The House’s new Rural Domestic Energy Council is set to release a draft framework for year-round E15 biofuels sales this weekend, but major questions remain about the proposal’s viability.
The council, established last month as part of a deal to advance a package of spending bills, has held multiple meetings in recent weeks to try to hash out differences between members representing agriculture interests and those representing small and midsize oil refiners. The result so far: a mix of ideas to appeal to each side.
A draft proposal obtained by POLITICO’s E&E News would authorize year-round sales of E15 while limiting the number of economic hardship exemptions for small refineries. In a nod to petroleum interests, the draft proposal would not reassign exempted volumes to other refineries.
The draft proposal would codify a definition of economic hardship EPA would use in granting exemptions, and it would bar renewable fuel credits for electric vehicles — the so-called eRINs that proved complex for EPA to implement during the Biden administration.
Lawmakers say they hope the negotiations, which House leaders organized around a tight timeline, will finally lead to a breakthrough after years of failed attempts to enact a permanent, nationwide authorization for the higher ethanol blend.
House Republican leaders appointed members to the council and tasked them with submitting recommendations by Sunday, with the goal of considering a revamped biofuels bill on the House floor by Feb. 25.
“We’ve been meeting aggressively,” said Rep. Zach Nunn (R-Iowa), who played a key role in getting House leaders to charter the council.
“I think we’re getting to a point now where we’re all marching on the same page of what’s in the realm of the possible,” Nunn added. “That should be encouraging for anybody — not just the E15 guys — [but] the refiners, the biofuels and, candidly, American national security.”
The federal renewable fuel standard requires certain volumes of biofuel to be blended into the nation’s transportation fuel supply annually. Most fuel at gas stations now is a 10 percent ethanol blend.
For several years, farm groups have been demanding legislation lifting summer restrictions on the sale of E15, a blend of 15 percent ethanol and 85 percent gasoline.
That would be a boon to farmers, but small and midsize petroleum refiners — many of which don’t actually blend the fuels — say the renewable fuel credits they buy to comply with the law impose onerous costs.
Small refiners can ask EPA for hardship exemptions, a provision in the RFS that has been a subject of repeated litigation but little resolution. Biofuel groups say EPA hands them out too generously, while refiners say the opposite.
‘Problem is in the Senate’
Council members say they believe they have reached an agreement that strikes a delicate balance between the competing interests, but it’s not clear that there is broader consensus on the path forward among Republicans — let alone all of Congress.
The energy council’s framework has been developed only by a select group of House Republicans led by Reps. Randy Feenstra of Iowa and Stephanie Bice of Oklahoma.
The effort has largely excluded Democrats and entirely left out the Senate, where any House-passed bill would likely face new hurdles.
“I don’t think the Senate is involved in what Feenstra is doing, but we’ve got to be,” said Sen. Chuck Grassley (R-Iowa). “The problem is in the Senate, to satisfy the senators that are holding it up.”
In a brief interview, Grassley recalled when senators thought they had a deal to insert the “Nationwide Consumer and Fuel Retailer Choice Act” — H.R. 1346 and S. 593, from Nebraska Republicans Rep. Adrian Smith and Sen. Deb Fischer — into the fiscal 2026 defense policy bill last fall. The amendment did not get a vote amid opposition from oil-state Republican senators.
“The Friday before the thing blew up, we thought everything was OK,” Grassley said. “Just a handful of senators, Republican senators, stopped it.”
Still, E15 champions are optimistic that they have an agreement now that will get buy-in from lawmakers across the ideological spectrum, as well as the powerful agriculture lobby and the American Petroleum Institute, which represents refiners. API supported the most recent version of the year-round E15 bill.
Sen. John Hoeven (R-N.D.) said the energy council’s ability to find compromise on small refinery waivers will be “key” to any deal: “If we can get that adjusted,” he said, “we can get some of the folks on board that have been pushing back and hopefully get it done.”
Nebraska’s Smith said he feels the council has been “moving in the right direction,” but, like other members, declined to share specifics.
“We’ve talked with a broad cross-section of stakeholders, and I think Bice and Feenstra have us really close to a final product,” said Rep. Dusty Johnson (R-S.D.) on Thursday.
The office of House Speaker Mike Johnson (R-La.) declined to comment. Spokespersons for Feenstra and Bice did not respond to requests for comment.
Hoeven said agriculture and energy-focused senators have been working on their own E15 negotiations while the House’s energy council moves ahead with its own plan. He said the chambers are engaged in “parallel efforts” and said “the goal is to get there sooner versus later.”
Nunn echoed that cautious optimism: “I think that we will be on track with this. But obviously this is Congress; a lot of things can happen here.”
Advocates make their demands
Achieving year-round availability of E15 has eluded the industry for years, frustrating corn-state lawmakers and biofuel groups that more than once believed they were on the cusp of a deal.
While EPA has allowed summer sales of E15 through emergency declarations in recent years, federal courts haven’t allowed the agency to lift the restrictions permanently through rulemaking.
President Donald Trump has said he’d sign a bill that allows summer sales of E15, giving the issue potential momentum on Capitol Hill.
Petroleum refiners and their political allies from states such as Oklahoma, Texas and Wyoming have been responsible for putting the brakes on E15 legislation, arguing that an ever-growing flow of ethanol threatens to put small refineries out of business unless some of the RFS rules are changed.
The Fueling American Jobs Coalition, an industry group, urged lawmakers to protect midsize refiners from RFS compliance costs.
“Current draft proposals might work for the world’s largest oil companies, many of whom have offshored refining capacity, but these so-called ‘compromises’ will only force mid-size, independent American refiners out of business,” the coalition said in a statement Thursday.
While the coalition can accept year-round E15 sales coupled with lower renewable fuel credit costs, the group said, “We cannot support any proposals that will be used to drive up the ethanol mandate, a goal the ethanol lobby has openly stated, and a significant threat to mid-size refiners.”
Technically, the RFS, created in the early 2000s, doesn’t have an ethanol mandate, since other types of biofuel can meet the law’s overall goals. But in practice, corn-based ethanol is the main driver of the program, even though Congress envisioned that other sources would gain dominance over the years.
Biofuel groups counter that small refineries asking for hardship exemptions are often part of bigger, profitable companies and that most just pass along the compliance costs to consumers — an assertion the refiners dispute.
Aside from the lobbying fight, ethanol is a potent economic issue in states like Iowa and Illinois — the top two corn-producing states in the nation — that’s driving the politics on both sides of the aisle in Washington.
On Thursday, the advocacy group Rural Voices USA announced a six-figure billboard and digital ad campaign to highlight the “agricultural crisis” unfolding across the Midwest while Congress “continues to stall on a commonsense solution,” according to a news release.
In Illinois, Democratic Rep. Nikki Budzinski is one of several co-chairs of the Congressional Biofuels Caucus, which “recognizes biofuels are key to American energy independence and responsible stewardship of our resources,” according to its website.
Budzinski led a letter in late January from five Democratic biofuel advocates in the House to Johnson, asking to be included on the council.
While that request wasn’t granted, Budzinski’s congressional district is among the leaders nationally in grain and soybean production, including corn, and stands to gain from greater sales of E15. Illinois overall ranks second in corn production to Iowa, with more than 2 billion bushels harvested in 2023, according to IL Corn, an industry group. More than one-fifth was used to make ethanol.
In Budzinski’s 13th District, around 447,000 acres were planted in grain corn in 2022 and a nearly equal amount in soybeans — another source of biofuel — according to the Department of Agriculture.
The letter was also signed by her fellow Illinois Rep. Eric Sorensen, a Democrat who represents a district with more than a million acres of corn and more than $2 billion in crop sales, according to the USDA’s 2022 Census of Agriculture.
“American farmers are facing a mounting crisis,” the five lawmakers wrote. “Input prices are skyrocketing, global export markets are being crushed by the president’s trade war, and commodity supply is outpacing demand due to increased productivity and efficiency in farm operations.”
