Statement of Congressman John D. Dingell, Ranking Member
Committee on Energy and Commerce

COMMITTEE ON ENERGY AND COMMERCE
HEARING ON “DISCUSSION DRAFT PROVIDING FOR A REDUCTION IN THE NUMBER OF BOUTIQUE FUELS”

June 7, 2006

Mr. Chairman, thank you for holding this hearing today. I must note that this process stands in marked contrast to that used on the refinery bill, which moved to the House floor without the benefit of this Committee’s consideration. I hope today's process will lead us to a better result.

This discussion draft to reduce the number of boutique fuels raises several important questions, most importantly: What has changed since last August, when we enacted the Energy Policy Act of 2005 (EPACT)? We agreed to substantive provisions in that bill to address what some believed were problems with State clean air fuels or "boutique fuels."

First, in response to concerns about a proliferation of State clean air fuels, we adopted a provision to prohibit any increase in the number of State clean air fuel programs.

Second, in response to concerns about decreased fungibility of the fuel supply, which could exacerbate price spikes or supply disruptions during emergencies, we adopted language that gave the Environmental Protection Agency (EPA) authority to waive State requirements in emergencies. This new provision was used extensively and proved helpful in the wake of Hurricanes Katrina and Rita.

Third, EPACT 2005 repealed the oxygenate requirement for Federal reformulated gasoline, eliminating one of the main drivers for States to adopt their own clean air fuels – concerns about MTBE in drinking water.

Lastly, the Department of Energy (DOE) and EPA are required under EPACT 2005 to jointly prepare and send a report to Congress by early August so we can evaluate the effect of these changes, and determine whether further action would be appropriate. The report would also recommend further legislative changes, if the Administration deemed that necessary.

EPACT 2005 contained a comprehensive approach to solve many of the known problems of boutique fuels and required reports to evaluate the effect of those legislative changes.

Now we find ourselves in the curious position of attempting to legislate without the very information we agreed would allow us to evaluate its impact. Have new facts come to light that indicate a need for us to change the law that was passed less than a year ago? Is there evidence that State clean air fuels have contributed to the run up in gas prices? Is there evidence that the waiver authority in EPACT 2005 was insufficient?

And why is the Administration only now beginning to implement these boutique fuel provisions? For example, EPA was directed to issue a list of the State clean air fuel programs 90 days after enactment of EPACT 2005. Instead EPA, some seven months late, only yesterday published the proposed list for comment. Also, within 180 days of enactment, EPA was to publish regulations governing the waiver authority for State clean air fuels in extreme and unusual emergencies. These regulations have yet to be proposed.

EPA has been rather slow in meeting their responsibilities set forth by Congress, perhaps due in part to insufficient Congressional oversight. But I note that EPA moved on this matter quickly when the President became interested in the issue of boutique fuels last April.

I suggest that we take advantage of EPA’s awakening, and spend our time overseeing the implementation of the statute we labored so mightily to enact, rather than rushing to legislate before we get the information being gathered under the 2005 Act.

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(Contact: Jodi Seth, 202-225-3641)