Congressional Update: High Gas Prices, Gas Holiday, Renewable Diesel, Build Back Better-Lite
As Congressional Democrats continue searching for ways to address high gas prices, the House Energy and Commerce Committee held a hearing with major oil company CEOs where Committee Democrats largely accused the companies of price-gouging.
Oil company representatives pushed back against this narrative, arguing that prices are set by the global futures markets and that the fastest way to reduce gas prices is to increase domestic energy production.
Senators from the west coast, including Maria Cantwell (D-WA), Dianne Feinstein (D-CA), and Ron Wyden (D-OR), urged the Federal Trade Commission to investigate “elevated and volatile” prices for gasoline, diesel, and jet fuel served in Washington, California, and Oregon.
The Senators wrote they were “concerned that current prices borne by consumers at the pump are disproportionate to the rise and subsequent decline in the price of crude oil over the past month and cannot be fully explained by supply and demand fundamentals.”
Gas Tax Holiday
Some Democrats continue advocating for a gas tax holiday, but Speaker Nancy Pelosi (D-CA), Senator Joe Manchin (D-WV), and many other Republicans and Democrats oppose such a measure, arguing it would deplete the Highway Trust Fund without solving the underlying supply issue.
Ban Russian Energy Imports
Continuing pressure on Russia, Congress voted nearly unanimously this week (100-0 in the Senate; 413-9 in the House) to formally ban imports of Russian oil, gas, and coal.
Build Back Better
The Senate Energy and Natural Resources Committee also held a hearing on domestic critical mineral production, with Chairman Manchin (D-WV) strongly advocating for establishing a domestic supply chain.
He also said he would not support an electric vehicle (EV) domestic battery tax credit unless the minerals going into such batteries are also produced domestically.
As we have previously reported, Manchin has begun outlining markers for a slimmed-down Build Back Better (BBB) bill that would focus on clean energy incentives paid for by tax increases on wealthy Americans.
Also this week, a University of California professor published a study arguing that new EVs could increase crash fatalities due to their increased weight compared to traditional gas-burning cars.
The Biden Administration and Congressional Democrats continue weighing options to pressure the US Postal Service (USPS) to electrify its fleet.
USPS is defying Democratic wishes and is moving forward with a $6 billion vehicle purchase plan of which 90 percent will be traditional internal combustion engines (ICE).
In addition, Senators John Barrasso (R-WY), Bill Cassidy (R-LA), Steve Daines (R-MT), Ben Ray Lujan (D-NM), and Dianne Feinstein (D-CA) announced bipartisan legislation this week that would allow renewable diesel (RD) fuel production facilities to qualify for certain Department of Energy loans.
The “Renewable Diesel and Sustainable Aviation Fuel Parity Act of 2022” aims to increase RD use by exempting RD that meets the same ASTM specifications as diesel fuel from federal labeling requirements.
Biomass-based diesel fuels include biodiesel and renewable diesel, both of which are refined from the same types of fat, oil, and grease feedstocks.
Renewable diesel is chemically indistinguishable from petroleum diesel (known as a drop-in diesel fuel), meaning that it meets specifications for use in existing infrastructure and diesel engines and is not subject to any blending limitations.
Biodiesel is a mixture of chemical compounds known as alkyl esters and is often combined with petroleum diesel in blends of 5 percent to 20 percent, known as B5 to B20, respectively.
EIA projects that production of renewable diesel supply will grow because of its compatibility with existing distribution infrastructure and engines, higher state and federal targets for renewable fuel production, incentives from tax credits, and the conversion of existing petroleum refineries into renewable diesel refineries.
Finally, Congress has closed out its six-week work session, embarking on a two-week recess. The end of April and May period will be crucial for determining any progress on BBB.