The Future of Low Carbon Transportation Fuels and Considerations for a National Clean Fuels Program (U.S. Senate Committee on Environment and Public Works)

Hearing	The Future of Low Carbon Transportation Fuels and Considerations for a National Clean Fuels Program
Committee	U.S. Senate Committee on Environment and Public Works
Date	February 15, 2023

 

Hearing Takeaways:

• Clean Fuels Programs: The hearing largely considered whether the U.S. should pursue a national clean fuels program, such as a low carbon fuel standard (LCFS) program. Committee Democrats, Mr. Graff, and Mr. Cooper suggested that such an approach could spur the innovation needed to reduce the U.S.’s greenhouse gas emissions. They noted how the transportation sector accounts for one-third of total greenhouse gas emissions and stated that reducing these emissions would be critical for meeting the Biden administration’s goal of achieving net-zero emissions by 2050. Committee Republicans expressed concerns however that such an approach might empower federal bureaucrats to unilaterally ban certain fuel types and warned that this approach would lead to reduced fuel supplies and higher fuel prices.
  • State LCFS Programs: A key area of debate during the hearing involved the operation of current state LCFS programs in California and Oregon. Committee Democrats, Mr. Graff, and Mr. Cooper remarked that these programs have advanced the production and use of cleaner transportation fuels and have reduced greenhouse gas emissions. They also stated that these programs are helping to keep consumer fuel costs low. Full Committee Ranking Member Shelley Moore Capito (R-WV) and Mr. Spear asserted however that the California and Oregon LCFS Programs are causing these states to have the highest fuel prices in the U.S. Mr. Spear mentioned how his organization, the American Trucking Association, had filed legal challenges to these programs. He also expressed concerns that these programs had unrealistic timelines for achieving net-zero greenhouse gas emissions.
  • Interaction Between Clean Fuels Programs and the Federal Renewable Fuel Standard (RFS) Program: Full Committee Chairman Tom Carper (D-DE) and Mr. Cooper contended that clean fuels programs are meant to complement (rather than substitute for) the existing federal RFS program. Mr. Cooper stated that a well-designed national clean fuels program would drive increased use of ethanol and other renewable fuels above and beyond what is required under the federal RFS program.
  • Technology Neutrality: Full Committee Chairman Carper and the hearing’s witnesses argued that any potential national clean fuels program must be technology neutral. This approach would involve the setting of annual greenhouse gas reduction requirements for the transportation sector and would then allow for the transportation sector to determine the most efficient and economical ways for achieving those reductions without dictating the use of specific fuels or vehicles.
  • Impact on Jobs: Sen. John Fetterman (D-PA) expressed interest in ensuring that transitions to cleaner energy sources would not harm middle class workers. Mr. Graff remarked that the evolution of hydrogen will create many value-added jobs in the U.S. economy. He added that Air Liquide would train workers for these jobs when needed.
  • Impact on Trucking Industry: Mr. Spear expressed concerns that higher fuel costs stemming from the policies under consideration at the hearing would harm the trucking industry. He noted how fuel is the industry’s second highest cost (behind labor) and stated that higher fuel costs could drive smaller businesses to either consolidate or close.  He also stated that trucking businesses will likely pass along these higher fuel costs to their end-consumers in the form of higher prices for their services.
  • RFS Program Delays: Mr. Graff discussed how the current pathway approval process for the RFS program is “significantly delayed” and mentioned how Air Liquide has pending RFS pathway petitions. He asserted that the pathway approval process for the RFS program must be transparent and timely to advance the U.S.’s greenhouse emissions goals.
• Alternative Transportation Fuels: The hearing also focused on the prospects of using alternative fuels (such as hydrogen, biofuels, and ethanol) to reduce greenhouse gas emissions within the transportation sector.
  • Hydrogen Fuels: Full Committee Chairman Tom Carper (D-DE) and Mr. Graff expressed interest in having the U.S. pursue clean hydrogen as a low carbon fuel. Mr. Graff stated that the transition to hydrogen fuels for the vehicles will not impact the vehicle’s range of drivability, refueling experience (in terms of time), weight, and size. He added that temperature does not impact the functioning of hydrogen vehicles. Sen. Jeff Merkley (D-OR) expressed concerns however over the emissions associated with blue hydrogen production and asserted that its name is meant to conceal its negative environmental impacts. Blue hydrogen is hydrogen produced from fossil gas with carbon capture. Sen. Merkley remarked that policymakers should be cognizant of the various forms of hydrogen gas in existence and noted that these different forms range in terms of life cycle greenhouse gas emissions.
  • Biofuels and Ethanol: Sen. Pete Ricketts (R-NE) and Mr. Cooper expressed interest in the role that biofuels and ethanol could play in reducing the U.S.’s greenhouse gas emissions. They also stated that ethanol could reduce consumer gasoline prices. Mr. Cooper noted how ethanol could be used in light-duty vehicles, heavy-duty vehicles, rail fuels, marine fuels, and aviation fuels.
• Electric Vehicles (EVs): Committee Members and the hearing’s witnesses expressed interest in how vehicle electrification efforts would interact with efforts to make use of alternative transportation fuels (such as hydrogen, biofuels, and ethanol). Committee Republicans, Mr. Cooper, and Mr. Spear also raised concerns over the feasibility of quickly deploying EVs.
  • Cost Concerns: Full Committee Ranking Member Shelley Moore Capito (R-WV) and Mr. Spear raised concerns over the high cost of EVs and suggested that vehicles might be too expensive for many Americans to adopt. Full Committee Ranking Member Capito noted how the cost of the average EV in the U.S. is greater than the median income in her state of West Virginia.
  • Electricity Availability Concerns: Subcommittee Republicans and Mr. Spear expressed concerns that the U.S. might not currently possess sufficient electricity capacity to support the mass deployment of EVs. Sen. Markwayne Mullin (R-OK) noted how California already has rolling blackouts and warned that greater EV deployments would exacerbate these energy issues for the state.
  • Supply Chain Concerns: Sen. Pete Ricketts (R-NE) and Mr. Spear raised concerns that that the U.S. will require significant amounts of lithium, graphite, and cobalt to increase its EV production capabilities and noted how these critical minerals are not readily available in the U.S. Sen. Ricketts expressed particular concerns over how the Chinese Communist Party (CCP) controls much of the world’s critical mineral mining, processing, and refining capabilities. Full Committee Chairman Tom Carper (D-DE) stated however that recently enacted laws, including the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act of 2022 would help to secure the U.S.’s domestic supply chain of critical minerals for EVs.
  • Testing Concerns: Sen. Cynthia Lummis (R-WY) noted how EVs tend to be tested at sea level, on flat ground, and at temperatures between 60 and 70 degrees Fahrenheit. She stated that variations in sea level, terrain, and temperature could significantly impact the distance that a person could drive in an EV using a single charge. She expressed interest in ensuring that these factors are addressed in future EV testing.
  • Weight Concerns: Sen. Mullin and Mr. Spear noted how electric trucks would be heavier than diesel trucks. Sen. Mullin stated that the introduction of large numbers of electric trucks would force policymakers to decide between increasing the weight limits for trucks (which would pose safety concerns) or having more trucks on the road (which would increase road congestion).
  • The U.S. Environmental Protection Agency’s (EPA) Recently Proposed RFS “Set” Rule: Committee Republicans and Mr. Cooper raised concerns with the EPA’s recently proposed RFS “Set Rule.” This proposed rule would establish the required volumes of biofuels to be blended with conventional gasoline and diesel, which are known as renewable volume obligation (RVO) limits, for the next three years. This proposed rule permits automotive manufacturers contracting with certain renewable electricity producers to generate compliance credits, which are known as renewable identification numbers (RINs). This rule would use the creation of electric RINs (e-RINs) to incent vehicle electrification efforts. Committee Republicans and Mr. Cooper criticized the proposed rule for allowing EV manufacturers to participate in the RFS program, which is inconsistent with Congressional intent. They called on the EPA remove the e-RINs section of the proposed RFS “Set” rule from the rule. They stated that the EPA should finalize its proposed RVO limits and spend more time developing its e-RINs proposal.
  • Need for Permitting Reforms: Full Committee Chairman Carper and Sen. Lummis remarked that the U.S. would need to enact permitting reforms to ensure that it has sufficient electricity capacity to support the deployment of EVs. Full Committee Chairman Carper expressed optimism that the Biden administration would work with Congress to advance bipartisan permitting reform efforts.
• Impact of Recent Laws on Efforts to Reduce Greenhouse Gas Emissions: The hearing further addressed how recent laws, including the IIJA and the Inflation Reduction Act of 2022, would impact efforts to reduce greenhouse gas emissions.
  • The IIJA: Mr. Spear stated that the IIJA could help to reduce congestion within the U.S.’s infrastructure system. He indicated that this congestion results in 6.87 billion gallons per year being wasted, which amounts to 67.3 million metric tons of carbon dioxide being pumped into the environment.  He asserted that IIJA funds are “more than adequate” for fixing existing roads and bridges and stated that these funds could also support new infrastructure capacity. Sen. Ben Cardin (D-MD) also mentioned how his state how received three major grants under the IIJA’s Low or No Emission Vehicle Program and indicated that these grants are supporting hydrogen production sites and hydrogen fuel cell, electric, and diesel-electric hybrid buses. He added that Baltimore is receiving funding for electric school buses under the law’s Clean School Bus Program.
  • The Inflation Reduction Act of 2022: Mr. Cooper praised the Inflation Reduction Act of 2022’s various tax credits and grant programs. He specifically mentioned how the law had created the Section 45Z Clean Fuel Production Credit, which he described as the tax version of a clean fuel standard. He explained that this provision would provide a tax credit to clean fuel producers based on the carbon intensity of their fuel. He also mentioned how the law had expanded and extended tax credits that promote carbon capture and sequestration. He further mentioned how the law had established a $500 million grant program for biofuels infrastructure. Mr. Graff also discussed how the Inflation Reduction Act of 2022 supports hydrogen production capabilities using several pathways, including renewable power and natural gas with carbon capture.

Hearing Witnesses:

1. Mr. Michael J. Graff, Chairman and CEO, American Air Liquide Holdings Incorporated
2. Mr. Geoff Cooper, President and CEO, Renewable Fuels Association
3. Mr. Chris Spear, President and CEO, American Trucking Association

Member Opening Statements:

Full Committee Chairman Tom Carper (D-DE):

• He noted how his state of Delaware had the lowest elevation of any state in the U.S. and commented that this low elevation makes Delaware especially vulnerable to harms associated with climate change.
• He mentioned how the U.S. National Oceanic and Atmospheric Administration (NOAA) had reported that the U.S. experienced 18 climate change-related disasters with losses exceeding $1 billion in 2022.
  • He also noted how NOAA had reported that sea level rises are occurring faster than predicted.
• He remarked that NOAA’s findings underscore the urgent need for further action to reduce greenhouse gas emissions and to limit the impacts of climate change.
  • He also stated that climate change provides the U.S. with an opportunity to develop clean energy jobs and reduce its dependence on foreign oil.
• He asserted that Congress should focus on the transportation sector in its work to reduce greenhouse gas emissions given the transportation sector accounts for more than 25 percent of the U.S.’s greenhouse gas emissions.
• He discussed how the IIJA and the Inflation Reduction Act of 2022 had made “significant” investments in clean energy and zero-emissions vehicles.
  • He added that these laws would help to secure the U.S.’s domestic supply chain of critical minerals for EVs.
• He remarked however that the U.S. must do more to support the production and development of cleaner fuels for vehicles and to provide greater certainty and flexibility for clean fuel producers.
•  He discussed how several states (including California and Oregon) are either implementing or considering their own technology neutral LCFS programs.
  • He commented that these state efforts have successfully advanced the production and use of cleaner fuels and have kept consumer and compliance costs low.
• He stated that these state efforts contain fuel flexibilities, greater long-term predictability, and cost containment mechanisms that are not included in the federal RFS program.
• He noted how existing state programs often focus on emissions reduction potential when determining what qualifies as a clean fuel.
  • He commented that this approach allows for multiple compliance options for obligated parties.
• He then discussed how a wide range of stakeholders (including the Delaware City Refinery) are interested in producing clean hydrogen as a qualifying clean fuel.
  • He noted how these stakeholders believe that they can use their existing infrastructure to accomplish this goal.
• He mentioned how the U.S. had invested “significant” federal resources to support the development of clean hydrogen infrastructure.
• He noted however that the current federal RFS program did not consider hydrogen to be a clean fuel.
  • He asserted that increasing the production and use of clean hydrogen would be key for reducing greenhouse gas emissions within the transportation sector.
• He stated that the federal RFS program’s clean fuel challenges are not confined to hydrogen and mentioned how the program also posed challenges to biofuels.
  • He asserted that these challenges could be addressed with a more “technology-neutral” approach.
• He expressed interest in considering the establishment of a federal LCFS program.
  • He commented that this standard could provide certainty and flexibility for all stakeholders while also spurring innovation across clean fuel technologies.
• He further expressed interest in convening industry, environmental, and agriculture stakeholders on efforts to decarbonize the U.S.’s transportation fuels and to support job creation.

Full Committee Ranking Member Shelley Moore Capito (R-WV):

• She remarked that LCFS programs are regulatory programs meant to advantage fuels that generate lower carbon emissions over fuels that emit more carbon.
  • She commented that this objective may be achieved through taxpayer-funded financial incentives and through decreasing quotas and/or limits on market access for more emissive fuels.
• She raised concerns over proposals that would empower bureaucrats to decide which fuel sources would qualify as low-carbon fuels and how these fuel sources would be phased out.
  • She commented that these proposals appear to establish a social cost of carbon and engage in centralized economic planning.
• She remarked that previous “heavy handed” regulatory approaches toward fuels have “inevitably” led to reduced fuel supplies and higher fuel prices.
• She stated that these problems have been particularly present in the EPA’s RFS program and mentioned how the EPA had recently proposed its RFS “Set” rule.
  • She explained that this proposed rule would establish the required volumes of biofuels to be blended with conventional gasoline and diesel for the next three years.
  • She also noted how this proposed rule would permit automotive manufacturers contracting with certain renewable electricity producers to generate compliance credits, which are known as RINs.
• She highlighted how the EPA had stated in the proposed RFS “Set” rule that it was using the creation of e-RINs to incent vehicle electrification efforts.
  • She asserted that the EPA’s actions constitute a subsidy for EVs that is not based on Congressional intent.
• She remarked that the EPA’s e-RIN proposal has aggravated both proponents and opponents of the RFS program, as well as environmentalists. 
  • She also raised concerns over how this proposal did not contain any political accountability.
• She then criticized California’s recent actions to regulate transportation fuels and asserted that California’s regulatory and tax policies have contributed to the state’s high gasoline prices.
  • She cited an analysis from Stillwater Associates that had found that California’s LCFS program had increased gasoline prices by 22-cents per gallon in 2022.
• She mentioned how Oregon and Washington had established their own LCFS programs and indicated that the price of gasoline and diesel fuels has risen in these states.
  • She noted how Oregon had experienced a 50-cent per gallon spike in fuel prices in September 2022.
  • She noted how Washington’s LCFS and cap and trade programs had gone into effect at the beginning of 2023 and highlighted how Washington has already experienced an increase in gasoline and diesel prices.
• She remarked that the combination of LCFS programs, environmental regulations, and taxes are causing West Coast states to experience the highest fuel prices within the contiguous U.S.
• She then noted how California will require that 100 percent of the state’s new purchased vehicles be EVs by 2035 through its Advanced Clean Cars II rulemaking.
  • She stated that this target imposed higher costs for consumers seeking to purchase EVs and hydrogen vehicles and could disrupt interstate commerce.
• She indicated that the average price of an EV in the U.S. was $66,000 in August 2022 according to Kelley Blue Book.
  • She highlighted how this amount was greater than West Virginia’s median household income, which is $55,000.
• She stated that while she does not oppose EVs, she asserted that people should be free to purchase vehicles that they want and can afford.
• She further expressed concerns over California’s expensive and unreliable electricity and cautioned that the forced retirement of nuclear energy and natural gas power plants would exacerbate these problems.
  • She added that the electrification of the transportation sector would further contribute to these problems.
• She expressed doubts that many parts of the U.S. (particularly rural regions) will want to adopt the energy policies of California, Oregon, and Washington, especially given the current inflationary environment.
  • She asserted that LCFS programs and cap and trade regulatory policies would further exacerbate the U.S.’s current inflation problems.

Witness Opening Statements:

Mr. Michael J. Graff (American Air Liquide Holdings Incorporated):

• He stated that his company, Air Liquide, is a world leader in sustainable technologies and solutions that help to decarbonize the planet and advance a clean energy economy.
• He remarked that any potential national clean fuels program should be technology neutral and enable emissions reductions through certainty and flexibility.
  • He commented that these elements are essential to promoting private sector investments, creating jobs, and minimizing burdens on American consumers.
• He stated that hydrogen plays an important role in decarbonizing the transportation sector and commented that his company is at the “forefront” of this effort.
• He testified that Air Liquide had invested $250 million in the first world scale liquid hydrogen production facility in Nevada with the capacity to supply renewable hydrogen for more than 40,000 hydrogen fuel cell vehicles.
  • He indicated that much of this hydrogen is being supplied to California to support the compliance with the state’s LCFS program.
• He also mentioned how Air Liquide is involved in many hydrogen hub proposals, which include decarbonization of the transportation sector.
• He noted how Air Liquide had its innovation campus in Delaware and added that Airgas (which is an Air Liquide company) is headquartered in Pennsylvania. 
  • He commented that a hub in this region could unite the East Coast transportation system with the necessary renewable fuel infrastructure.
• He also suggested that an Appalachian hub could leverage the region’s abundant supply of natural gas and employ carbon capture technology to produce low-carbon hydrogen energy.
• He further mentioned how the New York State Energy Research and Development Authority (NYSERDA) is currently leading efforts to convert the Northeast’s abundant wind and hydropower into low-carbon hydrogen energy through electrolysis.
  • He testified that Air Liquide is involved in these efforts through its industrial scale proton-exchange membrane (PEM) electrolyzer.
• He stated that similar initiatives are currently underway in the Midwest, the Southwest, and the Gulf Coast.
• He then remarked that any clean fuels program must be based on flexibility so that it can fully leverage hydrogen energy within the local energy ecosystem.
• He asserted that Air Liquide’s status as a “significant” low-carbon fuel supplier provides it with insight into clean fuels programs.
  • He indicated that these clean fuels programs include the California LCFS program and the federal RFS standard.
• He stated that the California LCFS program has reduced carbon dioxide emissions while stimulating private investments.
  • He noted how the hydrogen and renewable natural gas that Air Liquide supplies to California’s transportation market falls under the state’s LCFS program.
  • He also noted how Air Liquide supplies hydrogen to California’s refining industry, which is also subject to the state’s LCFS program.
• He discussed how the California LCFS program employs a performance-based carbon intensity target and a fuels evaluation methodology that is agnostic regarding technologies and feedstocks.
  • He called this a key feature of the program that is meant to maximize the reduction of greenhouse gas emissions.
• He stated however that a streamlined process through pathway standardization would be beneficial given the number of fuel pathways requiring approval.
• He then remarked that policies that enable the use of Renewable Energy Credits (RECs) and Environmental Attributes (EAs) would support investments that best use regional resources, infrastructure, and technologies to meet targets and increase the supply of low-carbon and renewable energy.
  • He commented that these policies that ensure the consistency in the use of RECs and EAs across all feedstocks and process energy and avoided emissions rules would make the California LCFS program more efficient.
• He lastly discussed how the pathway approval process for the RFS program is “significantly delayed” and mentioned how Air Liquide has pending RFS pathway petitions.
  • He indicated that Air Liquide’s pending petition seeks to qualify hydrogen for renewable natural gas and testified that this petition has not advanced, despite a favorable review from the EPA.
• He asserted that the pathway approval process for the RFS program must be transparent and timely in order to advance the U.S.’s greenhouse emissions reduction goals.

Mr. Geoff Cooper (Renewable Fuels Association):

• He indicated that his organization, the Renewable Fuels Association, is the leading trade association for the U.S. ethanol industry.
• He remarked that the transportation sector is the leading contributor of greenhouse gas emissions in the U.S. and noted how this sector accounts for one-third of total greenhouse gas emissions annually.
  • He indicated that while transportation emissions have fallen slightly from their peak in 2006, he asserted that the pace of emissions reduction must “rapidly accelerate” to meet the Biden administration’s goal of net-zero emissions by 2050.
• He contended that a properly structured clean fuels program would offer the best opportunity to reduce carbon emissions from the transportation sector while simultaneously enhancing energy security, creating jobs, and reducing tailpipe pollution.
• He expressed the Renewable Fuels Association’s support for the development of a national program that would be technology neutral and performance based.
  • He discussed how a clean fuels program would set annual greenhouse gas reduction requirements for the transportation sector and would then allow for the transportation sector to determine the most efficient and economical ways for achieving those reductions without dictating the use of specific fuels or vehicles.
• He stated that renewable fuels (such as ethanol) would offer an effective and immediate solution for decarbonizing the transportation sector under a well-designed policy.
  • He commented that ethanol could be used in light-duty vehicles, heavy-duty vehicles, rail fuels, marine fuels, and aviation fuels.
  • He noted how current corn ethanol already cuts greenhouse gas emissions by approximately 50 percent on average compared to gasoline.
• He remarked that the increased adoption of low-carbon farming practices, carbon capture, utilization, and storage (CCUS), and other technologies positions the U.S. ethanol industry to produce net-zero carbon corn ethanol.
  • He testified that the Renewable Fuels Association’s member companies have pledged that the ethanol that they produce will achieve a 70 percent greenhouse gas reduction by 2030 (compared to gasoline) and a net-zero carbon footprint by 2050 or sooner.
• He discussed how several states have already implemented their own clean fuel policies and mentioned how several countries are beginning to implement their own clean fuels programs.
• He stated that while existing state programs (such as the California LCFS program) have been successful in terms of reducing greenhouse gas emissions and driving investments in fuel improvements, he asserted that certain design shortcomings had at times undermined the technology neutral intent of said programs.
  • He also commented that these design shortcomings had limited the ability of some low-carbon fuels to provide greater greenhouse gas emission reduction benefits.
• He testified however that ethanol and other liquid biofuels have accounted for nearly three-quarters of the total carbon reductions that have been achieved under the California LCFS program since the program’s inception in 2011.
• He then remarked that a potential national clean fuels program would need to be designed in a fashion that avoids picking technology winners and losers and that drives the greatest greenhouse gas emission reductions at the lowest cost.
• He proposed several criteria for any potential national clean fuels program.
  • He first stated that such a program should use consistent science-based and transparent life cycle analysis methodologies, such as the U.S. Department of Energy’s Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model, for determining the carbon intensity of all fuel and vehicle options.
  • He then stated that such a program should set clear and predictable annual greenhouse gas emissions reductions requirements and abide by these targets.
  • He also stated that such a program should adopt rules for credit generation that are consistent across all fuel and vehicle pathways.
  • He further stated that such a program should include flexibility for low-carbon fuel producers to demonstrate process improvements and carbon intensity reductions across their entire supply chains.
  • He lastly stated that such a program should include complementary measures to remove technical and regulatory barriers that artificially limit greater use of certain low-carbon fuel options.
• He concluded that a well-designed national fuel program has “enormous” potential to quickly reduce greenhouse gas emissions from the transportation sector and help the U.S. to achieve net-zero greenhouse gas emissions by 2050.

Ms. Chris Spear (American Trucking Association):

• He first recounted how his organization, the American Trucking Association, had been a “proud supporter” of the IIJA.
  • He asserted that the U.S.’s decaying infrastructure had provided rising global powers (like China) with competitive aid.
  • He thanked Congress for recognizing his organization’s concerns and for passing the IIJA.
• He discussed how the IIJA could help to reduce congestion within the U.S.’s infrastructure system and noted how the trucking industry currently loses $75 billion each year sitting idle in traffic.
  • He indicated that this traffic results in 6.87 billion gallons per year being wasted, which amounts to 67.3 million metric tons of carbon dioxide being pumped into the environment.
• He remarked that federal policymakers seeking to eliminate carbon emissions should focus on addressing the U.S.’s top 100 traffic bottlenecks.
  • He highlighted how 22 of these bottlenecks are in states represented on the Committee.
• He asserted that IIJA funds are “more than adequate” for fixing existing roads and bridges and stated that these funds could also support new infrastructure capacity.
  • He commented that this new capacity could include truck-only lanes, bypasses, bridges, and parking.
• He then mentioned how the American Trucking Association had worked with the EPA on Phase 1 and Phase 2 greenhouse gas emissions reduction rules.
  • He testified that 98.5 percent of all emissions have been removed from tailpipes to date and indicated that the emissions of one truck in 1988 is equivalent to the emissions of 60 trucks today.
  • He noted that these two rules alone have cut carbon dioxide emissions by 1.37 metric tons, have saved $220 billion in fuel costs, and have reduced oil consumption by 2.5 billion barrels of oil.
• He also discussed how the American Trucking Association had worked with the EPA to create the SmartWay program, which has saved participating fleets more than 4 billion gallons of fuel.
  • He commented that these fuel savings have resulted in “massive” emission reductions of 2.7 million short tons of nitrogen oxide, 112,000 tons of particulate matter, and 143 million metric tons of carbon dioxide.
• He predicted that the U.S. will achieve its net-zero greenhouse gas emissions goals and commented that California’s exclusion of the trucking industry from its emissions reduction efforts undermines this effort.
  • He warned that California’s policies would prevent the U.S. from developing the necessary rare materials for truck batteries, the necessary truck charging infrastructure, and the electricity needed to power EVs.
• He noted how trucking now moves 72.5 percent of the U.S.’s freight tonnage and indicated that trucks will be tasked with moving 2.4 billion more tons of freight over the next decade.
• He called on the U.S. to target IIJA funds to reduce congestion, create cost parity between current and future equipment and fuel sources, and address drayage, port intermodal connectors, and truck parking.

Congressional Question Period:

Full Committee Ranking Member Shelley Moore Capito (R-WV):

• Ranking Member Capito noted how diesel prices had reached record highs in June 2022. She asked Mr. Spear to address how high diesel prices impact the U.S. trucking industry (particularly the industry’s small businesses).
  • Mr. Spear remarked that high fuel prices have a “significant” impact on the U.S. trucking industry. He noted how fuel constitutes the U.S. truck industry’s second greatest cost behind labor and commented that recent inflation has spiked the industry’s costs. He mentioned how the American Trucking Association has filed legal challenges against the California and Oregon LCFS programs because these programs would impose significant costs on the U.S. trucking industry. He stated that these costs are particularly pronounced in small businesses that either maintain 20 or fewer trucks or are owner-operator businesses.
• Ranking Member Capito asked Mr. Spear to clarify whether the American Trucking Association’s litigation remains ongoing.
  • Mr. Spear answered affirmatively.
• Ranking Member Capito asked Mr. Spear to indicate whether the California and Oregon LCFS programs are leading to higher fuel prices in those states.
  • Mr. Spear answered affirmatively. He noted how small carrier and owner-operator businesses do not have fuel contracts, which means that these businesses must pay retail prices for fuel. He expressed concerns that higher fuel prices will force many smaller trucking businesses to consolidate.
• Ranking Member Capito then discussed how EVs and hydrogen cars require a large variety of input materials. She asked Mr. Graff to indicate whether Air Liquide has performed a life cycle analysis of the hydrogen and other input materials needed for these types of vehicles.
  • Mr. Graff remarked that life cycle analyses are key elements of energy production efforts. He noted how Air Liquide has produced, transported, and used hydrogen for over 60 years. He stated that Air Liquide could ensure that hydrogen is well-managed and well-contained. He discussed how Air Liquide works to ensure that hydrogen’s fugitive emissions are second order and emphasized the company’s safety protocols. He also noted that any fugitive emissions of hydrogen into the atmosphere have a much smaller effect than other hydrocarbons or substances that may end up in the environment.
• Ranking Member Captio also noted how ethanol production involves significant energy expenditures. She asked Mr. Cooper to address the life cycle emissions and costs associated with ethanol production.
  • Mr. Cooper expressed the Renewable Fuels Association’s support for using life cycle analyses to assess the carbon intensity of all fuel pathways. He indicated that while EVs are often described as zero-emissions vehicles, he stated that this description ignores all of the upstream emissions associated with electricity production. He noted how the U.S. Department of Energy performs life cycle analyses of ethanol production that consider the energy used in farming, harvesting, and processing. He stated that corn ethanol has an emissions footprint that is about 50 percent lower than gasoline based on these U.S. Department of Energy life cycle analyses.
• Ranking Member Capito then asked Mr. Graff to indicate whether there currently are any personal hydrogen vehicles in California.
  • Mr. Graff testified that there have been 15,000 hydrogen fuel cell vehicles sold into the Californian market. He mentioned how Air Liquide had built the first ever liquid hydrogen production facility and indicated that this facility could provide renewable hydrogen. He noted that Air Liquide had worked with automotive companies on this endeavor.
• Ranking Member Capito asked Mr. Graff to indicate the cost of a hydrogen vehicle.
  • Mr. Graff estimated that a hydrogen vehicle generally ranges between $50,000 and $60,000 based on the make and model.
• Ranking Member Capito interjected to ask Mr. Graff to indicate whether hydrogen vehicles are heavy.
  • Mr. Graff stated that hydrogen vehicles are light and noted how battery powered EVs weigh more than hydrogen vehicles.
• Ranking Member Capito commented that EVs tend to be heavier than non-EVs.
  • Mr. Graff stated that hydrogen vehicles have similar weights to currently available vehicles.

Sen. Debbie Stabenow (D-MI):

• Sen. Stabenow first mentioned how there are currently several joint-ventures underway in her state of Michigan to develop hydrogen fuel cell vehicles. She then discussed how the lifespans of cars are increasing, which means that traditional internal combustion cars are unlikely to go away within the near term. She asked Mr. Cooper to indicate whether the U.S. would need to secure a robust supply chain of low- and zero-carbon liquid fuels to complement its move towards vehicle electrification.
  • Mr. Cooper remarked that the U.S. needs to embrace the use of low-carbon liquid fuels to meet its net-zero carbon emissions goals. He noted how the full electrification of the U.S.’s vehicle fleet would take decades to complete and asserted that the U.S. must take actions in the immediate term to further decarbonize liquid fuels. He commented that a clean fuels program would support these decarbonization efforts for liquid fuels.
• Sen. Stabenow asked Mr. Cooper to indicate whether a clean fuels program should either complement or replace the current RFS program.
  • Mr. Copper remarked that a well-designed clean fuels program should complement the current RFS program.
• Sen. Stabenow asked Mr. Cooper to discuss how Congress’s recent investments (including those from the Inflation Reduction Act of 2022) would help the U.S. to achieve its emissions reduction goals.
  • Mr. Cooper expressed the renewable fuels industry’s excitement regarding the Inflation Reduction Act of 2022 and its various tax credits and grant programs. He specifically mentioned how the law had created the Section 45Z Clean Fuel Production Credit, which he described as the tax version of a clean fuel standard. He explained that this provision would provide a tax credit to clean fuel producers based on the carbon intensity of their fuel. He noted how this tax credit would become more powerful for lower carbon intensity fuels. He stated that the Section 45Z Clean Fuel Production Credit is already influencing the renewable fuels industry’s investments. He also mentioned how the Inflation Reduction Act of 2022 had expanded and extended tax credits that promote carbon capture and sequestration. He further mentioned how the law had established a $500 million grant program for biofuels infrastructure. He concluded that the Inflation Reduction Act of 2022 had supported the development of low-carbon renewable fuels.
• Sen. Stabenow mentioned how she had helped to author the Inflation Reduction Act of 2022’s provisions related to biofuels infrastructure. She then asked Mr. Cooper to discuss how renewable fuels help drivers to save money on gasoline.
  • Mr. Cooper mentioned how ethanol had sold for less money relative to gasoline at the wholesale level during the summer of 2022. He stated that blending more ethanol into gasoline would reduce consumer gasoline prices. He discussed how the lowest cost retail options at gasoline stations are currently the fuels with the highest amounts of ethanol content. He stated that California’s LCFS program is driving down fuel costs through encouraging the use of ethanol blends in gasoline.

Sen. Pete Ricketts (R-NE):

• Sen. Ricketts remarked that ethanol will save consumers money on gasoline, help the environment, and create U.S. jobs. He asserted that ethanol must be central to any policy discussion regarding the future of transportation fuels. He applauded the EPA’s recent decision to permit the sale of E15 and commented that this decision had helped to alleviate inflation challenges for many American consumers. He also noted how the use of ethanol-blended fuels has led to the reduction of nearly 1 billion metric tons of carbon dioxide and equivalent greenhouse gas emissions between 2008 and 2020. He indicated that corn ethanol is 46 percent less carbon intensive than gasoline. He then discussed how ethanol creates economic opportunities for Americans (especially in his state of Nebraska). He also highlighted how one of the byproducts of ethanol production could be used to produce livestock feed. He then noted that California had classified EVs as zero-emissions vehicles and had classified biofuel-powered vehicles as low-emissions vehicles. He asked Mr. Cooper to discuss how a national clean fuels program would impact the use of biofuels. He also asked Mr. Cooper to address how a clean fuels program would interact with the existing RFS program.
  • Mr. Cooper remarked that a well-designed national LCFS program or clean fuels program would complement the RFS program. He stated that the RFS program had been designed to promote the U.S.’s energy independence and that a clean fuels program would seek to reduce the U.S.’s emissions. He commented that the RFS program has served as the foundation for the renewable fuels industry and called it important for the U.S. to maintain this foundation. He then predicted that the biofuels industry would respond to a national clean fuels program in a similar manner to how the industry had responded to the California and Oregon LCFS programs. He noted how the California LCFS program is driving significant E85 consumption within the state. He also stated that the California LCFS program is creating market demand for biofuels, which is in turn leading California to pursue the approval of E15. He concluded that a well-designed national clean fuels program would drive increased use of ethanol and other renewable fuels above and beyond what is required under the federal RFS program.
• Sen. Ricketts then expressed concerns that a federal clean fuels program could prioritize EVs over liquid fuels vehicles (including clean biofuels vehicles). He stated that this prioritization would only make the U.S. more dependent on foreign adversaries that control the production of key components for EVs. He mentioned how the CCP maintains significant control over global lithium mining, processing, and refining. He added that the CCP controls 75 percent of lithium-ion battery mega factories. He asked Mr. Cooper to address how the U.S. could ensure that a new national LCFS program would not prop up the EV industry at the expense of the liquid fuels industry.
  • Mr. Cooper expressed confidence that properly conducted life cycle analyses and properly developed carbon intensity scores would enable renewable fuels to fairly compete with EVs on the basis of projected carbon emissions reductions. He also highlighted how conventional vehicles are “far less” expensive than EVs. He noted how renewable fuels are the lowest cost option for consumers and predicted that market forces would therefore lead to the increased use of renewable fuels. He called on the U.S. to pursue a technology neutral LCFS program.

Sen. Ben Cardin (D-MD):

• Sen. Cardin remarked that low-carbon emission fuels would play a key role in addressing climate change. He discussed how his state of Maryland had recently taken advantage of several of the IIJA’s opportunities. He mentioned how Maryland had received three major grants under the law’s Low or No Emission Vehicle Program and indicated that these grants are supporting hydrogen production sites and hydrogen fuel cell, electric, and diesel-electric hybrid buses. He added that Baltimore is receiving funding for electric school buses under the law’s Clean School Bus Program. He then asked Mr. Graff to identify the potential limits of hydrogen as a source for transportation energy.
  • Mr. Graff noted how hydrogen is a very versatile molecule and asserted that hydrogen would be key to enabling the U.S. to achieve its energy policy objectives. He mentioned how there are estimates that hydrogen will account for 20 percent of the world’s energy supply by 2050. He remarked that the U.S. could use hydrogen to decarbonize energy intensive industries and the transportation sector. He stated that hydrogen could be paired with fuel cells to power vehicles and commented that these vehicles could function similarly to existing vehicles. He remarked that the U.S. would need to develop the necessary infrastructure and demand for hydrogen vehicles.
• Sen. Cardin mentioned how Congress had provided incentives for the development of hydrogen vehicles under the Inflation Reduction Act of 2022. He asked Mr. Graff to discuss additional actions that Congress would need to take to support the development of hydrogen vehicles.
  • Mr. Graff noted that the Inflation Reduction Act of 2022 supports hydrogen production capabilities using several pathways, including renewable power and natural gas with carbon capture. He remarked that U.S. policymakers should now work to further incentivize the use and development of hydrogen vehicles.
• Sen. Cardin then asked Mr. Spear to provide policy recommendations for reducing carbon emissions of heavy-duty trucks.
  • Mr. Spear remarked that the U.S. must provide incentives to increase the deployment of safer and more environmentally friendly vehicles. He thanked Sen. Cardin for his efforts to repeal the 12 percent federal excise tax on heavy trucks and trailers. He asserted that the current tax is outdated and makes it more expensive to adopt and manufacture new vehicles.

Sen. Jeff Merkley (D-OR):

• Sen. Merkley asked Mr. Cooper to indicate whether the Oregon Clean Fuels Program should be considered a success.
  • Mr. Cooper remarked that the Oregon Clean Fuels Program has been “very successful.”
• Sen. Merkley asked Mr. Cooper to identify any lessons or insights from the Oregon Clean Fuels Program that should inform the development of similar programs.
  • Mr. Cooper remarked that the Oregon Clean Fuels Program should serve as a model for states seeking to develop their own LCFS programs. He specifically applauded the life cycle analysis, modeling, and methodology of the Oregon Clean Fuels Program for being transparent and technology neutral.
• Sen. Merkley then expressed interest in blue hydrogen, which is hydrogen produced from fossil gas with carbon capture. He mentioned how a 2021 peer reviewed study had found that the use of blue hydrogen for energy is 20 percent more damaging in terms of greenhouse gas emissions than the use of fossil gas or coal for heating buildings. He also mentioned how this 2021 study had found that blue hydrogen is 60 percent more damaging in terms of greenhouse gas emissions than the use of diesel gasoline for heating buildings. He asked Mr. Graff to respond to these findings regarding blue hydrogen.
  • Mr. Graff testified that he is not familiar with the study that Sen. Merkley is referencing. He expressed his willingness to review the study and provide a follow-up response to Sen. Merkley’s question. He then remarked that the use of large-scale production of certain low-carbon hydrogen technologies (such as autothermal reformers) could support the decarbonization of entire energy intensive industrial sites. He stated that the integration of these technologies into local infrastructure systems could further support these decarbonization efforts. He further highlighted how the use of hydrogen in fuel cells has a very different dynamic than the use of hydrogen in combustion engines.
• Sen. Merkley noted how many EV policy conversations have focused on how the electricity powering these vehicles is produced. He asserted that policymakers must also consider how hydrogen is produced. He stated that the name “blue hydrogen” is meant to conceal its negative environmental impacts. He also suggested that the aforementioned study had likely understated the greenhouse gas emissions of blue hydrogen because the study had assumed that the carbon capture process would be run perfectly. He called this assumption unrealistic. He stated that blue hydrogen produced from electrolysis has a “profoundly different footprint” than hydrogen produced from hydraulically fractured methane gas. He remarked that policymakers should be cognizant of the various forms of hydrogen gas in existence and noted that these different forms range in terms of life cycle greenhouse gas emissions. He stated however that hydrogen could potentially be used to power high-temperature applications and noted how electricity did not work directly in these high-temperature settings. He concluded that there exists variance across hydrogen and hydrogen hubs.

Sen. John Fetterman (D-PA):

• Sen. Fetterman noted how many Pennsylvanians are employed in energy production industries and expressed interest in ensuring that transitions to cleaner energy sources would not harm middle class workers. He asked the witnesses to identify any barriers for fossil fuel sector workers that could inhibit their transitions to careers in renewable fuel production.
  • Mr. Graff remarked that the evolution of hydrogen (both from a low-carbon standpoint and a renewable standpoint) will create many value-added jobs in the U.S. economy. He mentioned how there are estimates indicating that the U.S.’s utilization of hydrogen will create about $140 billion of additional revenue in the economy and about 700,000 value-added jobs. He stated that the skills, competencies, and capabilities for these jobs are readily available. He added that Air Liquide would train workers for these jobs when needed. He further stated that hydrogen production facilities and the use of hydrogen would result in a cleaner environment.

Sen. Cynthia Lummis (R-WY):

• Sen. Lummis expressed concerns that the establishment of a federal LCFS program would galvanize efforts to enact an “anti-consumer regulatory scheme.” She commented that these schemes could involve the phasing out of liquid fuels through electrification mandates or the banning of heavy-duty diesel engines. She asked Mr. Spear to indicate whether he shared these concerns. She also asked Mr. Spear to indicate whether the states that have enacted LCFS programs had pursued these types of schemes.
  • Mr. Spear mentioned how the American Trucking Association had filed legal challenges to the California and Oregon LCFS programs and stated that these programs would harm the trucking industry. He specifically discussed how these state LCFS programs would harm small trucking businesses and noted how these businesses tend to pay retail prices for gasoline. He warned that these state LCFS programs would significantly inflate the price of diesel fuels for these trucking businesses. He noted that fuel constitutes the second largest cost for trucking businesses and asserted that high fuel prices could lead many trucking businesses to fail. He also stated that trucking businesses will likely pass along these higher fuel costs to their end-consumers in the form of higher prices for their services. He further commented that these high fuel prices are exacerbating the existing challenges afflicting trucking businesses stemming from inflation. He lastly mentioned how California and Oregon had the highest fuel prices in the U.S. and attributed these high fuel prices to their LCFS programs.
• Sen. Lummis mentioned how President Biden had recently remarked in his State of the Union Address that the U.S. would continue to need liquid fuels for at least the next ten years. She asked Mr. Spear to indicate whether he agrees with President Biden’s statement.
  • Mr. Spear remarked that the U.S. would likely continue to need liquid fuels for more than ten years. He commented that while the U.S. would eventually acheive net-zero greenhouse gas emissions, he asserted that the timeline for this transition must be realistic. He stated that a “mad rush” to net-zero greenhouse gas emissions would have significant economic impacts.
• Sen. Lummis noted how EVs tend to be tested at sea level, on flat ground, and at temperatures between 60 and 70 degrees Fahrenheit. She commented these conditions are generally not applicable to her state of Wyoming. She stated that seal level, terrain, and temperature could significantly impact the distance that a person could drive in an EV using a single charge. She expressed interest in ensuring that these factors are addressed in future EV testing. She then discussed how the EPA had recently proposed its RFS “Set” rule, which establishes RVO limits for the next three years. She also mentioned how this proposed rule would create a pathway for EVs to participate in the RFS program. She expressed concerns over the EPA’s proposal for how automotive original equipment manufacturers (OEMs) could generate e-RINs under this rule. She asked Mr. Cooper to opine on this EPA proposal.
  • Mr. Cooper indicated that while the Renewable Fuels Association is not opposed to incorporating electricity into the federal RFS program, he asserted that such an inclusion must be properly executed. He expressed concerns that the generator of e-RIN credits under the EPA’s proposed RFS “Set” rule would be automotive manufacturers. He asserted that this approach is inconsistent with RIN credit generation rules for other types of fuels under the RFS program. He also expressed concerns that the EPA’s proposed RFS “Set” Rule would allow for automotive manufacturers to benefit from book and claim accounting. He explained that this accounting system would enable automotive manufacturers to sign contracts with remote renewable electricity producers and claim carbon reduction benefits from these producers, regardless of whether the produced electricity is ever used to fuel an EV.
• Sen. Lummis expressed interest in further discussing these concerns with Mr. Cooper. She then asked Mr. Cooper to indicate whether the EPA’s proposed RFS “Set” Rule is consistent with Congressional intent.
  • Mr. Cooper remarked that Congress had intended for the RFS program to stimulate the production and use of renewable fuels at the time of the program’s enactment. He asserted that Congress had not intended for the RFS program to be used to stimulate the production and use of certain vehicle technologies.
• Sen. Lummis asked Mr. Cooper to indicate whether it had been appropriate for the EPA to combine their e-RINs rulemaking with their RVO limit rulemaking.
  • Mr. Cooper noted that the Renewable Fuels Association had requested that the EPA remove the e-RINs section of the proposed RFS “Set” rule from the rule. He stated that the EPA should finalize its proposed RVO limits and spend more time developing its e-RINs proposal.

Sen. Alex Padilla (D-CA):

• Sen. Padilla remarked that the California LCFS program is helping to advance a wide range of clean fuels while keeping consumer fuel costs low. He stated that the California LCFS program’s technology neutral approach and cost containment mechanisms have proved certainty and flexibility. He remarked that the California LCFS program’s success is leading other jurisdictions to pursue similar programs. He mentioned how California had joined the Pacific Coast Collaborative, which he explained is a regional agreement between British Columbia, California, Oregon, and Washington to strategically align policies to reduce greenhouse gas emissions and promote clean energy. He asked Mr. Graff to discuss how the California LCFS program provides certainty and flexibility to industry stakeholders.
  • Mr. Graff remarked that the California LCFS program had driven the introduction of zero-emission vehicles and noted how the program is agnostic about the pathways and technologies that could be used to achieve these zero-emission goals. He stated that sustainability has long been a key component of Air Liquide’s culture and asserted that the use of hydrogen would be key to achieving climate change policy goals. He discussed how Air Liquide provides automotive manufacturers with renewable hydrogen for hydrogen fuel cell vehicles. He mentioned how Air Liquide had developed a $250 million liquid hydrogen plant in Nevada to meet the needs of automotive manufacturers. He testified that this Nevada plant uses both renewable power and biogas to produce renewable hydrogen.
• Sen. Padilla asked Mr. Graff to confirm that the establishment of the California LCFS program had influenced where Air Liquide would make its investments in clean hydrogen production.
  • Mr. Graff remarked that the California LCFS program had “clearly enabled” the introduction of zero-emissions vehicles. He stated that Air Liquide had sought to locate its hydrogen production facilities as close to the market as possible. He commented that this location decision had addressed logistic concerns and had created community jobs.
• Sen. Padilla then asked Mr. Cooper to elaborate on the Renewable Fuels Association’s pledge to achieve net-zero carbon emissions by 2050. He also asked Mr. Cooper to discuss how state LCFS programs may have contributed to biofuels innovation.
  • Mr. Cooper mentioned how the Renewable Fuels Association’s members have pledged to achieve net-zero carbon emissions by 2050 or sooner. He testified that these members are already taking actions to achieve this goal. He noted how ethanol currently reduces greenhouse gas emissions by about 50 percent compared to gasoline. He stated that the adoption of carbon capture and sequestration, lower carbon farming practices, and renewable natural gas would reduce the carbon intensity of corn ethanol. He expressed confidence in the Renewable Fuels Association’s ability to achieve its carbon emissions reduction goals. He then remarked that California and Oregon LCFS programs are driving investments in new technologies to reduce the carbon intensity of ethanol fuels. He suggested that the establishment of a federal LCFS program could drive reductions in the transportation sector’s carbon emissions.

Sen. Markwayne Mullin (R-OK):

• Sen. Mullin mentioned how California had proposed replacing diesel trucks with EVs. He asked Mr. Spear to discuss how California’s proposed policy has impacted vehicle prices.
  • Mr. Spear remarked that California’s proposed policy is putting “immense pressure” on the sale of both new and used trucks. He also stated that this proposed policy is making newer, safer, and more environmentally friendly equipment less available.
• Sen. Mullin noted how electric trucks would be heavier than diesel trucks. He stated that the introduction of large numbers of electric trucks would force policymakers to decide between increasing the weight limits for trucks (which would pose safety concerns) or having more trucks on the road (which would increase road congestion). He asked the witnesses to indicate whether there were any studies that investigated the potential road congestion problems associated with electric trucks and how these congestion problems would impact carbon emissions.
  • Mr. Spear first mentioned how the American Transportation Research Institute (ATRI) had investigated this issue. He then discussed how the batteries for electric trucks can weigh over 5,000 pounds and will require significant amounts of lithium, graphite, and cobalt. He noted that these critical minerals are not readily available in the U.S. and stated that the U.S. would need to identify sources for these critical minerals. He also remarked that the U.S. currently lacks sufficient EV charging infrastructure and the necessary electricity to support EVs. He mentioned how ATRI had found that the U.S. would need to devote 40 percent of its current electricity capacity to charge all trucks and cars currently on the road. He asserted that policymakers must address the aforementioned issues before they pursue aggressive EV rollouts. He further raised concerns that California’s EV policies would influence EV standards for the entire U.S. and called on the federal government to establish a national framework for EV rollouts.
• Sen. Mullin noted how the average U.S. house has a 200-amp service and indicated that a house would need a 400-amp service to charge two standard EVs overnight. He mentioned how he had owned a business that possessed over 300 vehicles and commented that the power needed to charge all of these vehicles overnight would be immense. He stated that California’s proposals to promote EV deployments are failing to account for the energy demands stemming from these proposals. He noted how California already has rolling blackouts and warned that greater EV deployments would exacerbate these energy issues for the state. He expressed interest in working on a bipartisan basis to address these long-term energy needs and goals.

Sen. Cynthia Lummis (R-WY):

• Sen. Lummis asserted that permitting reforms would be necessary for the U.S. to meet its carbon emissions reduction goals. She mentioned how her state of Wyoming is home to one of the U.S.’s largest wind energy facilities and noted how it had taken ten years for the owner of this facility to acquire the transmission line right of way. She indicated that this facility still requires additional permitting. She concluded that the permitting issues associated with the construction of transmission lines serve as a barrier to the deployment of EV.

Full Committee Chairman Tom Carper (D-DE):

• Chairman Carper expressed agreement with Sen. Lummis’s comments regarding the importance of permitting reforms and mentioned how the U.S. Senate had failed to advance permitting reforms during the previous 117th Congress. He expressed optimism that the Biden administration would work with Congress to advance permitting reform efforts in the current 118th Congress. He also expressed optimism that Congress could pursue bipartisan permitting reforms. He then noted how there are currently states that have implemented or are considering LCFS programs that are technology neutral and provide greater flexibility and certainty than the current RFS program. He stated that the Oregon LCFS program had successfully advanced cleaner fuel usage, kept consumer fuel costs low, and supported local job creation. He also noted how Oregon now have lower fuel prices than its surrounding states. He asked Mr. Graff and Mr. Cooper to identify lessons learned from state LCFS programs that should guide the development of a national clean fuels program. He also asked Mr. Graff and Mr. Cooper to discuss how state LCFS programs are protecting the interests of consumers.
  • Mr. Graff remarked that policy certainty is necessary for facilitating private sector investments into renewable and low-carbon fuels production and infrastructure. He commented that these private sector investments tend to be long-term in nature and involve the construction of expensive facilities. He also stated that federal policies should provide the private sector with flexibility to choose the best fitting solutions for their ecosystems. He noted how abundant wind power, solar power, and hydropower could enable the production of hydrogen with electrolysis using water. He noted how abundant natural gas and the ability to store carbon in subsurface geological structures could enable the production of hydrogen with carbon capture. He added that the byproduct liquid produced through this process could support local chemical industry jobs. He lastly remarked that public policies should be technology neutral. He stated that the U.S. should empower companies to determine which types of fuels would be the most suitable for meeting the needs of their local economies.
  • Mr. Cooper remarked that a national clean fuels program should set clear and predictable carbon intensity reduction requirements and then adhere to them. He commented that the U.S. should not backtrack from or retroactively change these requirements. He also emphasized the importance of life cycle analysis in clean fuels programs and commented that this analysis should employ consistent, transparent, and science-based methodologies. He identified the U.S. Department of Energy’s GREET model as an example of a strong life cycle analysis methodology.
• Chairman Carper then discussed how the recent fuel price spikes stemming from Russia’s invasion of Ukraine demonstrate that global markets drive fuel prices. He stated that the volatile global oil market creates economic uncertainty and puts pressure on U.S. families and businesses. He asserted that no amount of domestic oil exploration and extraction could overcome these global pressures. He contended that the best way to respond to these global pressures is to reduce demand for oil through the adoption of new fuel technologies. He stated that clean hydrogen constitutes an example of a low-carbon fuel that can be produced domestically from renewable fuel resources, including wind, solar, and biomass. He asked Mr. Graff to address how the use of hydrogen and low-carbon transportation fuels helps to strengthen the U.S.’s national energy security.
  • Mr. Graff remarked that the U.S. should view hydrogen and low-carbon transportation fuels as additive in nature. He asserted that hydrogen would help to both satisfy growing global demands for energy and support the development of low-carbon and renewable energy sources. He discussed how hydrogen is very versatile and noted how hydrogen could support decarbonization efforts in energy intensive industries and the transportation sector. He also highlighted how hydrogen could serve as fuel for personal vehicles, commercial vehicles, and tractor trailers. He further stated that the transition to hydrogen fuels for the aforementioned vehicle types will not impact the vehicle’s range of drivability, refueling experience (in terms of time), weight, and size. He added that temperature does not impact the functioning of hydrogen vehicles.
• Chairman Carper then mentioned how Consumer Reports had asserted that a clean fuels program would help to alleviate high gas prices through providing more fuel options for consumers that are not tied to fluctuating oil prices. He asked Mr. Graff to indicate whether he agreed with this assertion from Consumer Reports.
  • Mr. Graff remarked that a market-based and technology neutral flexible program would create low-cost fuel solutions for consumers. He stated that consumers ultimately want fuel to be available, cheap, and clean and asserted that these considerations must inform any policies.
• Chairman Carper then asked Mr. Spear to comment on the potential for using hydrogen in larger vehicles, trucks, and buses.
  • Mr. Spear remarked that there is a “tremendous” amount of innovation occurring within the trucking industry and highlighted how much of this innovation is occurring domestically. He stated that the trucking industry is technology neutral and would gravitate toward different types of energy and fuel sources that fit its business models. He mentioned how ports tend to have confined equipment and commented that the drayage segment of the trucking industry is well-suited for electrification efforts. He asserted however that these fuel and energy transition efforts should be done prudently so as to not overwhelm smaller businesses. He noted how electric trucks and hydrogen trucks are more expensive than conventional diesel trucks. He reiterated his concerns that the timelines for the California and Oregon LCFS programs are too aggressive. He then discussed how temperature did not impact hydrogen fuels, which could make these fuels well-suited for the U.S.’s varying climates.
• Chairman Carper then asked the witnesses to identify policy areas where there exists general agreement across stakeholder groups.
  • Mr. Cooper remarked that there has been agreement at the hearing regarding the need to invest in technologies that will reduce carbon emissions and dependence on petroleum (especially imported petroleum). He stated that a properly structured clean fuels program would support these efforts.
  • Mr. Spear remarked that there is broad interest in working to reduce carbon emissions and called for the establishment of standards that are achievable. He stated that there exists broad agreement that these policies should be technology neutral and market driven, which necessitates that the policies be inclusive. He noted how the U.S. trucking industry serves 72.5 percent of the U.S.’s domestic freight. He expressed confidence that the U.S. would achieve its carbon emissions reduction goals so long as the goals are pursued in a prudent manner.
  • Mr. Graff remarked that there exists broad agreement regarding the need for innovation and regulatory clarity, certainty, and flexibility to satisfy the needs of consumers and the U.S. He expressed Air Liquide’s commitment to ensuring the U.S.’s long-term prominence in innovation and energy production. He also expressed Air Liquide’s commitment to supporting its communities through job creation.
• Chairman Carper then discussed how the growth of the EV industry has been significant over the previous decade and noted how there now exist a wide variety of EVs. He lastly remarked that clean fuels help to safeguard the U.S.’s energy security, boost economic opportunities for farmers, and reduce greenhouse gas emissions. He noted how the federal RFS program has not updated in over a decade and called on the U.S. to revisit its national fuels policy.