Today the Subcommittee turns its attention to alternative fuels.  Increasing our nation's energy independence is a goal which I think we all share.  Given that we currently import approximately 60 percent of the oil that we use, it is appropriate and necessary that we explore and encourage all possible means of increasing the domestic production of fuels which will lessen our dependence on foreign sources of oil.  While corn based ethanol is currently the primary alternative fuel produced in the U.S., other bio-fuels many others - such as cellulosic ethanol and bio-diesel - hold great promise for increasing the contribution of domestically produced fuels. Also promising is the potential of coal-to-liquids which we heard testimony in a previous hearing.  Today our focus is on a broader range of alternatives to petroleum.

    The Energy Policy Act of 2005 established a mandatory amount of renewable fuel that must be contained within the U.S. gasoline supply.  The amount of the mandate increases over time with 7.5 billion gallons required in 2012.  For each year after 2012, the Act requires that EPA determine in consultation with the Secretaries of Energy and Agriculture the mandatory renewable fuels volume amount with a minimum of 250 million gallons of renewable fuel to be derived from cellulosic biomass each year. 

    The program started last year pursuant to an interim rule.  The Environmental Protection Agency issued a final rule for the Renewable Fuels Standard (RFS) on April 10, 2007.  The final rule included a mandate that 4 billion gallons of renewable fuels be used the first year, but actual production was almost 5 billion gallons.  The Department of Energy projects that more than 11 billion gallons of renewable fuels will be used in 2012, well above the 7.5 billion gallons mandated by EPACT.

    Today's hearing will explore recent proposals to change the Renewable Fuels Standard by increasing the amount of renewable fuels that would be required, expanding specific requirements for renewable fuels using cellulosic feedstock, broadening the mandate to cover other types of fuels, and possibly changing the renewable fuels standard to a low carbon standard.

    Increasing the amount and type of fuels mandated are the two primary components of the fuels portion of President Bush's proposed "Twenty in Ten" initiative to reduce gasoline consumption by 20 percent by 2017.  The President's proposal would convert the Renewable Fuels Standard into an Alternative Fuels Standard, expanding both the volume of fuel to be produced and the type of fuels that would qualify.  This proposal would require 35 billion gallons of alternative fuels by 2017, an aggressive target.

    One consideration for both current and future fuels mandates is the state of the renewable fuels infrastructure.  Currently, all automakers warranty their vehicle engines to run on ethanol blends up to E10.  Automakers also produce flexible fuel vehicles which can accept ethanol blends up to E85.  There are more than 6 million flexible fuels vehicles on the road today.  Ford, General Motors and the Chrysler Group have also pledged to double their annual production by 2010 and make half of all vehicles bio-fuel capable by 2012. 

    Although the number of flexible fuel vehicles has increased, the availability of E85 at retail outlets has not increased accordingly.  There is a wide range of estimates for the cost of converting existing infrastructure or installing new E85 infrastructure at service stations with estimates ranging from $5,000 to $20,000 to convert existing equipment and from $2,500 to $75,000 to install new equipment.  The availability of the appropriate infrastructure is necessary for the wide scale deployment of alternative fuels, so an examination of the current status as well as any obstacles or opportunity surrounding the alternative fuels infrastructure is appropriate.

    I look forward to hearing from our witnesses regarding the expansion of use of  renewable and/or alternative fuels as well as the related infrastructure issues.