[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]





                  EXAMINING ADVANCEMENTS IN BIOFUELS:
                       BALANCING FEDERAL RESEARCH
                         AND MARKET INNOVATION

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

                             JOINT HEARING

                               BEFORE THE

                     SUBCOMMITTEE ON ENVIRONMENT &
                         SUBCOMMITTEE ON ENERGY

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 25, 2017

                               __________

                           Serial No. 115-24

                               __________

 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
DANA ROHRABACHER, California         ZOE LOFGREN, California
MO BROOKS, Alabama                   DANIEL LIPINSKI, Illinois
RANDY HULTGREN, Illinois             SUZANNE BONAMICI, Oregon
BILL POSEY, Florida                  ALAN GRAYSON, Florida
THOMAS MASSIE, Kentucky              AMI BERA, California
JIM BRIDENSTINE, Oklahoma            ELIZABETH H. ESTY, Connecticut
RANDY K. WEBER, Texas                MARC A. VEASEY, Texas
STEPHEN KNIGHT, California           DONALD S. BEYER, JR., Virginia
BRIAN BABIN, Texas                   JACKY ROSEN, Nevada
BARBARA COMSTOCK, Virginia           JERRY MCNERNEY, California
BARRY LOUDERMILK, Georgia            ED PERLMUTTER, Colorado
RALPH LEE ABRAHAM, Louisiana         PAUL TONKO, New York
DRAIN LaHOOD, Illinois               BILL FOSTER, Illinois
DANIEL WEBSTER, Florida              MARK TAKANO, California
JIM BANKS, Indiana                   COLLEEN HANABUSA, Hawaii
ANDY BIGGS, Arizona                  CHARLIE CRIST, Florida
ROGER W. MARSHALL, Kansas
NEAL P. DUNN, Florida
CLAY HIGGINS, Louisiana
RALPH NORMAN, South Carolina
                                 ------                                

                      Subcommittee on Environment

                    HON. ANDY BIGGS, Arizona, Chair
DANA ROHRABACHER, California         SUZANNE BONAMICI, Oregon, Ranking 
BILL POSEY, Florida                      Member
MO BROOKS, Alabama                   COLLEEN HANABUSA, Hawaii
DANIEL WEBSTER, Florida              CHARLIE CRIST, Florida
BRIAN BABIN, Texas                   EDDIE BERNICE JOHNSON, Texas
GARY PALMER, Alabama
BARRY LOUDERMILK, Georgia
JIM BANKS, Indiana
CLAY HIGGINS, Louisiana
LAMAR S. SMITH, Texas
                                 ------                                

                         Subcommittee on Energy

                   HON. RANDY K. WEBER, Texas, Chair
DANA ROHRABACHER, California         MARC A. VEASEY, Texas, Ranking 
FRANK D. LUCAS, Oklahoma                 Member
MO BROOKS, Alabama                   ZOE LOFGREN, California
RANDY HULTGREN, Illinois             DANIEL LIPINSKI, Illinois
THOMAS MASSIE, Kentucky              JACKY ROSEN, Nevada
JIM BRIDENSTINE, Oklahoma            JERRY MCNERNEY, California
STEPHEN KNIGHT, California, Vice     PAUL TONKO, New York
    Chair                            JACKY ROSEN, Nevada
DRAIN LaHOOD, Illinois               BILL FOSTER, Illinois
DANIEL WEBSTER, Florida              AMI BERA, California
NEAL P. DUNN, Florida                MARK TAKANO, California
LAMAR S. SMITH, Texas                EDDIE BERNICE JOHNSON, Texas























                            C O N T E N T S

                             July 25, 2017

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

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

                           Opening Statements

Statement by Representative Andy Biggs, Chairman, Subcommittee on 
  Environment, Committee on Science, Space, and Technology, U.S. 
  House of Representatives.......................................     4
    Written Statement............................................     6

Statement by Representative Suzanne Bonamic, Ranking Member, 
  Subcommittee on Environment, Committee on Science, Space, and 
  Technology, U.S. House of Representatives......................     8
    Written Statement............................................    10

Statement by Representative Randy K. Weber, Chairman, 
  Subcommittee on Energy, Committee on Science, Space, and 
  Technology, U.S. House of Representatives......................    12
    Written Statement............................................    14

Statement by Representative Marc A. Veasey, Ranking Member, 
  Subcommittee on Energy, Committee on Science, Space, and 
  Technology, U.S. House of Representatives......................    16
    Written Statement............................................    18

Statement by Representative Eddie Bernice Johnson, Ranking 
  Member, Committee on Science, Space, and Technology, U.S. House 
  of Representatives.............................................    20
    Written Statement............................................    22

                               Witnesses:

Dr. Paul Gilna, Director, BioEnergy Science Center (BESC) and 
  Deputy-Division Director of Biosciences, Oak Ridge National 
  Laboratory
    Oral Statement...............................................    24
    Written Statement............................................    27

Dr. John DeCicco, Research Professor, University of Michigan 
  Energy Institute
    Oral Statement...............................................    36
    Written Statement............................................    38

Ms. Emily Skor, Chief Executive Officer, Growth Energy
    Oral Statement...............................................    53
    Written Statement............................................    55

Mr. Nicolas Loris, Herbert and Joyce Morgan Research Fellow, 
  Institute for Economic Freedom and Opportunity, Heritage 
  Foundation
    Oral Statement...............................................    64
    Written Statement............................................    67

Discussion.......................................................    91
 
                  EXAMINING ADVANCEMENTS IN BIOFUELS:
            BALANCING FEDERAL RESEARCH AND MARKET INNOVATION

                              ----------                              


                         Tuesday, July 25, 2017

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

    The Subcommittees met, pursuant to call, at 10:04 a.m., in 
Room 2318, Rayburn House Office Building, Hon. Andy Biggs 
[Chairman of the Subcommittee on Environment] presiding.


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    Chairman Biggs. Good morning. The Subcommittees on 
Environment and Energy will come to order. Without objection, 
the Chair is authorized to declare recesses of the 
Subcommittees at any time.
    Welcome to today's hearing entitled ``Examining 
Advancements in Biofuels: Balancing Federal Research and Market 
Innovation.'' And I recognize myself for five minutes for an 
opening statement.
    Good morning, and welcome to today's joint Subcommittee 
hearing entitled ``Examining Advancements in Biofuels: 
Balancing Federal Research and Market Innovation.'' Today, 
we'll examine federal biofuel funding and the effects of 
federal mandates on the market. We will also examine basic 
research in biology and biochemistry and the ways that it can 
be best utilized by industry to spur private innovation.
    I thank each of our witnesses for being here today. Some of 
you have traveled a good distance, and we're very appreciative 
that you would take time to share your expertise on this 
important subject.
    For far too long, the federal government has been picking 
winners and losers in the American energy market. Federal 
policies prop up unsuccessful or mediocre business ventures, 
limit opportunities for new or different business ideas, and 
stifle innovation in the private sector. It is time we focus on 
and pursue more market-friendly policies, rather than spending 
taxpayer dollars on misguided subsidies and inefficient 
commercial-scale projects. We should avoid intervening in the 
free market and focus instead on supporting federal funding for 
basic research that supports technological advances in biofuels 
and provides tools for businesses to deploy new technologies.
    As an initial reform, I will be introducing the FUEL Reform 
Act tomorrow to fully eliminate the biofuel subsidies and 
related programs in Title IX of the farm bill. The FUEL in that 
bill title is an acronym that stands for ``Farewell to 
Unnecessary Energy Lifelines,'' and I very much hope that our 
nation will follow that policy directive.
    Over the last 30 years, the American taxpayer has paid out 
billions of dollars in federal biofuel subsidies. For instance, 
the 2014 Farm Bill energy titles alone cost taxpayers $879 
million, funding things like the Bioenergy Program for Advanced 
Biofuels. This program in turn provides subsidies to advanced 
biofuels producers to increase their production levels without 
taking into account such basic market principles as real-world 
demand.
    Senseless policies like this distort the market by forcing 
businesses to improvise rather than innovate, and the American 
energy consumer foots the bill. By continuing to force 
technologies into the market that are not competitive or in 
demand, we are doing the American people a disservice. Simply 
put, we don't get out of these programs what we are putting 
into them.
    Furthermore, the federal government's biofuel policies have 
had an unintended adverse effect on food costs. The price of 
corn, soybeans, and related retail food products have all 
increased. Land is drawn away from competing crops, and input 
prices for livestock producers have gone up. I am, however, 
encouraged that research is underway to improve our ability to 
generate biofuels more efficiently, both from traditional 
sources like corn and soybeans, as well as from new sources 
like poplar trees and switchgrass.
    We will hear today about research conducted by the 
BioEnergy Science Center at Oak Ridge National Laboratory, one 
of the Department of Energy's Bioenergy Research Centers. 
Researchers at Oak Ridge are discovering ways to generate 
advanced biofuels from new sources that are not also food 
stock. Partnering with industry stakeholders, they will pursue 
fundamental science that supports new technologies to increase 
the sustainability and economic viability of advanced biofuels.
    While I stress very strongly once again that we should be 
working toward the goal of fully eliminating energy subsidies, 
I am interested in learning more about how current taxpayer 
dollars can be used more effectively and efficiently, 
particularly when it comes to basic and early stage biofuels 
research. The sooner this type of research comes to fruition 
and can be commercialized by the private sector, the better. 
When the free market operates, innovation breaks through, and 
the economy thrives.
    I look forward to learning more from our distinguished 
panel and have no doubt that this will be a wide-ranging and 
fascinating discussion.
    [The prepared statement of Chairman Biggs follows:]
    
    
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    Chairman Biggs. Now, I recognize the Ranking Member of the 
Environment Subcommittee, the gentlewoman from Oregon, for an 
opening statement.
    Ms. Bonamici. Thank you very much, Mr. Chairman, and 
welcome to all of our witnesses.
    Our country's dependence on crude oil to fulfill our 
transportation needs is problematic in at least a few ways. 
It's made us subject to the boom-and-bust cycles of the 
volatile oil market, and it's the reason why, according to the 
EPA, the transportation sector accounts for about 27 percent of 
our country's greenhouse gas emissions. Those are excellent 
reasons why it's crucial for us to develop and use fuels that 
will reduce our carbon footprint while still reliably meeting 
our transportation needs.
    The renewable fuel standard was passed in 2005 to diversify 
our energy portfolio and reduce our reliance on the unstable 
international fossil fuel market. Policies such as the RFS have 
multiple goals in addition to reducing our overreliance on 
crude oil. They include providing more sustainable sources of 
energy, reducing carbon emissions, encouraging rural economic 
growth, and bringing new job opportunities to our districts.
    We will likely hear from some witnesses today that policies 
like the RFS have failed. The evidence, however, points to the 
contrary. Federal policies such as the RFS have grown our 
economy by providing market certainty for biofuels. It's 
allowed the private sector to continue to innovate and expand 
the renewable fuel industry. The Renewable Fuels Association 
found that ethanol supported more than 74,000 direct jobs in 
renewable fuel production and agriculture in 2016.
    The production and use of ethanol also has net positive 
environmental effects through its lifecycle. The Department of 
Energy's Argonne National Laboratory has found, through 
lifecycle analysis, that corn ethanol can produce approximately 
48 percent less greenhouse gas emissions than conventional 
gasoline. This is bolstered by sustainable farming practices in 
the United States that have led the same Argonne team to find 
that the production of a gallon of corn ethanol can use up to 
50 percent less water than the production of a gallon of 
petroleum gasoline.
    The importance of federal biofuels research at the 
Department of Energy cannot be overstated. These investments 
allow for further development of advanced biofuels by using the 
technology infrastructure from first-generation biofuels. 
Despite this vital ongoing work at our national labs, the 
draconian cuts to biofuels research programs in the President's 
budget threaten to derail current research priorities.
    Regulations like the RFS are making a difference at the 
state level as well. When I was in the Oregon State Senate, we 
passed a bill to adopt a clean fuel standard to lower the 
carbon intensity of transportation fuels by ten percent over a 
ten-year period. And just this year, the Oregon Economic 
Council found that within the first three quarters of 
implementing the standard, more than 589,000 tons of climate 
pollution had been displaced. The standard has also helped grow 
area businesses like SeQuential in Portland, Oregon, which 
converts used cooking oil into biodiesel.
    Also in my district in northwest Oregon, Summit Foods, they 
make delicious apple chips and they sell dried blueberries to 
places like Panera. Then, they use the food waste to make a 
fuel called Thunderbolt that they sell to racecar drivers. 
Companies in the region give their food waste to Summit, and 
they convert it into fuel. All of the products would otherwise 
go into the landfill.
    Racecar and race boat drivers love this fuel. They get 30 
to 50 percent more horsepower. One customer said he was never 
able to get his race boat to go over 200 miles an hour, but 
with Thunderbolt he can. And traditional petroleum race fuel 
costs $10-$20 a gallon, and Thunderbolt is about half of that. 
Racecar drivers are proud to purchase a product made in Oregon 
that's great for their cars and great for the environment.
    And as I've said in the past, 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. The development of first-generation and 
advanced biofuels, whether through market innovation or 
federally funded research or both can help us achieve these 
goals and should be encouraged by this Committee.
    I look forward to the discussion today about how both 
federal research and private sector innovation are helping our 
country move forward in the development of biofuels.
    With that, I yield back the balance of my time. Thank you, 
Mr. Chairman.
    [The prepared statement of Ms. Bonamici follows:]
    
    
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    Chairman Biggs. Thank you, Ms. Bonamici.
    I now recognize the Chairman of the Subcommittee on Energy, 
Mr. Weber, for his opening statement.
    Mr. Weber. Thank you, Chairman.
    Good morning and welcome to today's joint Environment and 
Energy Subcommittee hearing examining federal support for 
biofuels. Today, we will hear from witnesses on the cost and 
environmental impact of federal mandates and subsidies for 
biofuels production and their impact on the fuels market. We 
will also hear about the exciting basic and early stage 
research happening at our national labs that can provide the 
foundation for development of new, more efficient, advanced 
biofuels and bioproducts.
    As we've heard before, the federal government is a poor 
substitute for the market when it comes to picking the most 
effective energy sources and technologies. I would add the 
federal government seems to pick more losers than winners. 
Federal subsidies, grants, loans, and loan guarantees may prop 
up an industry or give it a competitive advantage, but they 
can't and do not drive innovation. The biofuels industry 
provides a cautionary example of this misplaced government 
investment.
    Unfortunately, the federal government hasn't accomplished 
much more than require the use of conventional biofuels that 
were already available in the commercial market. Did I mention 
the federal government picks more losers than winners it seems? 
Congress started with worthy goals, enacting mandates and 
authorizing subsidies with the hope of achieving energy 
independence and improving the environment. But as we will hear 
from our witnesses today, conventional biofuels cost the 
taxpayers money through the cost of federal subsidies and grant 
programs and don't actually benefit the environment.
    The federal government has an important role to play in 
energy innovation but an abysmal track record on picking 
winners when we try to commercialize technology. It is clear 
that the best value for the taxpayer in scientific discoveries, 
new technology, and developing the next generation of science 
is found in basic and early-stage research. Industry can build 
on these early-stage research discoveries and use research 
infrastructure to create market-ready, next-generation energy 
technologies.
    We can see this nexus between basic research and potential 
commercial technology in the Department of Energy Bioenergy 
Research Centers, or BRCs. Funded through the DOE Office of 
Science, these centers conduct basic research in genomic 
sciences and microbial systems biology to advance energy-
relevant systems biology. Researchers at these BRCs provide 
foundational science to industry partners, who then can develop 
new products and biofuels based on their discoveries.
    Along with three other centers around the country, the BRC 
at Oak Ridge National Lab--led by Dr. Paul Gilna, who joins our 
panel today--focuses on cutting-edge research to gain access to 
sugars in plants that do not compete with food crops. In a year 
where the Administration and Congress are making tough choices 
about DOE's funding, the bioenergy research centers were 
recently re-charted--re-chartered for five years by Secretary 
Perry, with $40 million in funding awarded in fiscal year 2018 
to continue this basic research.
    Dr. Gilna, thank you for joining us today, and we look 
forward to hearing about your important research.
    By getting the government out of the way and allowing the 
market to determine the best approach, we can facilitate 
private industry's efforts to develop technology that will 
increase energy efficiency, reduce environmental impact, and 
actually save the American people money.
    I want to thank our witnesses for testifying today, and I 
look forward to a discussion about the consequences caused by 
the federal government's intervention in the American energy 
market. Congress has the opportunity to fix these problems 
caused by government overreach and should advance legislation 
to repeal existing mandates and roll back expensive subsidy 
programs. This will allow us to invest in basic science 
research that will lead to real innovation in our energy 
supply.
    Mr. Chairman, I yield back.
    [The prepared statement of Mr. Weber follows:]
    
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    Chairman Biggs. Thank you, Mr. Weber.
    I now recognize the Ranking Member of the Subcommittee on 
Energy, Mr. Veasey, for his opening statement.
    Mr. Veasey. Thank you, Mr. Chairman, for holding this 
hearing and thank you for the witnesses for taking the time to 
be here today.
    Biofuels play an important role in diversifying our 
transportation fuel. They are produced right here in the United 
States, and they provide a much safer source of octane for our 
fuels than MTBE. By replacing MTBE, biofuels help prevent 
harmful contaminants from reaching our drinking water and soil.
    The growth of conventional biofuels has helped launch the 
advanced biofuels industry, which has the potential to provide 
significant environmental benefits to supply our transportation 
fuels. However, I'm not suggesting there are no potential 
drawbacks to take into account. As we set our national biofuels 
policy, we should continue to consider the concerns regarding 
land use, potential degradation of certain engines, legacy 
fleets, recreational boaters, and a variety of different fuel 
types. We should accurately weigh these factors right alongside 
the benefits we receive in emissions reductions, energy 
security, fuel diversification, and economic growth. And it is 
my hope that we will hear a practical assessment of biofuels 
that accurately weighs these costs and benefits from today's 
panelists.
    However, I do want to caution, as oftentimes when we talk 
about anything that's energy-related, including renewable fuel 
standards, are DOE's bioenergy research programs. That 
conversation unfortunately tends to turn to partisan ideology, 
and it's an ideology that would have us decimate our research 
enterprise as we have seen proposed in both the Trump budget 
and the Heritage Foundation's ``blueprints.'' Abandoning our 
investments in innovation and emerging markets is not a recipe 
for economic growth. What it is, though, is a path to make the 
United States less competitive and less attractive for further 
business investments.
    The other criticism of biofuels that we will hear today is 
a scientific one, and one that we should all welcome. Dr. 
DeCicco will inform us of his concerns with how we account for 
lifecycle emissions of corn ethanol. The debate is continuing 
to play out, and as policymakers, I think it's our 
responsibility to listen and do our best to follow the 
guidelines of the scientific consensus when legislating. This 
applies to something as broad as climate change or as narrow as 
emissions modeling for biofuels. And while I look forward to 
hearing and considering the scientific dissent offered during 
this hearing, it does not mean we should throw out the work of 
the collection that these scientists have amassed at these 
national labs and universities. I hope that we can hear from 
other scientists in the future that may provide additional 
perspectives on this issue.
    On that note, I am very proud to offer my strong support to 
DOE's scientists, including those at the national laboratories 
and universities across the country. They are doing valuable 
work that has empowered researchers in the public and private 
sector to make the United States the leader in bioenergy 
research. I am sure that we will also hear from Dr. Gilna from 
Oak Ridge on that very issue.
    As we consider an appropriations bill this week that would 
provide funding for DOE, I strongly encourage my colleagues to 
stand against any attempts to cut vital research at the 
Department. If the House bill were signed into law as-is, the 
bioenergy research centers would receive a severe cut. The 
private sector will not be able to continue the research that 
has been left undone because the federal government cuts them. 
If we want to maintain U.S. leadership in this field, we need 
to advocate for consistent and robust R&D funding.
    I will also look forward to hearing from Ms. Skor about 
where she sees the future of this industry and how we can 
accelerate the path to utilizing next-generation biofuels. As I 
am also sure that we're going to hear today, the market for 
transportation fuels is very competitive, but it is far free 
from an actual--but it's far from an actual free market. There 
are lots of barriers, hidden subsidies that the energy industry 
has enjoyed for many, many years and decades. And with that 
said, I'm glad to see that the U.S. biofuels industry is 
vibrant today, and I look forward to continuing to expand 
consumer choice across the transportation sector.
    And, Mr. Chairman, I yield back the balance of my time.
    [The prepared statement of Mr. Veasey follows:]
    
    
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    Chairman Biggs. Thank you, Mr. Veasey.
    I now recognize the Ranking Member of the Full Committee 
for a statement.
    Ms. Johnson. Thank you very much, Mr. Chairman. And let me 
acknowledge and thank the leadership of both of these 
Subcommittees, as well as welcoming our witnesses today.
    The issue we are discussing this morning is not cut and 
dry. As we have already heard on more than one occasion, some 
are willing to forgo almost any government role in promoting 
the development and use of renewable fuels, ignoring the 
progress we have made to date. This progress would not have 
been possible without the substantial investment and 
innovations made in first-generation biofuels, investments and 
innovations largely driven by the renewable fuel standard. 
While I agree that there are challenges associated with 
production of corn ethanol that merit continued scrutiny, it 
has created a bridge to a cleaner future for our transportation 
fuels.
    That said, the progress of advanced biofuels has not 
matched the expectations that were set in the 2007 law. 
However, with commercial-scale production now picking up, it 
appears that many of the technical challenges have been 
addressed. Now, we must focus our attention on making these 
cleaner fuels more cost-effective and integrating them into the 
market. This is precisely the role of the RFS, as well as of 
the biofuels research supported by the Department of Energy.
    Unfortunately, this Administration is proposing to 
drastically cut our investments area. If the proposed budget 
were enacted, the DOE Office of Science's Bioenergy Research 
Centers would each see their annual budget cut by 60 percent 
and the Bioenergy Technology Office would be cut by 72 percent. 
All of this has been proposed with little justification 
provided beyond a vague declaration that the Department is 
shifting its focus to early-stage research. I hope the 
Department will reconsider these cuts in light of testimony we 
received just last week from an excellent panel of witnesses 
who made clear that there is no clear-cut divide between the 
so-called basic and applied research. That panel also indicated 
that we need to be making investments across the innovation 
spectrum if our nation is ultimately going to remain 
competitive in these growing industries.
    While I understand that there is not yet a scientific 
consensus on his findings with regard to emissions from 
biofuels, I am happy to see that the majority invited a witness 
to today's hearing who is focused on addressing the urgent 
challenge of climate change. I hope Dr. DeCicco also can not 
only provide his insights on our nation's biofuels policy but 
also can convince my colleagues to spend more time and effort 
on addressing what may well be the biggest long-term problem 
facing the world.
    In closing, while there may be differing views on how best 
to guide our nation's biofuels policies, it is clear to me that 
DOE-supported research and the RFS are important tools for 
reducing our dependence on fossil fuels, reducing our nation's 
greenhouse gas emissions, and encouraging innovation that is 
leading to the development of advanced, more sustainable 
alternative fuels. I hope that today's hearing is not the end 
of our discussions on this matter.
    I thank you and yield back.
    [The prepared statement of Ms. Johnson follows:]
    
    
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      Chairman Biggs. Thank you, Ms. Johnson.
    I'll now introduce our witnesses. Our first witness today 
is Dr. Paul Gilna, Director of the BioEnergy Science Center, 
and Deputy Division Director of Biosciences at Oak Ridge 
National Laboratory. Dr. Gilna received his bachelor's degree 
in pharmacology and biochemistry, as well as his Ph.D. in 
pharmacology from the University--from University College 
Dublin.
    Our next witness is Dr. John DeCicco, Research Professor at 
the University of Michigan Energy Institute and Director of the 
University of Michigan Energy Survey. Dr. DeCicco received his 
bachelor's degree in mathematics from the Catholic University 
of America, his master's degree in mechanical engineering from 
North Carolina State University, and his Ph.D. in mechanical 
engineering from Princeton University.
    Our next witness is Ms. Emily Skor, CEO of Growth Energy. 
Ms. Skor received her bachelor's degree in political science 
from Wellesley College.
    Our last witness is Mr. Nicolas Loris, Herbert and Joyce 
Morgan Research Fellow at the Institute for Economic Freedom 
and Opportunity at the Heritage Foundation. Mr. Loris received 
his bachelor's degree in economics, finance, and political 
science from Albright College and his master's degree in 
economics from George Mason University.
    And so I now recognize Dr. Gilna for five minutes to 
present your testimony.

             TESTIMONY OF DR. PAUL GILNA, DIRECTOR,

                BIOENERGY SCIENCE CENTER (BESC)

          AND DEPUTY-DIVISION DIRECTOR OF BIOSCIENCES,

                 OAK RIDGE NATIONAL LABORATORY

    Dr. Gilna. Chairman Biggs, Chairman Weber, Ranking Members 
Johnson, Bonamici, and Veasey, and Members of the 
Subcommittees, thank you for the opportunity to appear before 
you today with this distinguished panel.
    I am Paul Gilna, Director of the BioEnergy Science Center 
at the United States Department of Energy's Oak Ridge National 
Laboratory.
    The Department of Energy has a long and successful history 
supporting the biological and environmental research tracing 
back to the Manhattan Project when scientists sought to 
understand the impacts of radiation fallout and the byproducts 
of nuclear energy production on human health and the 
environment. Research originating from this mission has played 
a central role in advancing our understanding of the structure 
and function of DNA and in 1986 prompted DOE to initiate the 
Human Genome Project, which has become the foundation of 
modern-day genomic research and a critical factor in the 
formation and growth of the biotechnology industry.
    In 2007, DOE, through its Office of Biology and 
Environmental Research, established three bioenergy research 
centers, or BRCs, to address the scientific challenges of 
bottlenecks associated with achieving the cost-effective 
sustainable commercial production of fuels from cellulosic 
biomass. To help understand the problem, envision if you would 
a field of corn used for conventional biofuel production where 
only the kernels are used to extract the starch or sugars that 
are fermented into fuel. Realize, then, that approximately 75 
percent more sugar again can be obtained by utilizing the 
remainder of the plants, whether that be the stalks, leaves, 
and even leftover cobs, saving the kernels for food. The 
challenge has been to develop methods to cost-effectively 
extract those sugars deeply entrapped in the cell wall 
structures of any nonfood crops that we would seek to use.
    The BRCs have consisted of multidisciplinary teams 
involving many national lab, university, and industry partners. 
Together, these three centers represent the work of more than 
1,000 scientists at partners located in 19 States.
    Over the past ten years, through the initial phase of the 
bioenergy research center program, we have created multiple 
fuel production breakthroughs. The three original centers led 
by the University of Wisconsin Madison, in partnership with 
Michigan State University, Oak Ridge National Laboratory, 
Lawrence Berkeley National Laboratory have helped deepen the 
understanding of sustainable agricultural practices, have 
instituted the major reengineering of plant feedstocks, develop 
new methods for deconstructing those feedstocks, and have 
reengineered microbes for more effective fuel production.
    In all, the BRCs have produced over 600 invention 
disclosures, which has led to 378 patent applications and over 
90 patents issued to date. This intellectual property has 
attracted 191 licenses or options, and the centers' scientific 
productivity has resulted in over 2,600 peer-reviewed 
publications over the past decade. Thus, the BRCs of openly 
transferred their knowledge and data to the scientific 
community, and through their intellectual property activities, 
they have transferred substantial insight and expertise that is 
being translated into applications by industry.
    To continue and expand this groundbreaking research 
following extensive peer review, DOE recently announced the 
establishment of four new bioenergy research centers beginning 
in fiscal year 2018. The four centers include two new centers 
led by Oak Ridge and the University of Illinois, along with the 
Wisconsin and California centers. These BRCs will follow on the 
successes of the original centers and lay the scientific 
groundwork for a renewed bio-based economy that promises to 
yield a range of important new products and advanced fuels, 
those beyond ethanol, directly from nonfood biomass. The multi-
institutional centers include research partners now stretching 
across 25 States.
    An important example of what could be achieved in this next 
phase comes from research that will open up the potential for 
using lignin, until now, largely a waste product from the 
biomass pretreatment in the current cellulosic process. At Oak 
Ridge we have demonstrated that lignin can be converted 
directly into carbon fiber, which could then be used in 
applications such as lighter components to help make 
automobiles or aircraft more efficient. Thus, the new industry 
takes shape where many rural bio refineries analogous to oil 
refineries produce numerous value-added bioproducts, presenting 
new renewable options to chemical companies currently reliant 
on petrochemical sources.
    In closing, the body of research from the last ten years, 
which, while originally motivated by biofuels policy and more 
specifically by the promise of cellulosic ethanol, has created 
value and based on that is now poised to head in the direction 
of developing value-added products from cellulosic biomass, 
products that could be easier to make or better than the same 
coming from petrochemicals. Ten years ago, we did not have 
enough scientific knowledge to do this. We do now, and this 
could not have happened without that initial investment in 
research.
    Thank you again for the opportunity to provide this 
briefing. I welcome your questions on this important topic.
    [The prepared statement of Dr. Gilna follows:]
    
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    Chairman Biggs. Thank you, Dr. Gilna.
    I now recognize Dr. DeCicco for five minutes to present his 
testimony.

                 TESTIMONY OF DR. JOHN DECICCO,

                      RESEARCH PROFESSOR,

            UNIVERSITY OF MICHIGAN ENERGY INSTITUTE

    Dr. DeCicco. I wish to thank the Chairs, Ranking Members, 
and other Members of the Committee and Subcommittees for the 
opportunity to testify.
    The question being addressed today--that of the right 
balance between fundamental scientific research and government 
intervention in the marketplace--is crucially important. The 
focus on biofuels is telling because it involves so many 
aspects of the question. Indeed, federal biofuels policy 
provides a morality tale of how things can go wrong when the 
right balance is not struck.
    Before delving into the problems, however, I want to 
emphasize the importance of maintaining a robust federal 
investment in research across all fields of study. Funding for 
science is crucial to maintaining American leadership and 
fostering innovation that leads to high-quality job growth. 
Federal support for university research in particular is 
crucial for training a new generation of Americans to fill 
those jobs.
    To summarize my written submission, here are some key 
points. First, protecting the climate from a worsening 
disruption due to excess CO2 in the atmosphere is 
now a top challenge for energy research and policy. But the 
choice of what technologies to deploy must be left to the 
marketplace, to industries and entrepreneurs who take risks 
with private money rather than rely on public funds. Policies 
to address nonmarket concerns such as CO2 should 
therefore be technology-neutral and well-informed by 
independent science.
    Moreover, the climate challenge should not be used as an 
excuse to pick winners through costly demonstration and 
deployment programs, subsidies, and technology mandates. 
Federal resources are best leveraged through fundamental R&D 
and technology-neutral regulation.
    Unfortunately, federal biofuels policy has overstepped 
these bounds. The result is not only wasted tax dollars but 
excess costs for consumers and harm to the environment. 
Biofuels are making CO2 emissions worse, and the 
renewable fuel standard has been damaging in that regard.
    Finally, it's time to face up to the fact that the federal 
push for advanced biofuels has failed. DOE and other agencies 
have supported bioenergy research demonstration and deployment 
for many decades and with billions of dollars. None of the 
promised cellulosic fuels have become commercially viable, even 
with subsidies amplified by mandates. In short, it's time to go 
back to basics on these issues, to revisit biofuel policies 
that science and economics now show to have been ill-premised.
    I realize that my work contradicts many long-standing 
assumptions about biofuels. Twenty years ago, I accepted the 
notion that biofuels were inherently carbon neutral, meaning 
that the CO2 emitted when they are burned does not 
count because it's taken from the air when crops are grown. In 
reality, however, all CO2 emissions increase the 
amount of CO2 in the atmosphere, regardless of where 
the carbon comes from. The correct question is whether 
feedstock production speeds up how quickly CO2 is 
removed from the air. That does not happen when productive land 
is used for biofuels instead of food or even just used for 
forest to sequester carbon.
    Last year, we published research to evaluate what actually 
happened as the RFS ramped up. We found that ethanol and 
biodiesel are not carbon-neutral. Their use provided no 
significant direct CO2 reduction. Once indirect 
impacts are considered, it turns out that biofuels have caused 
higher CO2 emissions than petroleum fuels.
    We do need to address emissions for motor fuel use, along 
with those from the power sector and other sources, but the 
best ways to do that are by improving vehicle efficiency, 
controlling emissions during oil production, and offsetting 
tailpipe CO2 emissions through reforestation. If 
biofuels policy were restricted to basic R&D, we would learn 
some things that help students build science and technology 
skills. Those are worthwhile outcomes even if the research does 
not yield successful products.
    Research is risky by nature. Not all of it bears fruit, and 
that's why the portfolio should be diverse. University research 
is broadly beneficial in that regard. In contrast to when 
federal funds are used for subsidies and demonstrations, the 
funds go a long way when shared with many schools to support 
students and young scientists.
    Thank you again, and I'll look forward to your questions.
    [The prepared statement of Dr. DeCicco follows:]
    
    
    
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    Chairman Biggs. Thank you, Dr. DeCicco.
    And now, Ms.--I'll recognize Ms. Skor for her five minutes 
to--presentation.

                  TESTIMONY OF MS. EMILY SKOR,

                    CHIEF EXECUTIVE OFFICER,

                         GROWTH ENERGY

    Ms. Skor. Thank you, Chairman Weber, Chairman Biggs, 
Ranking Members Johnson, Bonamici, and Veasey, and Members of 
the House Committee on Science, Space, and Technology. Thank 
you for the opportunity to discuss today the advancement in 
America's biofuels industry.
    My name is Emily Skor, and I am the CEO of Growth Energy. 
Growth Energy is America's leading biofuels trade association, 
representing 87 biorefineries and 83 companies in the biofuel 
supply chain. Our members produce fuel from grain, crop 
residues, algae, and woody biomass. In 2016 alone, our industry 
contributed more than $42.1 billion to the U.S. economy and 
supported almost 340,000 American jobs. And with stable and 
predictable policy, America's biofuels industry stands ready to 
deliver more biofuels that provide even greater environmental 
and human health benefits.
    The development of the ethanol industry is a shining 
success story where the public sector supports private 
innovation. Ours is a competitive thriving renewable energy 
industry that continues to produce more with less, including 
significant reductions in greenhouse gas emissions, water 
usage, and energy usage. Our production process has become more 
sustainable and more efficient and uses a wider range of 
biomass feedstocks.
    Today, ethanol is blended into 97 percent of our fuel 
supply, meeting more than ten percent of our motor fuel needs. 
Ethanol's naturally high octane enhances engine performance and 
increases fuel efficiency. As our country looks at ways to get 
more mileage from a gallon of fuel, high-octane fuels are a key 
component to that effort.
    The key to all this progress is the renewable fuel 
standard. Following human health in groundwater contamination 
concerns with petroleum-derived MTBE, Congress sought a 
renewable, affordable alternative to deliver octane into 
America's gas tanks. Knowing we do not have a free and open 
fuel marketplace, the RFS helps correct an imperfect market to 
allow competition.
    We cannot simply walk up to the pump and offer a higher-
quality product at a lower price and compete for customers. 
Instead, the gasoline point-of-sale is very much controlled by 
the oil industry through direct ownership or franchise 
contracts that block new market entrants. The private sector 
response to the RFS has been dramatic and impactful because the 
policies set forth a long-term predictable energy strategy to 
blend more renewable fuel into our fuel supply.
    In 2005, the United States produced 3.9 billion gallons of 
ethanol. This year, the industry is on pace to produce over 
15.6 billion gallons. America's biofuels industry has followed 
the policy signal from the RFS to produce more advanced and 
cellulosic biofuels. We at Growth Energy have three operating 
commercial cellulosic members--POET-DSM, DuPont, and Quad 
County--producing ethanol with dramatic greenhouse gas emission 
reductions. We have other members producing a diversity of 
fuels from a diversity of feedstocks. The RFS is driving this 
innovation.
    Congress always intended for consumers to be able to buy 
higher ethanol blends at the pump. In 2011, the EPA approved 
the sale of E15 for all 2001 and newer vehicles. Since that 
time, Growth Energy has been working with fuel retailers to 
provide consumers access to higher levels of biofuels such as 
E15 and E85. Today, these higher ethanol blends are available 
at thousands of gas stations around the country, and they are 
saving consumers between 5 and 50 or more cents per gallon when 
compared to non-ethanol fuels.
    I would be remiss if I did not mention a key policy hurdle 
with making E15 available across the United States year-round. 
In 1990, Congress limited evaporative emissions or Reid vapor 
pressure as part of a larger effort to combat smog during the 
summer fueling season. This law also provided ethanol-blended 
fuels an allowance because these fuels lower tailpipe and 
particular matter emissions. When E15 was approved as a new 
fuel, EPA did not extend that allowance. This means that 9 in 
10 drivers can only legally purchase E15 for 8-1/2 months of 
the year. There's a bill pending before the House, H.R. 1311, 
that would fix this problem.
    The American biofuels industry stands ready to move America 
forward. With a stable policy and access to drivers, we believe 
we can deliver more low-carbon, low-cost, high-performing, 
sustainable vehicle fuel solutions. This will save consumers 
money at the pump, increase vehicle performance, and improve 
our environment.
    Thank you, and I'd be happy to take any questions.
    [The prepared statement of Ms. Skor follows:]
    
    
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    Chairman Biggs. Thank you, Ms. Skor.
    And now, I'll recognize Mr. Loris for five minutes for his 
opening statement.

                TESTIMONY OF MR. NICOLAS LORIS,

           HERBERT AND JOYCE MORGAN RESEARCH FELLOW,

        INSTITUTE FOR ECONOMIC FREEDOM AND OPPORTUNITY,

                      HERITAGE FOUNDATION

    Mr. Loris. Thank you. Chairman Biggs, Chairman Weber, 
Ranking Member Veasey, Ranking Member Bonamici, and 
distinguished Members of the Subcommittees, thank you for this 
opportunity to discuss U.S. biofuels policy. The views I 
express in this testimony are my own and should not be 
construed as representing any official position of the Heritage 
Foundation.
    To justify biofuels programs, policymakers have promised 
reduced dependence on foreign oil, a new source of cleaner 
energy to lower gas prices, and an improved environment. None 
of this has materialized in any substantial way. More 
fundamental than that, the biofuels mandate and subsidies 
reveal the inability of the federal government to centrally 
plan energy markets and the unintended consequences that occur 
when doing so. No matter how brilliant or well-informed, 
politicians cannot predict the future of energy supplies and 
demand. It's difficult enough to know where gas prices will be 
six months from now, let alone projecting nearly two decades 
into the future.
    With regard to the RFS, blend wall concerns with corn-based 
ethanol and Congress grossly over predicting the commercial 
viability of cellulosic ethanol demonstrate why the government 
should not set production quotas in the first place. And the 
RFS is far from the only mechanism that the federal government 
has used it to prop up the biofuels markets. Since 1980, 
federal taxpayers have spent more than $57 billion on ethanol 
subsidies. We've imposed tariffs on cheaper imported ethanol, 
provided loan guarantees for cellulosic ethanol, and provide a 
number of taxpayer subsidies on biofuels infrastructure through 
the energy title in the farm bill.
    These policies concentrate benefits to a select few and 
disburse the costs among the rest of us. And those costs are 
substantial as we pay tens of billions of dollars more in 
higher food and gas prices each year. These policies harm low-
income families who spend a disproportionately higher 
percentage of their budget on these goods.
    While a select group of producers has certainly benefited, 
we can't ignore the groups in rural America that have been hurt 
by these policies and these subsidies as well. The federal 
government has supported corn and soybean growers at the 
expense of livestock and other crop producers. Some rural towns 
bet big on biofuels and lost big. A recent Utah State 
University study details how preferential treatment for ethanol 
shifted the business risk from companies to local communities 
where cities and towns would offer incentives that in some 
instances lasted multiple decades or would front the cost to 
build out ethanol infrastructure projects. When these projects 
failed and went bankrupt, state and local communities were 
stuck with the tab.
    Furthermore, the mandate and complementary subsidies have 
not contributed to any meaningful reductions in oil 
consumption. Biofuels contributed a mere five percent of the 
U.S. transportation fuel market in 2016. By comparison, natural 
gas provided four percent with no such mandate in place.
    Biofuels also have unintended environmental impacts. Even 
the Environmental Protection Agency acknowledges that the 
increases in soybean production as a result of the mandate can 
cause adverse effects to water quality, ecosystems, and 
habitats while increasing criterion pollutants like sulfur 
dioxide.
    Furthermore, the alleged climate benefit from the RFS and 
biofuels policy is dubious at best. Even under the assumption 
that switching from biofuels--switching from oil to biofuels 
significantly reduces greenhouse gas emissions, which is a very 
generous assumption, the impact on global temperatures would be 
barely detectable. Broadly speaking, the mandate and subsidies 
provide valuable lessons about the problems when the federal 
government intervenes in energy markets. Bad policies that 
reward preferential treatment remain in place because the 
supposedly political importance trumps economic viability.
    In Washington, it's rare to have a diverse mix of 
individuals and groups such as environmental organizations, 
world hunger activists, economists, free-market think tanks, 
and many in the agricultural community voicing their concerns 
over one single policy, and yet these policies remain in place 
to appease entrenched special interests.
    But the issue is not with biofuels themselves but rather a 
set of policies and programs that pick winners and losers. This 
holds not true just for biofuels but for all energy sources. 
There's an enormous profit incentive that already exists for 
fuel producers that can benefit from a competitive industry 
without the aid of taxpayer money or a government-imposed 
mandate.
    American motorists purchased nearly 400 million gallons of 
gasoline per day in 2016. Globally, the transportation fuel 
market is a multitrillion dollar opportunity for competitive 
industries to meet the world's energy demands. Congress should 
recognize the economic and environmental costs of biofuels 
policy and repeal the RFS and all biofuels subsidies. Congress 
should do so as part of fundamental reform that eliminates 
subsidies for all energy sources and technologies.
    Now, there are ways in which Congress can drive alternative 
fuel competition such as implementing tax reform that allows 
for immediate expensing for all capital investments and using 
the Department of Energy's national labs as catalysts for 
innovation. In this scenario, the DOE should conduct the 
research to meet government objectives that are not being done 
by the private sector and enable a system that allows the 
private sector using their own money to tap into that research 
for commercial purposes. While this already occurs on some 
level and with some success, private sector access to the labs' 
assets and labs' employees and the ability to turn the research 
into market applications are stifled by cultural rigidity, 
funding issues, as well as complex and overly restrictive 
conflict-of-interest and intellectual-property-rights 
regulations. Enacting such reforms will empower the private 
sector and innovative companies to drive fuel competition and 
choice.
    Thank you, and I look forward to your questions.
    [The prepared statement of Mr. Loris follows:]
    
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    Chairman Biggs. I thank each of you for your testimony, and 
I recognize myself for five minutes to ask questions.
    And I want to begin with you, Dr. DeCicco. In your 
statement you mentioned that once indirect impacts are 
considered, it turns out biofuels have caused higher CO2 
emissions, and I was wondering if you can tell us what some of 
those indirect causes are producing those indirect impacts.
    Dr. DeCicco. Sure, Mr. Chairman. The heart of the problem 
is really three issues, three types of indirect issues that 
result in higher emissions for biofuels. One is the basic fact 
that all of the biofuel production, statistically speaking, 
when you look at the volumes, is really based on feedstocks, 
crops, primarily corn and soybeans that are harvested from 
existing land. In fact, Congress--part of the criteria to 
qualify for feedstock on the RFS is that, you know, feedstocks 
that come from existing land.
    Now, that was essentially a well-intended provision, but 
just because we remove, say, nearly on a net basis after 
counting coproducts about 30 percent of our corn and the 
calories in that corn from the food market to make fuel doesn't 
mean that the country has consumed 30 percent less calories. I 
think we know that. It has to get made up somewhere else.
    So, that leads to the next effect of concern, and that's 
land-use change. And that happens both in the United States and 
it's been documented by satellite imagery where cropland has 
expanded into other lands, particularly grasslands in the north 
central region, prairie States. That--when you convert that 
land, it releases enormous amounts of carbon that was locked up 
in those lands.
    And then you have the international commodity market 
effects where, to compensate for the biofuel demand for starch, 
for corn grain, and for soybean, you end up having to make that 
up in international markets, and you have more crops planted on 
the frontier, resulting in deforestation, amplifying 
deforestation in the Amazon and other carbon-rich areas that 
creates an enormous release of CO2.
    Then, finally, the third indirect impact is that, yes, the 
use of biofuels does displace some petroleum fuels, so you 
reduce petroleum demand; that's true. That has a slight, you 
know, marginal depressing effect on the price of petroleum 
products that then induces greater petroleum product 
consumption elsewhere. That's been also a well-documented 
indirect effect that, by itself, can erase up to half of the 
alleged CO2 emission benefit of biofuels, but since 
I believe there's no benefit to begin with, that's just 
additional excess emissions.
    Chairman Biggs. Thank you. Dr. Gilna, what's the primary 
difference between conventional biofuels produced primarily 
from corn and the advanced biofuels from nonfood sources that 
you're researching at Oak Ridge?
    Dr. Gilna. Well, the primary difference is its source. As I 
described earlier, our goal and hopes have been to be able to 
generate initially biofuels such as ethanol but moving to 
beyond that to other fuels, higher-order hydrocarbons from 
plant sources again that do not compete with food and in fact 
use different non-marginal lands that cannot normally be 
ascribed or used for food, food production. So, for example, 
we've talked about and published on crops such as switchgrass, 
rapidly growing trees such as populus as a new bioenergy 
feedstock that allows us to generate fuels, initially, ethanol 
but now more advanced fuels such as isobutanol. We use the term 
often drop-in fuels. These are fuels that can use the existing 
infrastructure, the pump structure and the piping structure. 
So, essentially, the directions that we're going is in advanced 
fuels that use the existing system from nonfood crops.
    Chairman Biggs. Thank you.
    And then my last question, as I'm almost out of time, is 
back to you, Dr. DeCicco. You mentioned biofuel policies 
restricted to basic R&D. Where do you draw the line? How do we 
make that a bright-line boundary?
    Dr. DeCicco. Sure. I think the type of basic R&D needed 
here is really on sort of the very fundamental mechanisms 
related to, you know, the manipulation, utilization of organic 
substances, so some of the very fundamental work that Dr. Gilna 
has himself done for many years looking at, you know, genetic 
biochemistry-related things, so stuff that is really enabling 
and could be potentially used for multiple purposes.
    The other really important area of fundamental research in 
this regard has to do with things that essentially help plants, 
help natural systems pull CO2 out of the air more 
rapidly because, as I mentioned, if there's to be any 
mitigation effect at all, it doesn't come downstream when you 
substitute the molecules. It comes upstream by mechanisms that 
increase the rate at which you pull CO2 out of the 
air and then do something with it, which need not necessarily 
mean turning it into fuel. It could just mean sequestering it. 
So, fundamental research essentially helps plants sequester, 
build, rebuild soil carbon and things like that. I think some 
of that work also goes on at Oak Ridge perhaps in another 
division.
    So, there are certain really fundamental biological 
sciences work that is crucially important for many reasons. 
Personally, I draw the line right after that. I think--I don't 
think the petroleum industry needs help figuring out how to 
synthesize fuel molecules. They will figure out how to make 
fuel molecules out of whatever feedstock is economically 
possible. That's their core competency.
    Some of the earliest work on this cellulosic thing, which 
is over 40 years old, was started by Chevron in the '70s and 
other oil companies. They've invested in that. I don't think 
there's a need for federal investment in an area where, you 
know, the global oil industry has its huge core competency in 
chemical engineering and related things.
    Chairman Biggs. Thank you.
    And now, I recognize the gentlewoman from Oregon, Ms. 
Bonamici.
    Ms. Bonamici. Thank you very much, Mr. Chairman. And, Ms. 
Skor, I want to follow up on the question that the Chairman was 
asking Dr. Gilna. In your testimony, you mentioned that 
advanced biofuels have the potential to reduce greenhouse gas 
emissions significantly. It could be up to 100 percent or more 
over gasoline. Can you please elaborate on why cellulosic 
biofuels are particularly advantageous, especially to reduce 
greenhouse gas emissions?
    And then also, when comparing the lifecycles of fuels side 
by side, how would the lifecycle assessments of gasoline 
compare to the advanced cellulosic fuel that's becoming more 
readily available?
    Ms. Skor. To your question on the value of the cellulosic 
biofuel, yes, Argonne National Labs recently finished a study 
showing that when you're using cellulosic biofuel, you can 
reduce greenhouse gas emissions up to 100 percent depending on 
the type of feedstock that you're using. And so, you know, to 
have that--the research from other institutions, as well as 
demonstrating that there is a phenomenal increase in the amount 
of greenhouse gas emissions reduction that you can achieve when 
you go from the first generation to the second generation of 
biofuel.
    And with regard to the distinction between the lifecycle of 
the two, I may--as a nonscientist, I may differ a bit more to 
Dr. Gilna and others in terms of that to answer that question, 
but I can say that when you look at the totality of research 
out there and you have to look at independent government 
research, what is coming out of USDA, Department of Energy, 
EPA, our national labs and our universities, there's a wide 
body of consensus from that scientific community when you look 
at a lifecycle analysis of cornstarch ethanol that is not only 
good for the environment, it's great for the environment. And 
depending on the study, that will find--the results are that--
anywhere from a 30 to 60 percent reduction in greenhouse gas 
emissions with cornstarch. And as I said earlier, cellulosic 
you can get up to a carbon sink.
    Ms. Bonamici. Dr. Gilna, can you answer the question about 
when comparing lifecycles of fuels side by side how would 
lifecycle assessment of gasoline compare to advanced cellulosic 
fuel?
    Dr. Gilna. I must confess I'm the pointy-headed scientist 
in this room, and so my world is more based on the--in the 
fundamental science, science research, and I would defer to my 
colleagues----
    Ms. Bonamici. Thank you.
    Dr. Gilna. --who work on that.
    Ms. Bonamici. Thank you. Ms. Skor, in his testimony, Mr. 
Loris argues that when the free market operates, technologies 
flourish, leading to new job opportunities and economic growth. 
And he's suggesting that the renewable fuel standard should be 
repealed to encourage a healthier free market. Can you comment 
about why the fuels market is not a free market and whether 
this--the current renewable fuel standard is sufficient to 
level the playing field, and also importantly, what might 
happen to rural economies if the RFS was repealed?
    Mr. Loris. Wouldn't it be wonderful if our transportation 
fuel sector were a free market? Unfortunately, it is not. We 
are in a situation if you have a renewable source of energy 
that's higher quality, lower cost, we have to knock on the door 
to our competitor and ask our competitor to be our customer in 
order to access the consumer. And the consumer needs that to 
happen in order to have more choices at the pump to find and 
select the fuel that is best for their engine needs.
    And so the renewable fuel standard doesn't entirely address 
the problems of this broken system, but it helps by saying that 
we have goals as a country. We will be blending more biofuels 
that introduces a bit more competition into the marketplace.
    I will say, however, there still exists fuel policies and 
rules that date back to a time before you had alternative fuels 
like ethanol and do advantage the oil industry. So again, it 
starts to correct but does not fully correct that market. I 
would say one opportunity that is very much in the spirit of 
free market is lifting Reid vapor pressure restrictions on E15. 
That simply says consumers, you have the ability to purchase a 
currently legal fuel all months of the year and not 8-1/2 
months.
    Ms. Bonamici. Thank you. And I know there was some concern 
raised about E15 and--it was a couple years ago in a hearing 
here that a lot of vehicles couldn't accommodate it. How old 
does the car have to be to not accommodate it?
    Ms. Skor. Well, let me start by saying E15 is the most 
tested fuel used in the country. EPA approved it for use in 
vehicles 2001 and newer. That's 9 out of 10 cars on the road. 
It has been used by--consumers have driven more than 1 billion 
miles on E15, and they are not registering complaints in terms 
of any fuel-related concerns on their engine performance.
    Ms. Bonamici. And also, you know, let's say there's a major 
event that disrupts the global oil supply. What could an 
increased supply of domestically produced biofuels do to 
insulate the United States from the consequences of that kind 
of event?
    Ms. Skor. One of the goals of the RFS is greater energy 
security, and so for us to have the ability to produce home-
grown renewable fuel does protect us from uncontrollable events 
in the global marketplace, yes.
    Ms. Bonamici. Mr. Chairman, you did go two minutes over. I 
have one more question.
    Chairman Biggs. Actually, I completed my question with 
about 15 seconds to go and the answer took two and a half 
minutes, so your time is expired. Thank you.
    I'll go to the gentleman from Texas, Mr. Weber.
    Mr. Weber. Thank you, Mr. Chairman.
    Mr. Loris, in your testimony you talk about this, 
``chicken-and-egg,'' approach in energy innovation where 
supporters of government mandates and subsidies argue that if 
we want consumers to buy new products, the government should 
subsidize the infrastructure to deliver that product and then 
mandate its sale.
    Now, let me just parenthetically say we want to be careful 
because the next thing you know the government will be 
mandating we all have to buy some form of health insurance. I'm 
just saying. Does any of this government meddling help that new 
product--in this case biofuels--become more cost-effective, 
efficient, or competitive? I won't ask you to opine on the 
insurance market.
    Mr. Loris. Yes, I appreciate that. In the long run, no; it 
promotes technological stagnation. And markets overcome 
chicken-and-egg problems all the time. As I said, it wasn't all 
that long ago in terms of historical senses where people didn't 
have access to cell phones and you need cell phone towers to 
have access to cell phones and use them appropriately. The 
market solved that chicken-and-egg problem where cell phones 
are so rapid and expansive that even homeless people have them 
now.
    So, I don't know what technological innovations will come 
from the government's investing in these things. It may result 
in a few refueling stations, but that shouldn't be the role of 
the government. You have Tesla, who's investing a lot in 
refueling stations for electric vehicles using their own money 
with some subsidies from State Governments, but they should be 
funding those refueling stations on their own, too, just as 
natural gas vehicles should be doing the same for their 
infrastructure. That's not the role of the federal government 
to solve this chicken-and-egg problem when markets do it all 
the time.
    Mr. Weber. You don't want the federal government setting up 
refueling exchanges?
    Mr. Loris. I'll pass.
    Mr. Weber. Okay. I got it. A smart man. So what you're 
saying is that the market itself, in the name of competition, 
manufacturers will produce a more efficient product, a more 
cost-effective product on their own, and if the government 
mandates and gets involved and subsidizes, then as I said in my 
opening statement, they have a habit of picking winners and 
losers, unfortunately, more losers than winners.
    Mr. Loris. That's right, and it creates a dependence on 
those programs. And when these companies are dependent on 
targeted tax credits or loan guarantees, they fail to recognize 
the true price point at which they're cost competitive with 
other fuels, and so that's absolutely right.
    Mr. Weber. Sure. You bet you.
    Is it DeCicco?
    Dr. DeCicco. That works.
    Mr. Weber. That works? DeCicco, okay. Okay. Well, I think 
I'm going to come to you here in a little bit, but I just want 
to make sure I have your name right.
    Dr. Gilna, let me jump over to you real quick. In your 
prepared testimony, you mentioned the history of DOE biological 
sciences. It's my understanding that much of Oak Ridge National 
Lab's expertise in biological systems--and you've said this as 
much--came from early work related to the Manhattan Project. 
And I think it's interesting, you know, ironically so, that 
much of our discussion has nothing to do with nuclear fuel. It 
was based on national security. And you could say the nucleus 
of that--of this project developed from the Manhattan Project.
    So, can you share some of the background on that expertise, 
how it got developed, how it's helping us today?
    Dr. Gilna. Well, first, I may not have been clear. I think 
the point--one point to be made here is that there is a history 
that goes all the way back of biology research at the 
Department of Energy that stemmed from the scientific needs----
    Mr. Weber. Give me a year for that.
    Dr. Gilna. So, back 50 years at least.
    Mr. Weber. Yes.
    Dr. Gilna. So, there's been biology research in both ERDA 
and the Atomic Energy Commission dating all the way back to the 
early days of Los Alamos. Where--what that has led to has been 
now using those capabilities and that knowledge now focused on 
genomic aspects of microbial science, of energy science, and 
plant science in particular. So it's a long-standing history 
that really has--is now being applied to energy issues by and 
large.
    Mr. Weber. Thank you.
    Dr. DeCicco, you said in your testimony some harsh--you had 
harsh words for DOE Office of Energy Efficiency and Renewable 
Energy programs, EERE. Quote, ``DOE and other agencies have 
supported bioenergy research, demonstration, and deployment in 
many decades and with billions of dollars. None of the promised 
cellulosic fuels have become commercially viable, even with 
subsidies.'' Why do you think the programs in EERE have become 
so unsuccessful? You've got 30 seconds.
    Dr. DeCicco. Well, they've simply failed to deliver on 
promises that we've now heard for decades. I mean, with all due 
respect to, you know, Dr. Gilna, I heard those same things 
that--you know, 25 years ago when I began focusing on these 
issues. It's a difficult problem, that's true, but at some 
point you have to recognize that we should move on to other 
areas of research that might be more promising.
    Mr. Weber. Mr. Chairman, I yield back.
    Chairman Biggs. Thank you.
    I recognize the gentleman from Texas, Mr. Veasey.
    Mr. Veasey. Thank you, Mr. Chairman.
    I wanted to ask Dr. Gilna a question. The Trump 
Administration has proposed to gut DOE research into bioenergy 
in its fiscal year 2018 budget request. Specifically, the DOE 
Office of Science's bioenergy research centers would see their 
annual budget cut by about 60 percent and the Bioenergy 
Technology Office would be cut by about 72 percent. Also, I 
think, which is equally concerning, is the House appropriation 
bills that come before the chamber later this week include 
similar severe cuts, and I wanted to know if you could describe 
the consequences of the proposed cuts in the budget request 
would have on the bioenergy research centers if enacted? And 
please be as specific as possible.
    Dr. Gilna. Well, firstly, I should be sure to thank the 
Members of Congress for the fact that the BRC centers are in 
the appropriations this year. I think that's important and 
important to continue this work. I think to help calibrate all 
of the centers that have been selected for funding based on the 
DOE request for proposals came in at around $25 million a year, 
again, by design. So, at this point in time the effect of the 
proposed budget is that the centers are essentially reduced by 
25 percent--50 percent, excuse me.
    In essence, what this means simply is that some aspects of 
the work will simply not get done. The science will focus on 
specific issues but not the broad breadth of work that was 
called on from the centers. And I think people and essentially 
partners that I described earlier will get dropped.
    I think the bigger issue will be if you think of the ten 
years of activity and a thousand scientists, we've reached the 
sort of critical mass of scientific production in this country, 
and I think that the potential consequence of this drop is a 
stutter step in that productivity.
    Mr. Veasey. More broadly, what would the proposed cuts do 
to federally funded bioresearch centers and the progress that 
we've made up to this point?
    Dr. Gilna. Well, essentially, we would--we talked--I talked 
earlier--and I can speak more specifically to the Oak Ridge 
Center, so we talked about continuing extensive research in two 
model cellulosic crops, either populus--or poplar trees and 
switchgrass as a grass. And, in essence, I think in order to 
fit to the lower constraints, we would essentially diminish if 
not indeed rule out at least one of those crops, switchgrass, 
which would drop some partners as well.
    Mr. Veasey. What about--you know, one of the things that 
you hear any time we get ready to have this debate is that if 
the federal government is not helping out in this area, if 
they're not--if funding is cut from the federal government, 
that there's just going to be this avalanche of money that's 
going to come in from the private sector, and America will keep 
its competitive edge because the private sector will want to 
just vigorously jump in and just--and put money into these 
projects. What--I mean, what is your opinion on the private 
sector funding research that is proposed for elimination, as 
some have suggested today?
    Dr. Gilna. I don't--I didn't include this with my testimony 
and I should have, but we have produced a single graph that 
depicts all the logos from the different companies that have 
come to work with us. We call this our NASCAR slide because 
there's at least 100 logos on that slide. And in all those 
cases these represent companies that have come to us, the 
centers, for help, for increased knowledge, as well as 
obviously to license products that they can take forward. So, 
you know, if the issue is would industry simply do this itself, 
I think the evidence suggests no.
    Mr. Veasey. Thank you very much. And I wanted to ask a 
quick question to Mr. Loris. In your testimony, you stated 
unequivocally that, ``Activities with the purpose of 
commercialization, regardless of where they lie on the 
technological development spectrum, are not legitimate 
functions of the federal government.'' Nowhere in that entire 
section that criticizes DOE's R&D investment do you cite any 
data, study, or report to back up that statement. To me it 
sounds like it's very political and out of touch with reality, 
and I wanted to know if you had any actual data to support that 
statement, that certain activities are not legitimate functions 
of the federal government, and not any anecdotes or political 
theories but just some real data to support what is a very 
broad statement.
    Mr. Loris. Well, I don't think the federal government 
should be involved in trying to predict what our future energy 
sources should be, so it is looking at that--whether or not it 
is a legitimate function of the federal government. I don't 
know what will be our energy future, whether it's fusion, 
whether it's batteries, whether it's biofuels. The market will 
sort that out. We've had a number of projects in which the 
Department of Energy provided loan guarantees to solar 
companies, to carbon capture and sequestration plants that have 
failed miserably on the backs of the taxpayers, and so I think 
there's plenty of evidence in which we've lost taxpayer dollars 
trying to predict what those technology futures will be.
    And again, I don't think it's the role of the federal 
government to try to lower the cost to make these technologies 
competitive in the marketplace. There was DOE's SunShot 
Initiative which said it was going to take solar from the basic 
research level and make it commercially viable. That is the 
role of the private sector. It's not the role of the federal 
government.
    Mr. Veasey. Thank you, Mr. Chairman. I yield back.
    Chairman Biggs. Thank you, Mr. Veasey.
    The Chair recognizes Mr. Dunn, the gentleman from Florida.
    Mr. Dunn. Thank you very much, Mr. Chairman, and thank the 
panelists for being here as well. It's always fun to hear from 
so many very learned people.
    Dr. DeCicco, the--there's a lot of timber in the 2nd 
Congressional District of Florida. It's the largest 
agricultural product that we have. It's a very agricultural 
district. It's a huge driver of our economy. We have about 4.5 
million acres of timber under cultivation. The pulp and paper 
manufacturers in Florida's 2nd District also generate energy 
from their biomass, so I was going to ask you a biomass 
question. Is the minimally produced woody biomass that is 
burned to generate the bioenergy--and most of that is just 
scrap that they're generating themselves--to power these pulp 
and paper mills closer to carbon neutral than other renewables 
you've studied?
    Dr. DeCicco. Yes, it is. In that case you have something, 
you know, pulp and paper, black liquor, things like that that 
are byproducts that might otherwise be dumped and then just 
decay. So, the reason that those are beneficial typically is 
because--take, you know, some of these residues and black 
liquor is concentrated--if that was just dumped, it would 
eventually and in fairly short order break down, and that means 
it gets gobbled up by organisms, and they exhale the CO2 
and that CO2 goes into the air. So, by taking those 
things that would otherwise decay and then using them to make 
energy instead of, say, natural gas or some other fossil fuel, 
you have essentially reduced emissions by reducing the 
emissions of decay. You've not changed how much emissions come 
out when you burn it, but you've avoided those emissions from 
those waste products just kind of going back into the 
atmosphere through natural processes. So, that is an example of 
a potentially and likely beneficial bioenergy process.
    Mr. Dunn. All right. Let me follow on if I may. So you--we 
talked about the DOE's research portfolio, and over time, that 
has shifted towards these advanced biofuels, the drop-ins and 
whatnot. And I mean, I guess I'm wondering do you think that 
these advanced new biofuels will actually become commercially 
competitive with petroleum-based products?
    Dr. DeCicco. I see no evidence for that. I mean, again, 
that promise has been made in one form or another for decades. 
That was the premise--I mean, it was, you know, President Bush 
who, in his 2007--January 2007 State of the Union got up and 
talked about cellulosic ethanol, talked about switchgrass as a 
source of fuel, and the mandate that, you know--for the 
cellulosic products I did a back-of-the-envelope calculation 
based on EPA's most recent rule, and this year, the amount of 
cellulosic fuel is only three percent of what was targeted for 
the RFS, and most of that three percent is biogas. And again, 
when--he got up and talked about cellulosic ethanol. We're 
talking about a liquid fuel that everybody could use in all 
their cars. I don't think he was talking--you know, it was not 
sold to the American people to, you know, pardon the, you know, 
informality here to--that we'd be running our cars on cow 
farts. I mean, most of the cellulosic has been gaseous at this 
point.
    So, it's just, you know, pretty consistently failed to 
deliver. Fundamental research is needed. As I said, I think the 
very fundamental work is legitimate, but then trying to turn, 
you know, stuff into molecules, I don't think the federal 
government needs to keep investing in that.
    Mr. Dunn. So I wasn't going to wander into that area, the 
biogas, but we actually have one of the largest dairies in the 
country in the district, and they have 14,000 dairy cows, and 
they are recycling. They have this biogas plant that actually 
generates more energy than they can use on the farm, and I 
can't remember----
    Dr. DeCicco. That's----
    Mr. Dunn. --I think it was like two or four----
    Dr. DeCicco. That's--I'm not saying that----
    Mr. Dunn. --two to four megawatts of energy on this thing. 
And the guy is a real entrepreneur. He's really making this 
thing go, and it's exciting, if a little bit odorous to be 
there but----
    Dr. DeCicco. Sure. No, I'm a big fan of biogas. I think 
it's a great thing. I just don't think that that is what, you 
know, we need a mandate for, you know----
    Mr. Dunn. So, I think----
    Dr. DeCicco. --billions of gallons of fuel----
    Mr. Dunn. --we have 15 seconds left, and I just want to say 
I've seen--I was not a big fan of biogas, did not believe in it 
until I got to this farm and they do it. They do it on their 
own dime. There's no subsidies, there's no tax breaks, and he's 
running all of his farm--several farms on either side of him as 
well.
    I yield back, Mr. Chair.
    Chairman Biggs. Thank you.
    The Chair recognizes the gentleman from New York, Mr. 
Tonko.
    Mr. Tonko. Thank you, Mr. Chair.
    I come into this hearing without many predetermined 
conclusions. I do not have any major corn or oil interests in 
my district, so I appreciate all of our witnesses taking the 
time to better educate us today.
    I do have a few principles on when it comes to thinking 
about biofuels and their use. First, I care deeply about 
fighting climate change, and we should consider how investment 
in biofuels are indeed--can impact greenhouse gas emissions.
    Secondly, regardless of the blend of our liquid fuels, our 
vehicles should use those resources as efficiently as possible 
and always keeping in mind that they cannot be a substitute for 
our vehicle fuel efficiency standards.
    And finally, in the long-term, I truly believe we must 
promote greater electrification of the transportation sector. 
It is necessary and probably inevitable, but I also recognize 
we are decades away from that becoming a widespread reality. 
But even with greater electrification, aircraft and ships and 
possibly heavy trucks will still require liquid fuels. It is 
critical that we continue to develop a domestic advanced 
biofuels industry. I understand the industry has not developed 
as predicted, but Congress should not undercut or 
disincentivize that industry's future development.
    I also remain concerned about major cuts that the Trump 
Administration has proposed, especially how these cuts will 
affect the world-class research happening at our national labs. 
No matter our individual thoughts on this specific issue, I 
hope my colleagues on both sides of the aisle can come together 
to agree that, as a nation, we must invest in research. To not 
do so would be costly in terms of innovation, in terms of job 
growth and our future workforce.
    With that being said, Ms. Skor, what have been the biggest 
factors in holding back development of advanced and cellulosic 
biofuels?
    Ms. Skor. Thank you. The biggest factor has been a lack of 
stable policy guiding investors, guiding innovation. If you 
look at the EPA's implementation of the renewable fuel 
standard, it took three years to figure out the rules of the 
road. We then had an economic recession. And then in 2014 to 
2016 for three years the EPA was not coming out with blending 
targets. And as a result, the--that had a very chilling effect. 
As a country, we lost more than $20 billion in investment and 
innovation during that time frame because the signal the 
government was giving to investors was we will turn back the 
clocks on renewable fuels.
    Fortunately, we've gotten back on track. The blending 
targets are--have been in 2017 and proposed 2018 more in line 
with Congressional intent, and you are seeing an infusion in 
the private sector now into the investment and the technology 
and innovation.
    So having said that, we've only been working on cellulosic 
for ten years. The government started investing in fracking 
technology and R&D back--as far back as 1975, and that took 30 
years to get to the commercial point with that technology. So, 
I would say that we are very much at commercial scale with 
cellulosic. We aren't as advanced as we'd like to be, but we 
are making progress.
    Mr. Tonko. Thank you. And would additional federal research 
monies help open pathways or lower costs for more feedstocks to 
become viable alternatives to corn ethanol?
    Ms. Skor. I think Dr. Gilna very beautifully articulated 
that, yes. And I would say, as a blanket statement, if our goal 
is energy innovation, energy diversity, energy dominance, 
energy stability, any of those goals require both public and 
private investment and collaboration. We have, as an industry, 
benefited from government support and R&D throughout the 
innovation spectrum and would continue to do so, yes.
    Mr. Tonko. Thank you. And, Dr. Gilna, one of Mr. Loris' 
criticisms of the DOE national laboratories is that they need 
to transform in order to, I quote, ``engage more with the 
private sector.'' Mr. Loris--and the Heritage Foundation also 
strongly advocate eliminating any research that they do not 
consider to be either basic or early-stage research. These two 
criticisms seem to contradict each other. Based on your 
experience, on what types of activities is the private sector 
most interested in collaborating with the national 
laboratories?
    Mr. Loris. Based on my experience, the most productive and 
valuable experience is when industry and the labs work together 
to solve problems in a collaborative fashion. Most often, it is 
recognition on the part of industry that a problem in the 
pipeline is basic research-based. And so coming to use the 
capabilities and knowledge base of universities and the 
national labs is the best form of synergy that can help solve 
industry's problems.
    Mr. Tonko. Thank you. And----
    Chairman Biggs. Thank you, Mr. Tonko. Your time is expired. 
Thank you.
    The Chair recognizes Mr. LaHood from Illinois.
    Mr. LaHood. Thank you, Mr. Chairman.
    And I want to thank the witnesses for being here today, for 
your valuable testimony on this debate.
    And we've talked here today about the role of the federal 
government on this issue, and I think it's important to 
remember the genesis of the current RFS policy was put in place 
under the George W. Bush Administration under a Department of 
Energy led by Dr. Samuel Bodman, who was no shrinking violet 
when it came to energy policy and putting this forth. And while 
it may not be perfect, it has been a policy that, again, going 
back and looking at it, is one that was, you know, put in place 
with valid reasons for it.
    And as someone that represents a district that's fairly 
rural, a lot of agriculture there, I look at the RFS and I see 
the real results of biofuels: innovation in a district like 
mine, also improving the environment, creating lots of jobs in 
rural America and driving fuel efficiency.
    And we've heard a lot today and competing studies going 
back and forth on different initiatives and whether they've 
worked and of agro-companies benefiting specifically from this. 
I could just tell you, in a district like mine, rural 
communities, local jobs have been enhanced by ethanol and 
biofuels. We have the largest dry mill ethanol plant in the 
world in my district owned by a local family, all local jobs, 
all local businesses, not some carveout for a big company. And 
so, I also see the technology and the innovation that has gone 
in there in terms of constantly improving and modernizing this 
technology, and there's been real effects of that that have 
been beneficial to folks I think throughout, you know, the 
middle part of the country.
    Ms. Skor, let me ask you a little bit about the RFS. A lot 
of this is implementation through the EPA, and I know you work 
with them on that. Can you talk a little bit about the problems 
in the past and the future--or I guess looking at the future on 
how--what EPA does impacts the RFS in terms of the biofuels 
industry?
    Ms. Skor. Yes, the EPA administers the RFS, and so the way 
in which they do that, being timely and being genuine and true 
to Congressional intent is mission critical for our ability to 
make the RFS successful, as envisioned by Congress. And some of 
the challenges in the implementation side that I talked about a 
bit before really go back to EPA's delays and coming out with 
targets, blending targets on time, consistent with 
Congressional intent in a way that gives certainty and 
stability to the marketplace because private sector will 
respond to the direction and the tone set forth by the Agency.
    We've had several conversations with this Administration. 
Administrator Pruitt has consistently pledged to come out on 
time and comply with Congressional intent, and that's very 
encouraging news for us to hear that because that's the most 
important thing EPA can do to help make the renewable fuel 
standard as successful as possible.
    Mr. LaHood. And when you look at the rollback of the RFS in 
2014, 2015 and '16 in the new Administration, has the biofuels 
industry seen any improvement with the implementation of the 
RFS?
    Ms. Skor. The 2018 proposed RBOs were the first real test 
of this Administration's pledged support for biofuels, and 
we're encouraged at the blending targets, $15 billion for 
conventional corn, so yes, that's very encouraging to see that. 
We want to have greater conversation on some of the advanced 
and cellulosic target numbers and better understand. Those 
numbers are below 2017. We think the market is moving in a much 
more forward, positive direction, and so that's a conversation 
we'll have in the weeks and months ahead.
    Mr. LaHood. And can you give us an update on where E15 
sales currently are and what kind of impact it's making on 
consumers at the pump?
    Ms. Skor. There's been discussion this morning about 
picking winners and losers in the marketplace, and I think the 
goal for all of us is that the consumer picks the winner and 
the loser. And what you are seeing with the E15 experience 
that's now sold in 29 States is that when consumers actually 
have the chance to have greater choices at the pump, they are 
exercising that and they are reaching for E15 because they see 
the benefits to their pocketbook. They save 5 to 10 cents a 
gallon, the benefits to the environment and to their community.
    Mr. LaHood. Thank you. Those are all my questions, Mr. 
Chairman.
    Chairman Biggs. Thank you.
    The Chair recognizes Mr. Norman, the gentleman from South 
Carolina.
    Mr. Norman. Thank you, Mr. Chairman.
    Dr. DeCicco, in your testimony you mentioned that federally 
funded research and development should be precompetitive. What 
does that mean, and how would we prioritize this kind of R&D in 
the future?
    Dr. DeCicco. Well, I think precompetitive, you know, speaks 
to some of the very issues where we have some, you know, 
disagreements here. You know, precompetitive really refers to 
the very basic research--again, some of the biochemistry, 
molecular, biology, genetic engineering, things like that--that 
provide new knowledge that can be used by industry to produce 
new products, produce better products, and all of the above. 
But when you get into trying to do something to make a specific 
product, you know, where the government is going to try to make 
a fuel, that is right there in the competitive realm.
    The downstream industries, downstream petroleum industry is 
a very competitive industry in terms of the technologies. 
They're always looking for ways to make fuels, fuel molecules 
that meet the standards of high performance at lower cost. So, 
I do not think actual fuel synthesis is, you know, necessary in 
this--you know, for R&D.
    Mr. Norman. Thank you.
    Mr. Loris, policymakers have I guess made the argument that 
subsidized biofuel production will reduce the dependence on 
foreign energy sources. Do you agree or disagree?
    Mr. Loris. Yes, but marginally. I mean, again, as I 
mentioned in my oral remarks, the U.S. biofuels market 
represents only five percent of the entire transportation fuels 
market. We've seen a lot of penetration of natural gas 
vehicles, so if you're going to mandate the production of 
increased and offer more biofuels, that's going to in some 
senses reduce our dependence on oil and foreign oil, but it's a 
drop in the bucket compared to how much we use.
    Mr. Norman. So, the yield on the--the return on investment 
is not there in your opinion?
    Mr. Loris. Not for the cost that we're paying, certainly 
not.
    Mr. Norman. Thank you.
    I yield, Mr. Chairman.
    Chairman Biggs. Thank you.
    The Chair recognizes the gentleman from Indiana, Mr. Banks.
    Mr. Banks. Thank you, Mr. Chairman.
    I'm new around here, so I'm trying to figure all of this 
out. And to jump right into the conversation, many 
conservatives argue that mandates like RFS, while intentioned 
for incorporating and advancing biofuel development into the 
market, has not accomplished what it set out to do in the first 
place.
    So, as I look at--as I research a little bit about Growth 
Energy and look at the FEC campaign filings, which appear that 
Growth Energy PAC, which is associated with your organization, 
Ms. Skor, gives a lot of money away to candidates for federal 
office who support RFS. When I look at the list of board 
members on your website, it appears that your board members 
benefit quite handsomely from RFS.
    I wonder--my question is actually for you, Mr. Loris. I 
wonder, as I look into that background, how much can we rely on 
research from an organization like Growth Energy--their 
research, their testimony, their studies--when it appears that 
they gain a pretty significant political benefit from RFS in 
the first place?
    Mr. Loris. Well, I won't speak to the credibility of their 
research, but I will say that when you point to job numbers 
created by the RFS and by government subsidies, what you don't 
see is the costs not just to the taxpayers but where those 
investments could have been made elsewhere. Yes, if you mandate 
something or subsidize something, you're going to get people to 
produce that, you're going to have jobs as a result, but those 
are investments and that's an opportunity cost where those 
investments could have been made elsewhere. You could use your 
taxpayer money elsewhere. Those private sector investments that 
chasing--that are chasing public money could have been invested 
elsewhere as well. So, you have--when you look at government-
subsidized jobs, you also have to look at the opportunity cost 
of what that money could have been spent on.
    Mr. Banks. So, as I dig a little bit deeper, one of Growth 
Energy's board members said that ``Mandating biofuels is the 
renaissance of rural America'' is what he said. Is that true? 
Are mandating biofuels really the cure for American energy or 
the, ``renaissance of rural America,'' or is this just another 
example of crony capitalism?
    Mr. Loris. Yes. I would say it's cronyism for sure. And 
then we do have a lot of cronyism in energy markets. It's not 
limited to biofuels, but absolutely when there are certain 
select few that benefit in these rural communities. But as I 
mentioned in my oral remarks as well, there were certain rural 
communities that bet big on this promise and lost. There's a 
lot of local and state incentives, and when you had corn price 
spikes in 2008 and 2012, a lot of these companies went belly 
up. Contracts to farmers weren't paid. You had these small 
towns going through very difficult bankruptcy litigation. You 
had tenant farmers who were being squeezed out of the land 
because the land prices were increasing so much.
    So, even in rural America I think there's been a lot of 
winners and losers, not to mention again all the livestock 
producers and the increased costs for animal feeds, which is 
why you have organizations like the Turkey Federation and the 
Chicken Council and the Restaurants Association, which are also 
a lot of small-business owners opposing this policy.
    Mr. Banks. So, you would agree then that actually we've--
with RFS we've actually distorted the market?
    Mr. Loris. Absolutely.
    Mr. Banks. Okay. My next question, when I look at Growth 
Energy's website, they claim that the use of American ethanol 
reduces our nation's overreliance on volatile foreign energy 
markets. And Ms. Skor's own testimony states that every gallon 
of clean-burning ethanol decreases our dependence on foreign 
oil. But from my research, from a lot of sources, it seems that 
the United States has become in fact more reliant on foreign 
imports of soybeans and ethanol from South America to comply 
with RFS's goals.
    So, Mr. Loris, can you speak a little bit about the 
accuracy of Ms. Skor's testimony about reliance on the RFS 
eliminating the reliance on foreign imports?
    Mr. Loris. Yes. Well, in terms of biomass diesel, we have 
seen a huge increase in imports from--I believe it was 7 
million gallons in 2009 to over 900 million gallons in 2016. We 
are now a net importer of biomass diesel by about 600 million 
gallons. So, yes, we are relying on these other countries who 
can provide these fuels cheaper. And that's not to say in a 
world where we have the RFS we should limit our ability to 
import it. If other countries can make this product cheaper, 
then we should be able to import it, but that just slaps in the 
face of economic reality if we have to slap tariffs on our 
U.S.-based biofuel production to keep it competitive and keep 
it meeting America's market demand that's a result of the 
actual mandate.
    Mr. Banks. Thank you, Mr. Chairman. I yield back.
    Chairman Biggs. Thank you.
    Ms. Skor. Mr. Chairman?
    Chairman Biggs. The Chair recognizes the gentleman from 
Illinois, Dr. Foster.
    Mr. Foster. Yes. I guess I would like to use the first 45 
seconds of my time to allow Ms. Skor to answer some of the 
things.
    Ms. Skor. Thank you. There were a lot of statements with 
respect to Growth Energy's credibility, and I just wanted to 
correct the record on a few things.
    First of all, our industry does not enjoy any government-
subsidized jobs. The biofuels industry today does not have any 
tax incentives. We once did, a blender's tax credit, that 
expired with our support in 2011. I would say in contrast the 
oil and gas industry today enjoys more than $4 billion in 
annual tax incentives, so I just wanted to set the record 
there.
    With respect to the question on the renaissance for rural 
America, it is very true and very important that the biofuels 
industry provides a wonderful marketplace for the American 
farmer. We, as a country, are so fortunate to have such a 
robust agricultural sector, and we--the--our American farmers 
are growing more with less every year, and they need a 
marketplace. Ethanol provides a wonderful marketplace for the 
farmer. So to the extent that my members and ethanol producers 
are successful, it is a result of being able to provide a 
marketplace for the American farmer, while also providing a 
high-energy, high-octane fuel.
    Mr. Foster. Thank you. That was two points that I intended 
to make myself. And, you know, I think the distortion of the 
marketplace, you know, caused by the subsidies for fossil fuels 
that are not present for biofuels are really, you know, a 
painful distortion of the marketplace that's hurting rural 
America, and so I should--I put myself on the record as a 
strong supporter of ethanol.
    I think a lot of the attacks against ethanol are based on 
really obsolete research, that if you look at a state-of-the-
art ethanol plant, it has made impressive gains in its energy 
efficiency and reuse of DDGs, all that sort of stuff. If you 
actually scored the carbon footprint, for example, for a modern 
ethanol plant, it is a big win for the environment.
    And I think that since we generally do not look at the 
social impact of CO2 emissions in general in most 
economic analyses that it is appropriate to frankly distort our 
economy in the opposite direction to make ethanol--you know, 
make ethanol and biofuels generally, those with good carbon 
footprints, preferred.
    I'd also like to talk a little bit about, you know, this 
question of whether you have--whether long-term federal 
research--you know, at what point you make the transition from 
that to just say, okay, let the market decide. And if you look 
at some of the things that are going to be transformative in 
biofuels for--in the next few years, there's no question that 
high on that list is CRISPR, you know, the ability to do 
genetic engineering of crops. This is going to be 
transformative for everything you can name. It avoids a lot of 
the discussions--you know, many people, you know, for good 
reasons or bad, are very reticent about using genetically 
modified food, but, you know, genetically--ethanol made with 
genetically modified organisms has little science-based 
objection to it.
    And so this is something that was--went from being, you 
know, deep speculative federally funded research to just 
transformative to the medical industry and in the coming years 
to biofuels in very short order, and so I think it's a mistake 
to contemplate the sort of draconian budget cuts that we're 
seeing to federally funded, you know, quote/unquote, you know, 
curiosity-based research because of the speed at which that can 
go from being a laboratory curiosity to something that our 
future economy depends on.
    And so I was wondering if any one of you wants to kind of--
to, you know, speak, for example, on, you know, the massive 
budget cuts that we are seeing contemplated by the Trump 
Administration in research that is long-term research but yet 
targeted in the long term towards energy? Yes.
    Dr. DeCicco. Yes, I do want to make clear, you know, when 
I've been critical of the direction of some of the research 
oriented to making biofuels, that that should not be taken to 
think that I think that we should contract federal support for 
research overall, so I'm really talking about a need to 
reprioritize, perhaps focus more on fundamentals, focus more on 
other areas. So, I really think that the country needs to 
maintain a very high level and very robust level of federal 
investment in fundamental science and R&D, all the different 
areas of science to, you know, really help the country maintain 
competitiveness and give industry the new knowledge and the new 
insights that it can run with.
    So, just--even though I'm--I feel like there's a need for 
reprioritization and to question some assumptions around the 
particular area of bioenergy, I think, you know, the country 
definitely should maintain a high level of federal research 
investment overall.
    Mr. Foster. Thank you. And I believe my time is expired.
    Chairman Biggs. Thank you.
    The Chair recognizes the gentleman from Texas, Mr. Babin.
    Mr. Babin. Thank you, Mr. Chairman. I appreciate it. Thank 
you, witnesses.
    Dr. DeCicco, your testimony stated that biofuels mandates 
and subsidies have largely failed because they are designed to 
promote fuels that are, ``fundamentally inferior to liquid 
hydrocarbons,'' for most transportation needs. What scientific 
breakthroughs would be necessary to change the potential of 
biofuels to compete on a performance basis with hydrocarbons?
    Dr. DeCicco. Well, there was a lot of increasing emphasis, 
including direct federal subsidization of biofuel companies. 
One of the notable bankruptcies was a company called KiOR that 
received many tens of millions of dollars of federal grants. It 
also had private investment. And it promised to make fuels that 
were fully fungible, in other words, to take biomass, use a 
process known as pyrolysis, and convert it into the kind of 
molecules that we find in ordinary gasoline and diesel fuel.
    Liquid hydrocarbons, when it comes to liquid fuel, they're 
pretty much as close to perfect as you can get for fuel. They 
don't really need to be improved upon. You can make octane--
octane itself is a hydrocarbon, okay, so you can make it, make 
octane enhancing components of various kinds from many sources. 
Biomass is a potential source, but that should be really 
dictated by the economics.
    Ethanol is an octane booster, there's no question about 
that, but it's not the only way to boost oxygen. And fuels no 
longer need oxygen in them. Ms. Skor mentioned, you know, the 
oxygenate mandate, which happened before the RFS after the MTBE 
phaseout. There was a time when it was thought that oxygen 
would be beneficial in a fuel. That time has long since come 
and gone with advances in reformulated gasoline, reformulated--
well, you never want oxygen in diesel anyway.
    So, you know, the point here is that, again, to go back to 
my earlier point, you know, the industry--the petroleum 
industry knows how to make a very excellent fuels, and I don't 
think there's anything to offer on the bio side to make a 
better fuel. But the banner clean burning is just in my view--
I'm sorry, it's just rhetoric. There's no scientific basis 
because you can burn gasoline now extremely cleanly.
    Mr. Babin. Thank you very much.
    And, Dr. Gilna, do you agree with what he said, and why or 
why not? And what research are you conducting at BESC that 
would help accomplish this goal?
    Dr. Gilna. Well, if you will allow me, I'd like to give a 
somewhat folksy answer to your question, and it's simply this. 
I--my wife and I have a granddaughter. She's two years old, 
Molly. And of this much I am certain, that whatever she uses 
when she's my age to fuel her hover car will not be fossil 
fuel-based unless at least it's synthetic. So I think from my 
perspective certainly we need and have the opportunity here to 
take a long view, and that is the role of government in basic 
research here is we need to develop options. It may or may not 
be biofuels. Right now, as far as I'm concerned personally, the 
investment of my time and my skills is best pointed at that. 
But I think as a country, we need to--we need a diversity of 
options for the consumer for fuels. That's my folksy answer.
    Mr. Babin. Okay. Well, let me ask you a little bit further, 
then. If she's 2 and when she's your age--and you look like a 
fairly young guy--are you saying that she will not be using 
fossil fuels because there--that won't be available or because 
there will be other developments besides biofuels, et cetera, 
et cetera?
    Dr. Gilna. My basic premise here is that, no matter where 
they come from, our fossil fuel resources in this--on this 
planet are by definition finite.
    Mr. Babin. Now, we've had numerous, huge findings----
    Dr. Gilna. We have.
    Mr. Babin. --around the world some people say that will 
last us for the next two centuries. Were you aware of that?
    Dr. Gilna. Yes. Yes. But I actually--I still believe that 
alternatives and choices are needed.
    Mr. Babin. Yes, sir. Dr. DeCicco?
    Dr. DeCicco. One of the things that people fail to 
understand in the renewable debate is that the resource for 
making biofuels is far more limited than the fossil resource 
because that resource is high-quality arable land. Talk about 
finite. That is finite. That's why, as the ethanol mandate or 
RFS has ramped up, sod has been--had to been busted. We've had 
to--had indirect effects moving into deforestation. Land is not 
renewable. It's one of our most precious resources. And how we 
use that land and what we use that for is absolutely critical, 
and in my view the science, which I know my science dissents 
from the many piles of studies that have been generated over 
the years talking about the benefits of biofuels, the issue 
here is the opportunity cost of land.
    Natural arable land is by definition already removing 
CO2 from the atmosphere. That's why it's productive. 
If we were to have the kind of breakthroughs to, say, grow 
algae in test tubes in the desert, well, that would be 
potentially beneficial. And really fundamental work--not trying 
to, you know, turn the algae into fuel but work on maybe 
organisms that can do that better than current algae, that's--
falls within the very fundamental work that I think the 
government should be investing in.
    But I just want to point out that this claim of renewable 
for biofuels is in many ways very misleading because land is a 
precious resource, and we are far closer to running out of good 
land with all the different needs for land than we are for 
running out of the fossil resource underground.
    Mr. Babin. Thank you.
    Thank you, Mr. Chairman.
    Chairman Biggs. Thank you.
    The Chair recognizes the gentleman from Kansas, Mr. 
Marshall.
    Mr. Marshall. Thank you, Chairman.
    I think I'll start with Ms. Skor. And I apologize for being 
late. We were talking about foot-and-mouth disease over in ag 
land and thought that was a pretty important topic, too.
    I do live in the largest ag-producing district in the 
country, and when ethanol was first becoming of age, one of the 
biggest concerns was going to be the price of corn. We have 
lots of feedlots. And so what has happened to the price of corn 
since ethanol's came--come around and expanded and the price of 
corn and the cost of food as well?
    Ms. Skor. The price--first of all, one thing that the 
ethanol marketplace has done is provide stability in corn 
prices, which is extremely important for the corn farmer. I 
will say the price of corn today is actually lower than it was 
when the RFS was enacted and expanded. And so there is 
stability, but you aren't seeing off-the-charts corn prices 
right now.
    With respect to food prices, if you open up Wall Street 
Journal or Bloomberg or Financial Times, you'll read stories 
about the fact that, as a country, we are experiencing an all-
time low continuous trend in terms of food prices. I know the 
U.N. has an index looking at the price of cereal, and the price 
of cereal is lower than it was in 2007 when we expanded the 
renewable fuel standard. And so there is not a correlation in 
terms of the price of food and expansion in terms of ethanol 
production. The data clearly show there's not a correlation.
    Mr. Marshall. Ms. Skor, I've visited with several ethanol 
plants, and they typically offer a nickel or dime more a bushel 
to the farmers. Is that a typical across-the-country situation 
or I think it's unique in Kansas?
    Ms. Skor. I think there are many ethanol plants that are 
co-op farmer-owned, and so they're very sympathetic to the 
farmer and they're comfortable--they would like to make a 
profit, and they're comfortable with the farmer making a profit 
as well. As an industry, we are public--we have publicly owned 
plants and privately owned and large and small, so we really 
reflect the country as a whole.
    Mr. Marshall. Yes, it's been a great example of American 
ingenuity in my district. I think we're up to ten ethanol 
plants in the State now. Also, when the corn came along, I mean 
like ethanol came along, the cattle feeders had lots of 
concerns. And through modern technology, I have something 
called dry distillers grain that not only is used in the local 
feedlots but we're even able to export it. Could you comment a 
little bit on dry distillers grain and some of the other 
byproducts that we're seeing with our ethanol plants now?
    Ms. Skor. Many people don't know that an ethanol plant is 
actually a biorefinery, and we have many coproducts that we 
produce. One of them is distillers grains. It's a high-protein 
animal feed. It's actually the second-largest source of animal 
feed within the country, and it is so economical and so healthy 
for the animal that we do have a substantial export market for 
the distillers grains as well.
    Mr. Marshall. Who are we exporting it to? Is it China or 
who gets most of it?
    Ms. Skor. China has been a wonderful trading partner for 
both distillers grains and ethanol. It's unfortunate this year 
that they are erecting some protective tariffs in place, and so 
that's a real challenge for the U.S. agricultural sector.
    Mr. Marshall. I think I'll finish up with just my--you 
know, national security of course is on everyone's mind, and 
one of my goals I said on the campaign oftentimes was someday I 
hope my grandson never has to use gasoline from imported oil. 
And in fact we're saving, they say, maybe 2 billion barrels of 
foreign oil each year from being imported. The biofuel is--the 
first generation is corn ethanol and advanced biofuels. How do 
the--how do these greenhouse emissions differ from the corn 
ethanol versus advanced biofuels?
    Ms. Skor. You nearly double the greenhouse gas reduction 
when you go from first-generation cornstarch ethanol to second-
generation, and you're starting at a pretty healthy baseline 
with a 43 percent reduction to begin with, so substantial 
savings when you're talking about the environment.
    Mr. Marshall. Okay. I yield back the remainder of my time. 
Thank you.
    Ms. Bonamici. We don't have any, Mr. Chairman, but if 
you're willing to do a second round of questions, we'd be 
interested.
    Chairman Biggs. As much fun as this has been the first 
round, and I do think it's been very interesting and very, very 
informative, I think we'll pass on the second round of 
questions. Thank you, though.
    I thank the witnesses. It's been very interesting and 
valuable testimony, very informative.
    The record will remain open for two weeks for additional 
comments and written questions from Members. I appreciate the 
remarks regarding mandates, subsidies, innovations, basic 
versus fundamental research, been very interesting.
    This hearing is adjourned.
    [Whereupon, at 11:53 a.m., the Subcommittees were 
adjourned.]

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