News

Last week saw an important study in contrasts in the leadership of the two Senate committees with primary jurisdiction over energy policy. It illustrates a fundamental divide among Senate Republicans between the majority of members who seek to protect Americans from expensive and unworkable energy mandates and the minority who would use federal power to enrich special interests at the expense of the public. On Tuesday, Sen. Mike Lee, chair of the Senate Natural Resources Committee, introduced legislation that would make clear that burdensome fuel mandates on small refineries under the Renewable Fuel Standard (RFS) that are waived as instructed by Congress cannot be reimposed on other refiners. On Thursday, Sen. Shelley Capito, chair of the Senate Environment and Public Works Committee, helmed a hearing to advance S. 881, the Renewable Fuel for Ocean-going Vessels Act, which would expand the RFS program to include fuel for ships. One chair is working to protect Americans from energy mandates, the other is working to increase them.

The legislation from Sen. Lee, the Protect Consumers from Reallocation Costs Act, comes in response to regulatory actions from the Trump administration. In August, the Environmental Protection Agency (EPA) announced decisions on nearly 200 backlogged applications for small refinery exemptions (SREs) from the RFS dating back to 2016. The SRE waiver process for small refineries was written into the RFS program in an attempt to reduce the burden and expense of compliance with the mandate. While the RFS mandates biofuel volume blending requirements on refineries based on their percentage of total fuel production, small refineries may seek an exemption from a given year’s volumes in the event of economic hardship caused by the mandate.

Despite this clear will of Congress, many of these waivers had been held up both by dishonest assertions from presidential administrations as well as vexatious litigation from biofuel special interests. After decisions at the Supreme Court and the D.C. Circuit rejecting those efforts, EPA acted to consider and largely approve the backlogged SREs. However, in its decision approving most of the SRE applications, EPA indicated that it plans a rulemaking process to reallocate the fuel volumes that were waived and impose them on other refiners. There is no statutory support for this reallocation process; EPA is proposing to make it up as a sop to biofuel lobbyists. Sen. Lee’s legislation would nip this illegal gambit in the bud, making the implicit explicit: that the SRE process is a relief valve to reduce the burden of the RFS, not an opportunity to reimpose that burden on other refiners. 

In contrast, S.881 seeks to expand the RFS, taking the costly and unworkable mandate into a new transportation sector. Republicans have touted themselves as the opponents of energy mandates for years now, precisely the opposite of this proposed legislation. Opposition to energy mandates fueled Republican successes in the 2024 election. Promises to halt EV mandates and many of the subsidies and mandates from the Biden Inflation Reduction Act proved popular with the American people. This year Republicans in Congress have gone a long way towards rolling back the energy subsidies and mandates that have raised energy costs and undermined America’s energy security. Yet on the RFS a few Senate Republicans persist in defending the outdated and unworkable program.

Back in 2005 when the RFS was first created, perhaps it was understandable to believe that biofuel use could improve national security and reduce our “dependence on foreign oil” to use a popular phrase from the time. But in the last 20 years we have eliminated our dependence on foreign oil with a surge in domestic production. Today, RFS biofuel mandates do not displace foreign oil, they displace domestic oil. Indeed, because imported biofuel is required to meet RFS mandates, the RFS today actually actively undermines our national security. 

With the national security justification made obsolete, the RFS persists now only as a special interest boondoggle, enriching a small elite at the expense of regular Americans. The few Senate Republicans who still defend the program should be embarrassed by the harm it does to our economy and national security. Expanding the RFS even further would be madness. Instead, Republicans should come together and support regular working Americans who pay the price of the RFS every time they fill up their tank.