Biodiesel Board's Steckel discusses Senate EPW action on fuel standard

With the Senate Environment and Public Works Committee convening an oversight hearing on the renewable fuel standard this week, what is the future of U.S. EPA's 2014 volume proposal? During today's OnPoint, Anne Steckel, vice president of federal affairs at the National Biodiesel Board, discusses this week's hearing and talks about the impact the agency's 2014 proposal could have on investments in her industry.


Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Anne Steckel, vice president of federal affairs at the National Biodiesel Board. Anne, thanks for coming back on the show.

Anne Steckel: Thanks for having me. It's a pleasure to be here.

Monica Trauzzi: Anne, the Senate Environment and Public Works Committee took up the renewable fuels issue this week. It's a significant move in the overall conversation on the RFS. What's your understanding of how far Chairwoman Boxer is willing to go on this issue, beyond oversight?

Anne Steckel: Well, I think that the hearing was a step in the right direction today. The Chairwoman made some very positive comments about advanced biofuels, and biodiesel is the first commercially-available advanced biofuel, so we took that as a very good sign in that she said she didn't wanna backtrack on the program, and we certainly heard a lot of support from various senators about the biomass-based diesel program in that why was EPA lowering these volumes and what was their plan moving forward and that the implications of what we do in DC reaches people all across the country because we employ several folks all across the country. So it was a step I the right direction, we think.

Monica Trauzzi: So there's obvious disappointment within your industry following EPA's proposal that's 2014 renewable fuels targets, and you had lobbied hard for EPA to ramp up biodiesel in the 2014 RFS. Do you think the agency made fair considerations of the state of play when they released that draft?

Anne Steckel: Well, we were incredibly disappointed with the proposal that EPA put out, and what we're doing right now is going back to EPA, and our members are contacting EPA and saying we have lots of data and information saying that we should be at least 1.7 billion gallons next year in terms of our number. We're on track to produce at least 2 billion gallons this year, so backtracking to 1.28 billion gallons would be a significant cut in our industry, and those have real term effects across the country in terms of the economy and the environment and jobs, and so we think that if EPA listens and looks at the data we presented, that they'll change their mind on this.

Monica Trauzzi: In your meetings with administration officials prior to the release of the draft, was there any hint or indication that this was coming?

Anne Steckel: We were very surprised to see this come out from the administration. The Obama administration has said that they believe in climate change, that they want to support jobs, they want to do things for the environment, and so for them to so dramatically cut our numbers came as a big shock to our producers. We had sent a letter from 32 members of the United States Senate had sent a letter saying that we need to raise these volumes to at least 1.7 billion gallons, and so for the Obama administration to really take a step backwards was very disappointing.

Monica Trauzzi: I know a lot of people are asking the question of why. Some folks would say that it's because of the strength of the oil lobby and the campaign that they had run prior to the release of the draft. Others say this was just a pragmatic consideration by the agency, looking at the numbers and the strength of the industry.

Anne Steckel: Well, the question of why is a good question, and we don't exactly know why, and several senators have posed that question to the administration and we really haven't gotten a clear answer on that. So that really leads us to believe that we need to continue advocating on behalf of our industry to the administration. We were able to produce at least 1.7 billion gallons this year, so that dramatic setback will really affect our producers, and so we need to get our message across that the direction they're headed is wrong.

Monica Trauzzi: So what are you hearing from your producers right now in terms of the impact of the draft on businesses and jobs?

Anne Steckel: We've already seen real term effects of this draft that have come out. Clearly, getting access to capital for our businesses is a big deal, and having even a proposal where it significantly has cut them back has really impacted our businesses dramatically, so we're going to take these next two months and really focus on getting the message across to the EPA, that we're an advanced biofuel that's here today and there's no need to backtrack. President Obama has said this has been one of his policy priorities is climate change, and we fit very nicely into that, reducing emissions by 57 percent or higher.

Monica Trauzzi: At what point do investors start pulling out money?

Anne Steckel: Investors have been willing to go - they understand the fluid nature of it, but clearly, having access to capital, and for some of our plants that are developing, is a big challenge, and so for these numbers to be out there is very detrimental, and that's why we have to work harder than possible to get them reversed and to get them up.

Monica Trauzzi: So in the background of this debate is the tax credit discussion, and there are several credits that are set to expire at the end of the year, including credits for biodiesel. At what point will your industry no longer require that level of assistance?

Anne Steckel: Well, right now the biodiesel tax incentive is important to our industry, and we're working with people on Capitol Hill to have that extended in either a tax reform package or an extenders package, and having that stability of the marketplace allows us to really diversify in all of our transportation infrastructure needs, and it's been very good. I mean, we're a very small, growing industry, and we're competing against an industry that's been heavily subsidized - the oil industry - for several decades, so this is something that we really need to focus on.

Monica Trauzzi: All right, Anne, we'll end it right there. Thank you for coming on the show again.

Anne Steckel: Thank you, Monica. I appreciate it.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

[End of Audio]



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