California Legislature—2015–16 Regular Session

Assembly Joint Resolution No. 15

Introduced by Assembly Member Grove

May 7, 2015

Assembly Joint Resolution No. 15—Relative to renewable fuels.

LEGISLATIVE COUNSEL’S DIGEST

AJR 15, as introduced, Grove. Renewable fuels.

This measure would urge the President and the Congress of the United States to pass meaningful legislation to reform the federal Renewable Fuel Standard program to address specified concerns.

Fiscal committee: no.

WHEREAS, Under the federal Clean Air Act (42 U.S.C. Sec.
7401 et. seq.), as amended by the Energy Independence and
Security Act of 2007 (Public Law 110-140), the United States
Environmental Protection Agency (EPA) is required to annually
set the standards for the Renewable Fuel Standard (RFS) program;
and

WHEREAS, For the first time since the RFS was passed in
2005, the EPA has proposed lowering the Renewable Volume
Obligations (RVOs) because of the market’s inability to sustain
the federal ethanol mandate; and

WHEREAS, The limitations in the volume of ethanol that can
be consumed in gasoline given practical constraints on the supply
of higher ethanol blends to the vehicles that can use them and other
limits on ethanol blend levels in gasoline, a set of factors commonly
referred to as the ethanol “blend wall,” are closer than ever before;
and

WHEREAS, Due to the blend wall, unnecessary ethanol
production is occurring and there is an insufficient market to
properly consume the E15 ethanol-gasoline blend; and

WHEREAS, The constraints caused by the limitations in the
ability of the industry to produce sufficient volumes of qualifying
renewable fuel lead to the EPA waiving the required levels of
cellulosic ethanol, resulting in a disincentive for manufacturers to
move to second generation biofuels due to the RFS and initial
investment costs; and

WHEREAS, Eighty percent of the nation’s biofuel blending
requirements continue to be met with ethanol, a percentage
disproportionate compared to other biofuels; and

WHEREAS, This government-induced demand for corn ethanol
is diverting 40 percent of the United States’ crops away from food
to fuel production. This diversion has wreaked havoc on corn
markets, increasing corn price volatility and delivering a major
blow to our farmers and food processors that rely on corn for
animal feed; and

WHEREAS, Elevated corn costs drove prices for feed - the
single largest input cost to food producers - to rise, increasing
production costs for livestock producers across the state. As a
result, hundreds of California dairies have closed since the
inception of the RFS; and

WHEREAS, Because of the highly volatile marketplace, many
producers have reduced their herd size sending beef, pork, eggs,
and fish prices up significantly since the inception of the RFS; and

WHEREAS, Altogether, the average United States family of
four faced a $2,000 increase in food costs in 2012 due to the effects
of higher grain prices brought on largely by the RFS; and

WHEREAS, Major automobile makers have publicly stated that
certain manufacturers’ warranties may be void if gasoline with
high ethanol content is used, and many machines with small
engines are at risk if gasoline blended with ethanol is used, putting
thousands of Californians at risk; and

WHEREAS, As a result of the RVOs being consistently finalized
well after the EPA’s deadlines, a vast number of Californian
business are forced to encounter needless uncertainty and market
volatility, which results in negative effects on the state’s economy;
now, therefore, be it

Resolved by the Assembly and the Senate of the State of
California, jointly, That to end the uncertainty created by the EPA
repeatedly missing its own deadlines for RVO levels each year
and to bring fundamental and much needed reform to this costly
and unworkable federal policy, the Legislature of the State of
California urges the President and the Congress of the United
States to pass meaningful legislation to reform the federal
Renewable Fuel Standard program; and be it further

Resolved, That the Chief Clerk of the Assembly transmit copies
of this resolution to the President and Vice President of the United
States, to the Speaker of the House of Representatives, to the
Majority Leader of the Senate, and to each Senator and
Representative from California in the Congress of the United
States.