulosic ethanol plant in the world. 
The plant will produce biofuel from corn silver, the unused 
part of the corn plant collected from local farms within 100 
miles of the facility.
    Quad County Syngenta was one of the first if not the first 
to produce commercial volumes of cellulosic biofuels. Their 
Cellerate technology produces cellulosic ethanol that is 129 
percent better than gasoline on carbon emissions, reduces 
energy inputs, and increases the quality and quantity of 
production co-products like corn oil and cattle feed.
    Abengoa and POET/DSM are deploying similar technologies 
using agricultural waste to make the lowest carbon, most 
innovative fuel in the world.
    One more example, a member of mine, Fulcrum BioEnergy, just 
signed a $60 million deal with United Airlines to make 
intermediate biocrude and bioJet.
    Unfortunately, the program's clear record of success is 
often lost in the cloud of misinformation kicked up by the oil 
industry and the so-called researchers, fellows, and experts 
funded by them. Just as the oil industry has been able to 
finance doubt about climate change, they are doing a heck of a 
job financing doubt about their primary competitor in biofuels.
    I want to touch on a couple of these examples, and I hope 
that we can touch on some of the reports and positions that we 
have mentioned during Q&A. The first is this notion that we are 
in a free market. It has been mentioned--it was mentioned by 
the Chairman; it was mentioned by multiple experts up here 
today. This is not a free market. The oil markets are 
controlled at the top by OPEC. They are controlled here in the 
United States by vertically integrated, highly consolidated oil 
companies.
    We need the RFS because we can't get shelf space. We have 
to sell to our primary competitors who want to see us fail in 
order to gain market access. The problem is we are experiencing 
what it is like to be in a market-controlled environment as we 
speak. We don't have low gasoline prices because we have 
efficiency, we don't have low gasoline prices because suddenly 
our economy is doing something different. We have low gasoline 
prices because OPEC made a decision one year ago to drive down 
the price of fuel to put the U.S. oil boom on its heels and to 
kill oil rig counts in this country.
    So OPEC is killing the very thing that the oil industry 
says we don't--is the reason we don't need the RFS anymore. In 
essence, the RFS is a hedge against this market power and 
allows our industry to grow and innovate over time with an 
expectation of market. If you give us a true free market, we 
will give you the RFS.
    Finally, with my last 25 seconds, I'd like to say one of 
the most incredible arguments made against us is the food price 
argument. I have compassion, of course, for franchise owners, 
but the problem is that corn prices today are lower than they 
were when President Bush signed this law in 2007. It is hard 
for me to believe that the RFS is increasing food costs when 
the primary reason that the restaurants claim while they pull 
in record profits over the last ten years, this year, is that 
corn prices are increasing when they're actually decreasing.
    So one of the things I would like to do and have the 
opportunity to do as we move forward in Q&A is discuss some of 
these issues, and I look forward to that very much. But I'm 
confident that the facts will prevail on the RFS discussion, 
and I appreciate the opportunity to speak today.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Coleman follows:]
    
    
    
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    Chairman Bridenstine. Thank you, Mr. Coleman.
    Mr. Drevna, you're recognized for five minutes.

                TESTIMONY OF MR. CHARLES DREVNA,

                  DISTINGUISHED SENIOR FELLOW,

                 INSTITUTE FOR ENERGY RESEARCH

    Mr. Drevna. Chairmen Bridenstine and Loudermilk, Ranking 
Members Bonamici and Beyer, I am Charlie Drevna, Senior Fellow 
at the Institute for Energy Research.
    You know, once Milton Friedman famously posited that one of 
the great mistakes is to judge policies and programs by their 
intentions rather than their results. If he were alive today, 
Friedman would point to the RFS as a prime example of his 
belief.
    In the mid-2000s and even before, so-called industry 
analysts and renowned economists predicted ever-increasing 
gasoline demand as they simultaneously declared the United 
States to be energy-scarce. The Nation was on a path according 
to the self-anointed experts to reliance on ever-increasing 
foreign sources of energy, much of which came from potentially 
unstable regions of the world.
    Congress and the Administration accepted the reviews, and 
in 2005 adopted the Energy Policy Act, which required refiners 
to blend 7.5 billion gallons of ethanol into the gasoline pool 
by 2012. In less than two years, this nuisance of free market 
interference became a full-blown anti-consumer, anti-free 
market debacle as EISA '07 mandated 36 billion gallons of 
renewable fuels, some of which actually existed, be blended 
into domestic transportation fuels by 2022.
    In essence, the predictions of 2007 and earlier are the 
polar opposite of the realities of 2015. Confounding the 
problem is the undeniable fact that advanced biofuels 
production, the anticipated linchpin of the RFS, has fallen 
woefully short of the numerous promises made since 2007.
    I'm sure the Committee is familiar with such names as Range 
Fuels, KiOR, Blue Sugars, Absolute Fuels, New Energy Fuels, 
Green Diesel, and a host of others, most of whom have 
squandered taxpayer dollars or committed fraud, or both, and 
yet today we continue to hear that the economic production of 
cellulosic fuels is ``right around the corner.'' It's a big 
corner.
    What's clear is that neither Congress nor EPA can mandate 
innovation or favorable economics, try as they may. The hard 
sciences of chemistry and physics remain immune to political 
science, and they remain formidable obstacles to economic 
production of commercial-scale cellulosic fuels. However, one 
should not discount the innovation provided by EPA to assist in 
this effort. EPA stipulates that ethanol produced from 
sugarcane qualifies in advanced biofuel. That's helping to meet 
the statutory volume requirements. What's ironic about this 
news is that ethanol produced from sugarcane is imported mostly 
from Brazil. So much for that homegrown stuff. And the intent--
and what was the intent of the RFS to limit imported fuels? 
Okay.
    So what State virtually imports all of this biofuel? Well, 
that would be California. And why California? The State's low 
carbon fuel standard requires refiners to use millions of 
gallons of advanced biofuel, and imported sugarcane is the only 
available product that fits that definition, as unscientific as 
that definition is. Yes, that's correct. California prohibits 
ethanol from U.S. producers and imports it from Brazil. This 
allows California legislators and regulators to promote 
themselves as pioneers in the green movement.
    So what happens to the ethanol from the U.S. producers that 
would've otherwise gone and been delivered to California? The 
Brazilians don't care if their ethanol comes from sugar or 
corn, so California and Brazil swap their ethanol, literally 
two ships passing in the night. The net outcome, higher 
shipping costs, and ironically, increases in GHG emissions.
    Not satisfied with the overall results, EPA then decided to 
enhance the total production of cellulosic fuels not via 
scientific breakthrough. Rather, it would be much simpler to 
change the definition of cellulosic fuels to include a portion 
of biogas produced from landfills. If you look at the volume 
increases in cellulosic production 2014 through '15, it's 
nearly all attributable to EPA semantics. Why let pesky little 
details such as chemical structure and definition get in the 
way of a predetermined outcome?
    If one were to be intellectually honest, the RFS was never 
about energy security, the environment, or national security. 
It's been accurately described as crony capitalism, although 
the use of the term capitalism in reference to the RFS is a 
basic non sequitur. It may be much more accurate to label the 
RFS and other anti-free market mandates, subsidies, and 
giveaways for what they really are: government attempting to 
pick the winners and losers in the marketplace. And the 
government's track record is most illustrative as its penchant 
for picking losers is quite outstanding.
    Even if the intentions of the RFS were noble, the program 
must be judged on its results. It's past time for Congress to 
admit that the RFS has not delivered and will not deliver 
anticipated results. The law should be repealed and allow for 
American ingenuity, entrepreneurship, and free-market 
enterprise to do what it does best. They haven't failed the 
nation yet.
    Thank you very much.
    
    
    
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    [The prepared statement of Mr. Drevna follows:]
       
    Chairman Bridenstine. Thank you, Mr. Drevna.
    I now recognize myself for five minutes of questions.
    I just wanted to go back for a second to Dr. DeCicco, 
looking at your bio, Research Professor at the University of 
Michigan Energy Institute, bachelor's degree in mathematics 
from Catholic University, master's degree in mechanical 
engineering from North Carolina State University, Ph.D. in 
mechanical engineering from Princeton University. You've been 
involved in research on energy and environment issues for a 
long time. Correct me if I'm wrong. You worked for the 
Environmental Defense Fund. Is that correct?
    Dr. DeCicco. That's right, for nine years.
    Chairman Bridenstine. Would you be characterized as a 
conservative witness in general? Would you characterize 
yourself as that or somebody that's a hack for the oil industry 
or anything like that?
    Dr. DeCicco. I certainly would not so----
    Chairman Bridenstine. Reading your bio and looking at your 
background, I think that is fairly safe to assume. In fact, 
when I read your bio, I was a little bit interested in why 
Republicans were bringing you to testify. But hearing your 
testimony, being somebody who's very concerned about the 
environment, somebody who's very concerned about carbon 
emissions, your testimony today--I heard you say 70 percent 
higher carbon emissions in some circumstances because of the 
Renewable Fuel Standard. Is that correct?
    Dr. DeCicco. That's correct, Mr. Chairman.
    Chairman Bridenstine. How do you get to 70 percent higher 
with the Renewable Fuel Standard? Can you share with us how 
that happens?
    Dr. DeCicco. Sure. The thing to keep in mind is that all of 
the claims for reduction on biofuels depend on this carbon-
neutrality assumption. When that's not met, you start with 
essentially a wash when you're comparing, say, ethanol to 
gasoline or biodiesel to petroleum diesel. And then you have to 
look at the process emissions from that basis. And it's not 
nearly as efficient to process corn ethanol from biomass as it 
is to process gasoline from petroleum.
    In fact, from a carbon-efficiency point of view, basic 
chemistry tells us that when you ferment the fuel--and this 
goes for any fermentation based ethanol, whether it comes from 
a cellulosic feedstock or starch like corn or sugarcane--for 
every molecule of ethanol that you produce, 1 molecule of 
CO2 gets produced as beer bubbles. You know, when 
you ferment, you have a frothy thing. It creates 
CO2.
    So if you can no longer assume that that's free 
CO2, free carbon enough fuel, which is false by my 
analysis of cropland data, then right there you lose a lot of 
carbon back to the atmosphere during processing. So when you 
add that back in, when you add in the emissions to make 
fertilizer, when you add in the emissions to run the bio 
refineries even for natural gas in a dry mill, which is a 
pretty efficient form of biorefinery, and take away this 
automatic credit that the lifecycle models assume, you can end 
up with 70 percent higher emissions.
    And that's not the end of the story. I mean that's not the 
upper limit on the damage when you begin to look at the ripple 
effects.
    Chairman Bridenstine. So in your testimony I have heard you 
mentioned harmful to the environment. I just heard you use the 
word damage to the environment, higher CO2 
emissions, in some cases 70 percent higher. You mentioned water 
pollution, you mentioned algae bloom. Did you mention--I think 
yesterday when I talked to you, you mentioned deforestation. 
Can you talk to that for a second?
    Dr. DeCicco. Sure. When you divert crops from the food and 
feed market, and what's going on in the country now, around 40 
percent of our corn harvest is going into ethanol production. 
Now, some of that comes back as co-product, but it nets out to 
about 30 percent. Well, does that mean people are eating 30 
percent less food or that we're having 30 percent less cattle? 
No.
    We have a global commodity market, and what happens is that 
when grains are diverted into the fuel market, that grain that 
would otherwise be used for food has to get made up somewhere 
else. And if you trace that, as a number of scientific analyses 
have done in the past several years, and look at the ripple 
effect, the loss of grain from American field due to the 
biofuel mandate results, for example, in additional 
deforestation in Brazil and sub-Saharan Africa as the food 
markets try to compensate and have to put more land into 
production.
    This is a highly uncertain effect, but there's no doubt 
because of the coupling of global commodity markets that this 
effect, which is known as indirect land-use change, is 
occurring.
    Chairman Bridenstine. Thank you, Dr. DeCicco. I am out of 
time, but it is important to note that if it's damaging to the 
environment, if it's putting more CO2 emissions into 
the atmosphere, if it's adding to prices for both food and 
fuel, it leaves us wondering what are the reasons that we still 
have the Renewable Fuel Standard.
    I'd like to recognize the Ranking Member, Ms. Bonamici, for 
five minutes.
    Ms. Bonamici. Thank you very much, Mr. Chairman, and what 
an interesting discussion this morning. I really appreciate the 
conversation.
    Mr. Coleman, in his testimony, Dr. DeCicco states that the 
RFS has been harmful to the environment--I'm following up on 
the Chairman's question--and that only under limited conditions 
does substituting a biofuel for a fossil fuel neutralize 
tailpipe CO2 emissions.
    Now, it's my understanding that a number of analyses, 
including from the U.S. Department of Energy, indicate that 
most biofuels do reduce greenhouse gas emissions. We're getting 
ready for the Climate Change Conference in Paris and we need to 
do more, not less, to mitigate climate change.
    So scientists at the Argonne National Laboratory, Purdue 
University, and the Federal Aviation Administration have 
responded to some of the criticisms Dr. DeCicco has raised in 
writing regarding the ability of biofuels to reduce greenhouse 
gas emissions. And, Mr. Chairman, I would like to enter this 
paper into the record.
    Chairman Bridenstine. Without objection, so ordered.
    [The information appears in Appendix II]
    Ms. Bonamici. Thank you.
    Mr. Coleman, one of the conclusions reached in this paper 
is that Dr. DeCicco does not take into account the carbon 
emissions that are avoided when a biofuel displaces the use of 
fossil fuels. This displacement seems fairly important. So can 
you please respond to the assertion that the RFS does not 
reduce carbon emissions and that it's broadly caused more harm 
than good for the environment, particularly focusing on the 
need to consider displacement of fossil fuels? And I do want to 
save time for another question.
    Mr. Coleman. Sure. I'll go quickly. So we obviously don't 
agree with Dr. DeCicco, but I think it's important to 
understand who doesn't agree with him is EPA, the Department of 
Energy, U.S. Department of Agriculture, the national labs and 
Oak Ridge and Argonne National Laboratory, the California Air 
Resources Board, which is hardly pro-bio fuels.
    What Dr. DeCicco does is he actually does something that's 
quite provocative in the carbon accounting world, so it may be 
different and might get your attention but it's not well 
supported. And it's called additionality. So he doesn't 
really--when you grow a plant, whether it's corn or switchgrass 
or whatever, it absorbs sunlight and CO2 while it's 
growing, and that's one of the benefits of using bioenergy. 
Instead of having a solar panel to absorb the sunlight, you're 
transferring it into gasoline.
    He wants to take that credit away under the assumption that 
the farmer would have done it anyway. And the problem with 
doing that is it removes the whole notion of supply chain 
emissions, and you can't account for it. So if you have a 
State--or you want to put solar panels on your roof and you 
have the government saying, oh, well, sorry, Ms. Bonamici, you 
would have done that anyway so we're not going to give you 
credit to do that, it's suspends reality with regard to carbon 
accounting. And that's why responsible regulatory agencies 
don't do it that way. It's an interesting academic exercise.
    So I think we have to rely on the body of the evidence to 
support what's going on in this space, and biofuels are carbon 
reductive.
    Ms. Bonamici. Thank you. And then I have a two-part 
question. There's been some criticism of the EPA on its 
implementation of the RFS. Some of it is certainly well placed. 
The EPA has delayed the release of the volumetric obligations 
for the past couple of years, and I want to note that the 
proposed biometric obligations to be finalized this month were 
actually proposed in part in 2013. The Agency received more 
than 340,000 comments on the proposed rule that year, and 
evaluation of the comments led to a delay. It's unfortunate, 
but I still don't think it's acceptable that the program has 
experienced such delays.
    And I want you to discuss how that has affected the 
biofuels industry. Do you agree that the consecutive delays 
have hurt investments in the industry and innovative technology 
and development?
    And then I also want you to talk about--we've had a lot of 
conversations here about corn, but obviously, based on the work 
that your organization does, there's so much potential out 
there in this second generation. So if the RFS is repealed, as 
some are suggesting, what would that do to the advancement of 
all the alternative second-generation biofuels and particularly 
all the small businesses and businesses across the country that 
are working to innovate and come up with new alternatives?
    Mr. Coleman. Well, I appreciate the question. I spoke to 
this a little bit when I talked about the market. So we need 
policy because the market isn't free. And so when the policy is 
suspended or not enacted, we're in a tough situation because we 
don't know if the oil companies are going to buy our product. 
And if we don't know if the oil companies are going to buy our 
product, it's pretty hard to get financing to build those 
projects.
    And so what happened in 2013 and what has happened for two 
years is a failure to finalize the rule has basically suspended 
investment in advanced biofuels. And we are confident that we 
can get back on track. The courts have actually required EPA to 
get the final rule out by November 30 of this year. The key, 
however, will be that EPA gets a good rule out and not just a 
timely rule out.
    And so while we expect the timeliness problem to be fixed, 
EPA is also still proposing to have a waiver, a new waiver in 
there that would allow the program to be waived if the oil 
companies fail to distribute our fuel. And the whole purpose of 
the RFS is to force the oil companies to do it because they 
would not otherwise do it based on price because of the 
subsidies and the protections they have overseas that protect 
this industry.
    And so if the RFS, to speak to your last question, were 
repealed, we would basically lose our place on the shelf if you 
will and would not have access to the consumer that would allow 
these financing mechanisms to go, and we would lose these 
projects overseas. DuPont, Enerchem, Abengoa, some of the 
companies that I mentioned, have all built their second plant 
overseas in places like China, Brazil, and France over the last 
six months. So we've already lost second plants. I think the 
goal now is to get the third, fourth, fifth plants back in the 
United States.
    Ms. Bonamici. Thank you. And my time is expired. I yield 
back. Thank you, Mr. Chairman.
    Chairman Bridenstine. I'd like to thank the Ranking Member.
    And Chairman Loudermilk is recognized for five minutes.
    Mr. Loudermilk. Thank you, Mr. Chairman.
    Real quickly, Mr. Coleman, what your profession? What's 
your education and your profession?
    Mr. Coleman. I'm educated at Wesleyan University. I was 
educated in Northeastern School of Law. I run the Advanced 
Biofuels Business Council and represent the lowest carbon fuel 
companies in the world.
    Mr. Loudermilk. Okay. And so you're an attorney?
    Mr. Coleman. Yes.
    Mr. Loudermilk. Is that--okay. And you work for--can you--
--
    Mr. Coleman. Advanced Biofuels Business Council.
    Mr. Loudermilk. Okay, the business council?
    Mr. Coleman. Yes.
    Mr. Loudermilk. Okay. Thank you.
    Dr. DeCicco, your profession?
    Dr. DeCicco. I'm a mechanical engineer.
    Mr. Loudermilk. You're a mechanical engineer. And who do 
you work for?
    Dr. DeCicco. I work for the University of Michigan at the 
Energy Institute.
    Mr. Loudermilk. Before I go into questions, is there 
anything you would like to respond to to the claims that Mr. 
Coleman has said?
    Dr. DeCicco. Sure. Thanks for the opportunity.
    You know, there's--science is never static. It moves. We 
learn things as time goes on. I hate to admit this, but in the 
mid-1990s I was the author of the first paper, first academic 
paper to call for the use of lifecycle analysis and regulation 
as an incentive to produce advanced biofuels, cellulosic fuels 
in particular. And it was based on the early studies that are 
the precursors and set the template for all the government 
models now in use.
    I didn't know then what I have since learned about the 
realities of the carbon cycle, and what I realized several 
years ago as I began picking apart the models and trying to 
understand, okay, why is there so much controversy here that 
never seems to get resolved? It's that the government models, 
the GREET model, which has been the basis for so many of these 
claims, effectively violate the law of conservation of mass. 
They effectively, in the computer, create carbon for the sake 
of offsetting the carbon out of the tailpipe without bothering 
to check whether additional carbon has been removed from the 
atmosphere.
    Now, Mr. Coleman says, well, I'm raising some unproven 
theory about additionality. Additionality, you know, the need 
for additional carbon is just another word for conservation of 
mass. There's no such thing as free carbon. Carbon is the fuel 
of life. You know, we have to be careful when we say willy-
nilly we need to de-carbonize the economy. I personally don't 
want to be de-carbonized, and I don't think any of us do. Our 
whole food chain and the whole carbon cycle by which plants at 
the base of the food chain take carbon from the air and utilize 
it to feed everything else is what's going on here. And if you 
take that, that's what I meant by you can't rob Peter to pay 
Paul. If you just take that carbon, it has to be made up 
somewhere else.
    So I am in a situation of someone kind of saying, well, the 
emperor has no clothes because the emperor in this case is the 
Department of Energy and its models that became the template 
for the RFS, and EPA's models, which did its own modeling using 
a similar format, the same with the California Air Resources 
Board. And here I am coming along and saying, oops, you guys 
got it wrong. Your models violate conservation of mass. You 
haven't checked whether that carbon that you're crediting 
automatically against the tailpipe was actually additional 
carbon in the sense that it came out of the air without 
stealing from the food or feed system.
    So I certainly realize that my criticism of these biofuel 
policies does fly in the face of piles of publications, but 
unfortunately, those publications got it wrong.
    Mr. Loudermilk. One quick question, I'm trying to get my 
hands around this carbon neutrality theory. And in layman's 
terms, the idea the model was based on is we're going to grow 
more corn plants, plants absorb carbon output, so therefore, 
the increased output by burning ethanol or producing ethanol 
would be absorbed by the increased production of corn plants. 
Is that a fair summary of the idea----
    Dr. DeCicco. Oh----
    Mr. Loudermilk. --and have we--are we growing more plants 
to absorb?
    Dr. DeCicco. We are growing a bit more. The keyword that 
you said here is more. You know, in other words, if we had a 
barren piece of desert and then irrigated it, fertilized it, 
grew corn on it, then that piece of desert would be growing 
more corn in a way that takes more carbon out of the air than 
was previously being taken out. And then you could legitimately 
claim that that carbon in that corn feedstock offsets the 
emissions when the ethanol is burned. But I'm not aware that 
we're getting most of our corn from land that used to be barren 
deserts.
    Mr. Loudermilk. So it was used for other purposes? Okay.
    Dr. DeCicco. That's right.
    Mr. Loudermilk. I see I'm out of time, Mr. Chairman. I 
think the world is turned upside down when we have the business 
community advocating for more government regulation and the 
environmental community advocating for not. So this is very 
interesting. Thank you, Mr. Chairman.
    Chairman Bridenstine. And real quick, just a point of 
privilege here if you'll allow me, Mr. Beyer.
    The question I guess we're--I'm trying to understand is if 
you're replacing other crops with corn, then the carbon 
accounting that Dr. DeCicco is talking about would actually be 
more accurate than if you don't account for that, correct, Mr. 
Coleman?
    Mr. Coleman. No. So this is--I mean the way carbon 
accounting works and the way the Clean Air Act works or the way 
that any regulation works is pollute or pay. You're accountable 
for what you do, right? And if you grow a plant to use in 
bioenergy that absorbs carbon more or less, a little bit, not 
very much, you get credit for doing that. Whether----
    Chairman Bridenstine. But if you're producing that plant, 
which in this case would be corn, and you're replacing another 
plant, then you really haven't done anything to change the 
accounting of the carbon removal. Am I incorrect on that?
    Mr. Coleman. You are incorrect because the way that--the 
way agricultural markets work is you have demand--put it this 
way, agriculture they produce for price, okay? They don't say 
I'm going to grow this--I'm going to grow this corn for 
ethanol. They produce for price. And so you have--when you have 
regulations that are changing the behavior amongst farmers, you 
have--what you want in that industry is accountability for what 
you do, right? And so if you have acres where you want to do 
more corn this year and more wheat next year and your--that 
corn gets used for a certain product, that's the product you 
should be accountable for. That is it.
    Chairman Bridenstine. Okay. I'm taking time that I don't 
have. So, Mr. Beyer, you are recognized as the Ranking Member 
for five minutes.
    Mr. Beyer. Thank you, Mr. Chairman.
    Mr. Anderson, thank you for coming up to talk to us. And 
I'm sure I've eaten at many of your Wendy's over the years.
    Dr. Dinan talked about with the existing fuel standard that 
corn price or overall food prices will only rise about 1/10 of 
one percent, and if repealed would fall less than 1/10 of one 
percent. With some excellent research we found that the price 
of corn per bushel was $3.77 when President Bush signed the law 
in December of '07. It's $3.68 per bushel right now, 9 cents 
cheaper. So how do you get $34,000 in increased food prices 
directly related to RFS in your stores?
    Mr. Anderson. PricewaterhouseCoopers did the study in 2012, 
and then based on that process determined that the impact was 
the $34,000.
    Mr. Beyer. But if you look at the USDA, you also see that 
the price is up to $6.60 or something in 2012 when they did 
that study. So now we're back to $3.68, so my guess is if PwC 
did the study again, you'd find literally no impact on your 
business.
    Mr. Anderson. Literally no impact would be incorrect. Our 
prices are still up, and I would say also that we had two 
record corn crops, and this year we're going to be followed by 
an almost record corn crop. I think it's highly unlikely that 
we will continue to have record corn crops to keep the price of 
corn at that.
    Mr. Beyer. And, Mr. Anderson, not to disagree with you at 
all, it may well be true, but I think we need to isolate 
increase in your food costs from the price of corn. They may 
not be 1 to 1.
    Mr. Anderson. I would respectfully disagree with that.
    Mr. Beyer. Mr. Coleman, what about Brazil? Mr. Drevna 
talked all about shipping ethanol from California there and 
bringing sugarcane back.
    Mr. Coleman. Yes, so there--he--Mr. Drevna is talking about 
a different program when he talks about the low carbon fuel 
standard in California. That program drives the lowest carbon 
fuel. It does not have respect for State or country borders, 
and if you have a low carbon fuel, California was to show that 
there's a market for it. So Brazil is shipping sugar ethanol to 
the marketplace.
    In terms of the RFS, again, so Brazilian ethanol does hit 
the advanced biofuel requirement. Ninety plus percent of the 
fuel used under this program, however, has been U.S.-produced. 
So the point of the RFS is to drive plant production and new 
industries in this country. We have 210 ethanol plants alone. 
We have another 60,000 jobs and hundreds of biodiesel plants in 
this country alone, and now we're getting that first wave of 
cellulosic plants that creates value-added agriculture. And so 
we're really seeing tremendous benefit inside the United 
States.
    Mr. Beyer. Great. Thank you.
    Dr. DeCicco, I want to give you one more chance to try to 
out me explain this carbon neutrality. When we look at fossil 
fuels, that was carbon taken out of the air millions and 
millions of years ago and now burned. So we're taking carbon 
that's been stored for these millions of years and putting it 
back into the atmosphere, putting it into the ocean.
    When you talk to cellulosics, you're taking carbon that was 
taken out of the atmosphere last year or this year and putting 
it back in. Why isn't that just on the surface of it--by the 
way, if I recall my physics, the first law of thermodynamics is 
the conservation of mass and energy there--because they're 
interchangeable, E equals MC squared. So if we're taking carbon 
out of the atmosphere now to burn to put back in, why is that 
just on the surface of it not much less net carbon, then 
burning something that was taken out millions of years ago?
    Dr. DeCicco. Well, the thing to keep in mind is to 
neutralize those emissions the way you're saying is that you 
need to come up with more carbon that was already being taken 
out of the air. Now, that can happen. So let me turn to an 
example. I think, you know, this DuPont--new DuPont facility 
that was--
    Mr. Beyer. Can I interrupt for one second?
    Dr. DeCicco. Yes.
    Mr. Beyer. Why more carbon if you just take the same carbon 
that was coming out anyway, so get rid of this alternative land 
use----
    Dr. DeCicco. Sure.
    Mr. Beyer. --theory. It was going to come out in soy crops 
or forest or whatever, no--leave the desert. You're still not--
you're still adding--putting carbon back into the atmosphere 
that was coming out naturally rather than carbon that's been 
stored.
    Dr. DeCicco. Well, that's the rub here. In other words, if 
you have corn that already removed carbon from the atmosphere, 
it's quite true that that corn was already, you know, being 
digested and, you know, calories burned results in CO2 
being exhaled. If you take it and use it for fuel, that carbon 
still comes out of the air in the tailpipe. So the question 
then becomes, as I said before, does that mean that that 
calorie consumption, the corn that was being consumed by people 
and livestock, has disappeared? And the answer is no, it's 
certainly not disappeared.
    And this is again why it is, you know, the conservation of 
mass. And yes, mass and energy were--we are fortunately dealing 
with non-relativistic velocities in the commodity markets, that 
you can't just assume that because the carbon was recently 
grown that it's sufficient to balance out the system, which is 
using huge volumes of carbon already for food and feed. And 
that's the--you know, the essence of how I, you know, have 
essentially picked apart and found the flaws in the lifecycle 
models.
    Mr. Beyer. Thank you, Mr. Chairman. I yield back.
    Chairman Bridenstine. I'd like to thank the Ranking Member.
    I recognize Mr. Weber from Texas for five minutes.
    Mr. Weber. Thank you, Mr. Chairman.
    And Dr.--is it Dinan?
    Dr. Dinan. It's Dinan.
    Mr. Weber. Dinan. They've been ignoring you, and so I just 
wanted to come to you. I'm going to have a question for all 
five of you, and it's a simple yes or no. And I don't want you 
to give away the answer. Just do you know the answer? MTBE, do 
you know what that is?
    Dr. Dinan. Yes.
    Mr. Weber. Mr. Anderson, since you run some Wendy's 
franchises, you may or may not know what that is.
    Mr. Anderson. No, sir.
    Mr. Weber. Okay. And is it Dr. DeCicco?
    Dr. DeCicco. [Nonverbal response.]
    Mr. Weber. Okay.
    Dr. DeCicco. Yes, I know what MTBE is.
    Mr. Weber. All right. Mr. Coleman?
    Mr. Coleman. Yes. I think I mentioned it. Yes, I know.
    Mr. Weber. Okay. Dr. Drevna?
    Mr. Drevna. Absolutely.
    Mr. Weber. Okay. So this is a push to do away with MTBE, 
a.k.a. methyl tertiary butyl ether, as I understand it, 
ostensibly because MTBE was found in groundwater, is that 
right, any of y'all? Dr. Drevna?
    Mr. Drevna. MTBE was found in groundwater because we had a 
leaking underground storage tank debacle in the country, and 
EPA passed a bill--I mean passed a regulation that gave 
underground storage tanks ten years to comply but then the RFG2 
came into play and we had to put more oxygenate into the 
gasoline.
    Mr. Weber. Okay. Do we know what affect ethanol has in the 
groundwater?
    Mr. Drevna. If you have a leaking underground storage tank, 
by what I've seen in the studies would indicate that the 
ethanol will separate out first from the water and then it--
as--whereas the bacteria would go after the BTEX compounds--
benzene, toluene, xylene--in the underground water and the MTBE 
would traverse further, the bacteria likes their cocktails 
before dinner so they have the--they go for the ethanol first. 
But in essence, you know, I think we've fixed the underground 
storage tank problem in the country, which was the root of the 
problem.
    Mr. Weber. So according to Wikipedia--standby, Mr. Coleman, 
I'll come to you----
    Mr. Coleman. Okay.
    Mr. Weber. --MTBE was not very soluble in water.
    Mr. Drevna. Okay, it was very soluble in water.
    Mr. Weber. It's very soluble in water?
    Mr. Drevna. Yes. Yes.
    Mr. Weber. Okay.
    Mr. Drevna. So is ethanol.
    Mr. Weber. And so ethanol is but you said it separates out 
quicker.
    Mr. Drevna. No, what happens--ethanol has an affinity for 
water.
    Mr. Weber. Okay.
    Mr. Drevna. That's why when one of the previous witnesses 
talked or maybe Mr. Chairman talked about the outdoor power 
equipment and the marine people. The marine folks don't like a 
lot of ethanol, if it all----
    Mr. Weber. So----
    Mr. Drevna. --in--to use in marine equipment because the 
ethanol will separate out and marine----
    Mr. Weber. That's because it's corrosive to the inside of a 
steel engine, is that correct?
    Mr. Drevna. Well, you know, it's corrosive to certain pumps 
and flanges and hoses and things----
    Mr. Weber. Okay.
    Mr. Drevna. --but, you know, again, the reason for the 
marine folks who don't want it is because ethanol has an 
affinity for water.
    Mr. Weber. Okay. Mr. Coleman, you wanted to weigh in.
    Mr. Coleman. Yeah, just a quick thought. When ethanol--when 
MTBE went in gasoline, we had a massive drinking water problem 
because MTBE was highly soluble in water, and it actually 
extended the plume into drinking water aquifers. When we 
replace MTBE with ethanol, we no longer had that problem, and--
--
    Mr. Weber. Okay.
    Mr. Coleman. --and Mr. Drevna's view is that all of a 
sudden the underground storage tanks are fixed, our view is 
that it's a better biodegradable product.
    Mr. Weber. Okay.
    Mr. Coleman. And then I'll yield on the second part.
    Mr. Weber. Mr. Drevna, you had another--or Dr.----
    Mr. Drevna. Yes, I have a comment on that, and--some of the 
things that my colleague here Mr. Coleman has been talking 
about, a free market, MTBE, the RFG2 was a free market. The 
ethanol folks clamored because the consumer didn't want 
ethanol. The consumer still doesn't want it in massive 
quantities.
    Mr. Weber. Well, we've had another--in the committee that I 
chair, the Energy Subcommittee, we've had a group of--a gas 
station owned by farmers in Ohio area, I think, or maybe it was 
Iowa--I'd have to go back and look--who actually couldn't sell 
enough of this stuff in the very heart of corn country. So from 
an economic standpoint, it just wasn't really flying.
    Mr. Coleman. Mr. Weber, could I just add one quick comment 
DD
    Mr. Weber. Sure.
    Mr. Coleman. --if he is attacking our industry? So I know 
DD
    Mr. Weber. Well, if we have a difference of opinion, that's 
not an attack, right?
    Mr. Coleman. No, no, no. Yes, yes, yes. But----
    Mr. Weber. Okay.
    Mr. Coleman. --the record is open for two weeks. We would 
be happy to provide further information about this.
    Mr. Weber. So you'd be happy to counterattack?
    Mr. Coleman. Perhaps counter-argue.
    Mr. Weber. Okay. All right. Well, I'm going to leave it at 
that. Mr. Chairman, I'm going to yield back.
    Chairman Bridenstine. Thank you. I guess we are out of 
witnesses on that end, so we'll go with Mr. Babin also from 
Texas.
    Mr. Babin. Yes, sir. Thank you, Mr. Chairman, and thank 
you, witnesses, for being here.
    I--maybe I missed this a while ago but, Dr. DeCicco, can 
you tell me a little more about why corn ethanol is worse for 
air quality the gasoline? That may have already been asked and 
hashed but----
    Dr. DeCicco. Sure. I would be happy to explain that. In 
particular, the part of air quality that I'm focusing on is the 
CO2 emissions because that's the emissions that the 
ethanol proponents claim that would be reduced by the use of 
ethanol.
    When it comes right down to it, it's a matter of chemistry 
for the fuel. Carbon, as I said, is the fuel of life and it 
provides energy both to people through calories and we can also 
use carbon-based fuels to provide energy for cars and trucks 
and airplanes. And it's a great energy carrier. So ethanol is a 
carbon-based fuel, and that is somewhat compatible with 
gasoline although, as we've heard, there's limits and problems 
associated with putting too much of it into the gasoline.
    But when you burn ethanol, the combustion still creates a 
CO2 coming out of the tailpipe, same for biodiesel. 
And so a short way of thinking about it is that if biofuels 
were to have a benefit for CO2, it's not when 
they're burned. I mean when you burn it, you have to burn that 
carbon, CO2 comes out of the tailpipe.
    So then you have to ask, okay, well, if the reduction of 
CO2 does not occur at the tailpipe, where might it 
occur? And this is where you have to go back and say, well, did 
we remove more CO2 when we harvested the feedstock 
than the plants were already absorbing from the air? And if you 
haven't done that--and the vast majority of biofuel that we 
grow--we are growing it on existing cropland, sourcing the corn 
and soybeans from existing cropland--you've not removed more 
CO2 from the air.
    Now, yields have gone up a little bit. My analysis accounts 
for that. But that's just a small increase in the removal. But 
the bottom line is, because there's no benefit to the 
atmosphere when the biofuel is burned, unless you pull more 
CO2 out of the air, which you might do by harvesting 
stover, corn stover, residues, so there's a potential there to 
get a benefit that way, but unless you do something like that, 
if all you do is divert existing crop production into the fuel 
market, then right off the bat there's no benefit. And as I 
said before, then you have to add in all those excess emissions 
associated with processing the fuel, and the picture starts to 
look very bad very soon.
    Mr. Babin. Okay. Thank you.
    And should corn ethanol be classified as a green fuel then, 
given this environmental impact?
    Dr. DeCicco. Absolutely not.
    Mr. Babin. Yes. Okay. And now the Administration has 
proposed lowering the ozone standard, ambient air quality, to 
70 parts per billion. In your opinion, would the RFS complicate 
efforts to attain a more stringent standard if that's the case?
    Dr. DeCicco. Yes, it could. As you move into sort of the 
various parts of the low-blend realm, you can worsen 
evaporative emissions from ethanol. It's--I wouldn't want to 
say that it's a large effect, but it's an aggravating effect.
    Mr. Babin. But if you couple that with higher food prices 
and the other negatives of the ethanol industry, it certainly 
could have a detrimental effect, right?
    Dr. DeCicco. Well, I'm sticking kind of myself on the 
environmental side here. I know there's different views on 
the----
    Mr. Babin. Well, okay.
    Dr. DeCicco. --food price impacts.
    Mr. Babin. Okay. I was just thinking.
    And, Dr. Dinan, what is your assessment of the impact of 
the RFS on blending of biofuels into the transportation fuel 
supply? And has the use of biofuels increased the cost of the 
RFS, or would we have seen ethanol production grow without a 
federal mandate? It's a three-part question.
    Dr. Dinan. Okay. Well, we really don't actually answer the 
question did corn ethanol use grow because of the RFS. Our 
analysis is really about looking forward. So what we do look at 
is whether or not the use of corn ethanol would decline very 
much if we had a repeal of the law. And we indicate that we 
don't think it would decline that much because there are other 
benefits that blenders received by blending in the corn 
ethanol. It helps them with octane requirements and with 
meeting carbon monoxide emission reductions requirements. So 
that's why we don't find a big drop in corn ethanol use.
    But if the law was to push the amount of corn ethanol--of 
total ethanol, total renewable fuels up to the levels required 
under the law, EISA rather than the amount proposed by EPA, 
then there would be a significant problem with the blend law.
    Mr. Babin. Okay. Thank you. My time is expired. Thank you, 
Mr. Chairman.
    Chairman Bridenstine. Thank you, Mr. Babin. So if we're 
blending ten percent now, if we were to repeal the RFS, we 
would still be blending what according to your study?
    Dr. Dinan. We think it would stay at roughly ten percent 
for at least----
    Chairman Bridenstine. So the idea that we're going to ruin 
all these jobs and destroy these markets, that's incorrect?
    Dr. Dinan. Well, what we say is that there's a tension 
between keeping the costs down and pushing the technology. So 
if you were to repeal the RFS, you would reduce incentives to 
create more E85 stations and also for production facilities for 
more advanced biofuels.
    Chairman Bridenstine. Okay. The gentleman, Mr. Abraham, is 
recognized from Louisiana.
    Mr. Abraham. Mr. Coleman, I see you on the button. Give me 
your opinion if we repealed the RFS. What would that do to 
general farm prices right now? They're low already, the 
commodity prices. What would the total repeal of the RFS do to 
the----
    Mr. Coleman. That's a question for----
    Mr. Abraham. Yes, sir.
    Mr. Coleman. --myself?
    Mr. Abraham. I saw you wanted to answer.
    Mr. Coleman. Yes, sure. The--well, if you repeal the RFS, 
you're taking away a value-added agriculture market for the 
agricultural community. And so I think the fundamental premise 
of the RFS is that we have enough corn and we have as many 
farms and as much agricultural product to do more than just one 
thing, and that's to feed animals, that we can make bioplastics 
out of them, we can make fuel, we can make a number of 
different things.
    If you ask the agricultural community, they don't feel like 
they should be in a box of only producing food. And I think low 
corn prices today bear that out. And so what you would have is 
a situation where repealing the RFS would create more economic 
pain in the heartland, and that is not something that we want 
to see.
    In terms of clarifying the jobs part of this, I represent 
the advanced biofuels industry, and I think what's at stake 
here, even though the debate that the oil industry tries to 
have this conversation around is about corn ethanol, what's at 
stake is the advanced biofuels part of the RFS.
    And so if the thesis is that we're not going to lose corn 
ethanol by repealing the RFS, my feeling is isn't that what 
we're talking about? We're talking about innovation here.
    Mr. Abraham. All right. Let me go back to you first, Mr. 
Coleman. In view that we have RFS standards now, what's your 
opinion? Why are our corn prices so low now?
    Mr. Coleman. A couple of reasons. The first is, is that we 
have plenty of supply against demand, and so we've come back to 
a situation where after a couple years of drought, which drove 
corn prices up, we are now in a healthy corn market and even an 
oversupplied corn market where we have so much supply that it's 
driving prices down.
    The second reason is, is if you look at the correlation 
analysis of corn prices and oil prices, you will see very, very 
strong correlation because oil is a primary input for 
agricultural commodity production, and also it is a huge driver 
in terms of futures trading, et cetera. So you see corn and oil 
matching together, and any time you have corn--oil prices 
coming down, you almost always have agricultural commodity 
prices coming down. And so with lower oil prices, you have 
lower corn prices.
    Mr. Abraham. And Dr. Dinan had said in her testimony that 
the CBO report mentioned that fuel and food prices depend on a 
number of factors outside of the RFS. Do you agree with that 
statement, Mr. Coleman?
    Mr. Coleman. Yes. I mean oil is the primary driver, and I 
should note about the CBO report--and I believe that the doctor 
did not set the program confines--but it did not analyze the 
economic benefits of reducing petroleum dependence in that 
report, and that's a little bit like looking at the economic 
benefits of a jobs program and not looking at the economic 
benefits of jobs creation.
    And so we have a problem with that report and we think that 
needs to be fixed. So I think if you look at the actual central 
point of the RFS, which is to reduce petroleum dependence, if 
we add that into the equation, the economic benefits of the RFS 
would be astounding.
    Mr. Abraham. Thank you, Mr. Chairman. I yield back.
    Chairman Bridenstine. Mr. Westerman from Arkansas is 
recognized for five minutes.
    Mr. Westerman. Thank you, Mr. Chairman, and thank the 
witnesses for being here today. These are some fascinating 
subjects, and I'm struggling a little bit on which one to 
address here. We've got land use and a clean environment. With 
got the law of conservation of mass and energy and energy 
conservation or net energy gain or the carbon cycle and 
economics versus of real versus inflationary food costs. These 
are all things that I like to talk about.
    But let's start off with the carbon cycle and land use. 
And, Dr. DeCicco, if I understand your argument that there's--
and getting back to the law of conservation of mass and energy, 
there's only so much carbon in the world, and the question is 
where's that carbon going to be located? It's either going to 
be in the atmosphere or is going to be sequestered somewhere 
under the ground or in biomass here on the earth. And if we 
create a new crop source to make ethanol or corn, then you're 
going to be clearing more land to produce this corn. So you're 
changing land-use and putting a crop there that's going to be 
planted and harvested every year.
    I remember being at a conference on renewable energy where 
they were showing in South America where they had cleared this 
highly productive land to grow--I don't remember if it was 
sugar beets or corn, but in the photo there was timber from a 
rainforest stacked up in a perimeter around the land. It was 
used to keep animals out of the crop.
    But as we look at that, something we haven't talked about 
is the energy gained from corn ethanol. And the research that 
I've looked at show that somewhere between 1 to 1.3, maybe even 
as high as 1.6 on the energy put into producing corn ethanol 
versus the energy that you get out. We've been talking more 
about the carbon balance on it. But if we look at other forms 
of cellulosic ethanol or biomass, even though the processes 
haven't been refined, the numbers on the net energy gain are 
much higher than what we see on corn ethanol.
    So are you saying we should totally abandon all renewable 
fuels, or is there room for more research to develop some of 
these cellulosic ethanol technologies maybe from woody biomass 
that do have even a bigger carbon cycle effect?
    Dr. DeCicco. Sure. I take issue with the mandating of the 
fuels from an environmental point of view. I think it's 
important to support the research side. In other words, as I've 
pointed out, there is a potential if it's done right, if 
technology materializes in an economically viable way at 
commercial scale for forms of cellulosic production in a way 
that has failed to materialize for nearly 40 years now--I mean, 
this is not a new area of research--then, you know, that could 
be a good thing provided the land use is properly managed and 
that there are guarantees that the actual production of 
whatever biomass is going to be going into the cellulosic fuel 
is done in such a way that it increases the rate at which 
carbon is removed from the atmosphere without depriving the 
food and feed system of carbon.
    So there's two big ifs that have not been met, are not in 
my estimation close to being met for the commercial viability 
of so-called advanced biofuels. So, yes, you know, in terms of 
this committee's role in advising the research programs, we 
should continue research in this area and maybe make, you know, 
progress through that. But when it comes to intervening in the 
marketplace and trying to force fuels in that are not 
commercially viable that have a dubious carbon pedigree anyway 
because the analyses backing them were done incorrectly, I 
think that, you know, is very questionable----
    Mr. Westerman. And if we look at----
    Dr. DeCicco. --due to mandated----
    Mr. Westerman. --in our forests across the country right 
now, we've seen hundreds of millions of tons of carbon going up 
in smoke every year from forests that are mismanaged. And if 
that carbon were captured and used for energy, it seems to me 
like there would be a net benefit from energy and the carbon 
cycle to do that.
    Dr. DeCicco. That's correct. I mean, that's an example 
where if you're capturing carbon, harvesting carbon say from 
forest residues that are at risk of causing a fire and burning 
up anyway or corn stover to the extent you can do that without 
overly degrading your soils, that would decay anyway, release 
its carbon, those are examples of what I mean by additional 
carbon. You know, you're getting additional carbon because 
you're taking carbon that otherwise would either burn or decay 
without being put to commercial use.
    So those are potentially legitimate sources of carbon, but 
I don't think that that then justifies some kind of mandatory 
use. I think that you need to look at that situation carefully, 
and then I would go back to we need to have the right market 
signals here involved, and that's not something you get through 
a technology winner-picking mandate.
    Mr. Westerman. And I think I'm out of time, Mr. Chairman, 
but if you'll oblige me just a few minutes, or are we going to 
get a second round of questions?
    Chairman Bridenstine. I'll give you another minute.
    Mr. Westerman. All right. Thank you.
    So if we look at where we're at on the cellulosic fuels, it 
seems to me it would make sense that while conventional energy 
prices are low, that we put more money into research to make 
these cellulosic fuels competitive in a free market so that 
when conventional fuel costs go up, we could use these 
renewable fuels in a market-based economy so that we're not 
subsidizing or mandating the use of them. But we just don't 
have the technology yet to make them cost-effectively to do 
that. Would you agree with that? Mr. Coleman, your finger is on 
the button.
    Mr. Coleman. Yes. That's the industry I represent. And so, 
you know, I think I've made myself clear on this whole idea of 
a price-driven marketplace that we don't have. If you look at 
the history of ethanol use in this country, about 90 percent of 
the last ten years ethanol has been vastly cheaper than 
gasoline and the oil industry hasn't used more than it has been 
required by the government to use. If we had a price-driven 
marketplace, we would already have the things that we're 
talking about wanting now, consumer choice at the pump, an 
alternative to gasoline hedges against pump price spikes 
associated with petroleum, et cetera.
    The second thing I would take issue with is this cost 
component of cellulosic. If you look at how much--we're at the 
end of the era of light sweet crude that just squirts out of 
the ground. We are at the deepwater, fracking, tight oil part 
of the evolution of crude oil that is infinitely more expensive 
than light sweet crude. And if you look at the costs of 
cellulosic biofuel versus the marginal oil gallon such as the 
money that was spent in the Bakken, we are cost-competitive 
with those oil plays.
    And so what we need to drive competition in the marketplace 
is access to the marketplace that we are not going to get 
unless we have either the RFS or we break up the oil companies, 
which I don't think is very politically popular.
    Mr. Westerman. Yes. And, you know, most consumers, I think, 
care about what the price is on the gas pump, however it gets 
there.
    Mr. Drevna, would you like to address that?
    Mr. Drevna. I don't know where to start. I just can't 
believe what I just heard in this hearing room. First of all, 
the--there still is--as the doctor said at the end of the table 
said, there's still a ten percent maximum blend wall you can't 
meet. And that automobile or that lawnmower or that chainsaw 
doesn't give anything about where that ethanol comes from, 
whether it's cellulosic or whether it's corn or whether it's 
some still in West Virginia. It's ethanol. And we have blend 
wall. Even EPA, who I very rarely agree with, says there's a 
blend wall problem, and it will be for the distant future.
    Number two, Mr. Coleman keeps on talking about this grand 
conspiracy of the big oil trying to stop penetration into the 
market. Well, the reality of the situation is big oil, little 
oil, independent refiner in, you know, in the middle of the 
corn belt, they do not control anything to do with the market. 
Ninety-five percent of the retail market is controlled by 
independent operators, just as my colleague down here, Mr. 
Anderson, is an independent operator for a franchise. It's the 
same thing. If those franchisees want to sell more ethanol or 
want to put in E85 pumps, have at it.
    If my friends from the advanced biofuel or the corn ethanol 
folks want to invest rather than sup at the government trough 
year in and year out, they can put the money--they could talk 
to the owners of these--of the gas stations and say, hey, we're 
going to invest with you because it's got to be--it's not oil 
versus advanced.
    Chairman Bridenstine. I would like to----
    Mr. Drevna. It's what the consumer wants.
    Chairman Bridenstine. I would like to say how much I've 
enjoyed this exchange between Mr. Coleman and Mr. Drevna, but 
in the interest of the folks on the committee, we're going to 
go to our next questioner.
    Mr. Westerman. Thank you for that extended minute, Mr. 
Chairman.
    Chairman Bridenstine. You bet.
    Mr. LaHood, you're recognized for five minutes.
    Mr. LaHood. Thank you, Mr. Chairman. And, Mr. Chairman and 
Chairman Loudermilk, I look forward to working with you on this 
issue, and appreciate the testimony of the witnesses here 
today.
    I'm brand new, come from Illinois, Ag is the number one 
industry in our state. And in hearing the testimony 
particularly from Dr. DeCicco and Mr. Drevna, I mean, it really 
seems incongruent when you look at the genesis of the law and 
going back and looking at the Energy Policy Act of 2005 and the 
EISA law of 2007. And at the signing ceremony there, the 
emphasis on why that was put in place, the RFS, you know, 
President Bush talked about protecting the environment, 
strengthening our energy security, supporting American farmers.
    And you listen to that and also the Secretary of Energy at 
the time Samuel Bodman and Secretary Johanns, who's now a U.S. 
Senator, and you listen to what they said then and how that's 
played out and then you hear the testimony here today, they're 
in conflict. And I'm trying to rationalize that and figure out 
where the truth lies.
    And I guess in looking at my own district, I have a very 
rural district in central and west central Illinois. And I 
think in my district--ag is the number one industry in the 
State of Illinois. We have--you know, we have some of the most 
fertile farmland in the entire world. And I look at what it 
does in Illinois in terms of what it's done for our consumers.
    I don't--to be honest with you, Mr. Anderson, I don't hear 
much complaints about food prices going up in my district. We 
have some big livestock operations there, you know, we have 
some of the highest yields we've had, energy prices and 
gasoline prices have been low in Illinois, and then you--our 
air pollution has gone down almost every year in Illinois.
    So I look at those tangible benefits and I also look at the 
jobs that are created in Illinois through agriculture, whether 
that's John Deere or ADM or Caterpillar. There are lots of 
small and medium-sized businesses that have benefited from this 
law.
    And I guess in looking at, Dr. DeCicco, the flaws that you 
laid out--and I have to admit I don't know much about carbon 
neutrality or violation of carbon mass--some of these flaws, 
but I guess in looking at the genesis of this bill and what was 
put forward and the rationale and how that's playing out, I 
guess I have not heard from--whether that's Secretary Bodman or 
Secretary Johanns--on acknowledging these flaws or making 
statements that the law somehow was incorrect and we need to 
amend that or revise that. Can you comment on that?
    Dr. DeCicco. Sure. I think, as you pointed out, at the time 
that the law was passed and especially when EISA greatly 
expanded the renewable fuel mandate, there were really sort of 
three public policy rationales. You can kind of think of them 
as a three-legged stool that propped up this expansive 
requirement for renewable fuels. And as you point out, one is 
rural economy. And, you know, I'm certainly not going to 
question that. I mean there's--I don't think there's a doubt 
that creating additional demand for grains and other farm 
commodities is going to help those economies.
    Then there's the energy security rationale. Well, I think 
that these commodity markets respond slowly, especially the oil 
market. And I think we've seen a lot more energy security come 
from increased petroleum than we have from relatively small and 
relatively costly biofuel. So I'm not so sure about that second 
leg.
    The environmental lag, in spite of, I think, good 
intentions and Department of Energy-sponsored analyses and so 
on, that has not stood the test of time scientifically. I mean 
I would have to say, you know, the way I look at my analyses is 
I've essentially cut off that environmental leg.
    So whether the RFS can stand on, you know, a rural economic 
development leg and perhaps an energy security leg--and I'll 
kind of let others debate it--there's certainly no longer an 
environmental rationale for a mandate like this.
    Mr. LaHood. I would just follow up on that. So in looking 
at those flaws that you laid out and what you mentioned, I 
mean, can--are you aware of--you know, for instance, Secretary 
Bodman, who was a chemical engineer from MIT, that he has 
acknowledged those flaws or put anything on record to say that 
this was done inappropriately or the wrong way?
    Dr. DeCicco. I'm not aware of that. I mean I do acknowledge 
that the criticism--environmental criticisms that have come to 
the fore in this policy in terms of the scientific literature 
are relatively recent. We know more now than we did some time 
ago.
    I would say--and I'm happy to put this in the record--in 
2002 I was at the Environmental Defense Fund and co-authored a 
brief position statement on the prospect of a mandate. And 
myself and the other colleague there, Tim Searchinger, now at 
Princeton University, we raised red flags. Not all the science 
was in place for me at that time to be able to give as strong a 
criticism on the environment as I'm able to do today, but we 
were certainly concerned and wary of the risks at that time.
    Unfortunately, you know, it's taking some time for that to 
be assimilated, digested by a lot of people, the Department of 
Energy and elsewhere, who have been guided by analyses that we 
now know were incorrect.
    Mr. LaHood. And the last thing I would say, Mr. Chairman, 
is, you know, I've tried to find evidence either from, you 
know, Secretary Bodman or the EPA Director at the time Stephen 
Johnson or from President Bush that somehow this was a flawed 
law and was not done the right way, and I've had difficulty 
finding that evidence.
    Thank you very much, Mr. Chairman.
    Chairman Bridenstine. Thank you.
    Mr. Beyer has been listening patiently to my side of the 
aisle for the better half of probably 30 minutes, so I'd like 
to recognize you for five minutes and then I'll close it out.
    Mr. Beyer. Thank you, Mr. Chairman.
    And with due deference to the Chairman of the Subcommittee 
on the Environment being from Oklahoma, I'd like to study--cite 
a study from the University of Tulsa National Energy Policy 
Institute that estimated that the United States has spent $8 
trillion from 1976 to 2010 defending access to oil supplies in 
the Persian Gulf.
    So, Mr. Coleman, a rhetorical question, is the massive cost 
that U.S. taxpayers pay every year to defend these shipping 
lanes included in the price of oil?
    Mr. Coleman. No, it's not and it's because we pay for it as 
taxpayers. And so this is part of the reason that this whole 
notion of let the market decide, which is probably the proper 
notion to have in 90 percent of the markets in this country, 
doesn't work for motor fuels. And so if the oil industry had to 
pay for getting itself through the Straits of Hormuz, the cost 
of gasoline would be much higher. But right now, the taxpayer 
pays for it.
    And the oil industry also--and I will point out with regard 
to the Bakken and tight oil, one of the biggest lease-holders 
in the Bakken testified before Senate Finance in 2012 that the 
only reason that they were successful there is because of the 
tax subsidies that allowed them to keep their money and 
reinvest it.
    And so when it comes to energy security, I think the 
government is properly engaged because it matters that we have 
enough energy to get to work and go to the grocery store, and 
we should--and the government should stay engaged. But this 
idea that the RFS is somehow distorting a free market is just 
not a serious allegation.
    Mr. Beyer. And as we talked about, the great promise of 
advanced biofuels rather than simple corn ethanol, if we do 
away with the Renewable Fuel Standard and that first-generation 
ethanol plants goes away, what implication does not have for 
being able to develop an advanced biofuels market?
    Mr. Coleman. Well, if you look at renewables writ large, so 
whether it's wind, solar, or any innovation product, you will 
find that revenues created by first gen get poured into 
innovation in second-generation. So first, the windmill 
companies that built the big windmills are the ones financing 
smaller windmills and distributed energy, same for solar, same 
for geothermal, et cetera, et cetera.
    In our industry that is starkly clear. So if you look at 
the first movers in cellulosic ethanol, you will see Abengoa, 
you will see POET/DSM, you will see DuPont, you will see Quad 
County. Those are all first-gen corn ethanol companies who are 
taking revenue streams from the selling of corn ethanol, and 
because the RFS sends a clear signal to diversify feedstock and 
innovate, they are doing that.
    And so a lot of this discussion about corn ethanol is 
really a distraction. The RFS stops requiring corn ethanol this 
year. It flatlines over time. It is a stalking horse for 
incumbents to come after the advanced biofuels industry, and 
that is the largest part of the RFS going forward, 90 plus 
percent of the RFS going forward. So if you repeal it or even 
change of law, which scares investors, we will be in a 
situation where we continue to build these next-generation 
plants overseas, and that would be a huge opportunity lost.
    Mr. Beyer. Great. Great. Mr. Chairman, I yield back. Thank 
you very much.
    Chairman Bridenstine. You bet. So you mentioned Tulsa 
University, and you mentioned what we do in the United States 
Navy, of which I spent many years of my life. I would just like 
to let the record show that if terrorists or rogue nations 
wanted to take control of the corn market, we would defend the 
corn market as well.
    Mr. Drevna, did you have a thought on that issue? I saw 
you----
    Mr. Drevna. Yes, I appreciate it, Mr. Chairman. This whole 
thing, you know--and Mr. Coleman is right. The--and he used the 
right term, too. He said the corn ethanol flatlines after this 
year, 15, you know, some billion gallons. The problem is is 
that the EISA '07 calls for 36 billion gallons of phantom 
fuel--or 22 billion of which are phantom fuels by 2022. What 
are we going to do? What's the refining industry--what are the 
obligated parties going to do between now and 2022 when, you 
know, if you look at the success/failure rate of these advanced 
biofuels, there's--you know, as I said in my testimony, if it 
weren't for EPA to change the--a scientific definition and you 
look at the testimony, the production from these facilities is 
minuscule, and it's going to be minuscule.
    So are we supposed to say, well, it's right around the 
corner so you obligated parties keep sending money to the 
federal government and buying tax credit--or credits to keep 
this industry going, or do you want to let investors invest in 
this stuff just like every other entrepreneur in this country 
has done forever and make a better product and take the risk 
rather than have them being propped up by the government and 
then having the taxpayer end up paying for it? That's the 
choice you have to make. I appreciate the ability to respond.
    Chairman Bridenstine. Absolutely. So in summary what I 
learned, the Renewable Fuel Standard is damaging to the 
environment, which was new to me, by the way, in this hearing 
and it actually increases carbon emissions. Food prices have 
been increased, although there's some debate about that, but I 
think on average it will go up a little bit, which makes the 
standard of living for all Americans a little bit harder to 
achieve. And repealing the Renewable Fuel Standard would not, 
you know, get rid of jobs.
    I do believe that there may be a place for the government 
to be involved in research and development for advanced 
biofuels, but creating a mandate is not the right solution.
    With that, I thank the witnesses for their valuable 
testimony and the Members for their questions. The record will 
remain open for two weeks for additional comments and written 
questions from Members.
    This hearing is adjourned. Thank you.
    [Whereupon, at 11:55 a.m., the Subcommittees were 
adjourned.]

                               Appendix I

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                   Answers to Post-Hearing Questions


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                             Appendix II

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                   Additional Material for the Record



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