U.S. Legislative Issues

EPA Accepting DERA Grant Proposals

The U.S. Environmental Protection Agency (EPA) is now accepting proposals for the FY 2016 Diesel Emissions Reduction Act (DERA) grant program for projects that achieve significant reductions in diesel emissions in terms of tons of pollution produced by diesel engines and diesel emissions exposure, particularly from fleets operating in areas designated by the Administrator as poor air quality areas. The total funding for this competitive opportunity is approximately $26 million.

The EPA will host informational webinars at 2:00 PM EST on both Tuesday, March 8 and Thursday, March 10. Applications must be submitted electronically to EPA through Grants.gov no later than Tuesday, April 26, 2016, at 4:00 p.m. (EST) in order to be considered for funding. For more information on this opportunity, click here.

Oil Lobby Sues EPA over Biofuel Requirements

On February 11, 2016, the American Petroleum Institute (API) filed suit against the U.S. Environmental Protection Agency (EPA) over the agency’s most recent biofuel requirements under the federal Renewable Fuel Standard (RFS), which requires refiners to blend corn-based ethanol with gasoline.

API says it is challenging the EPA for its failure to meet deadlines for the 2014 and 2017 biomass-based diesel standards and for mandating more cellulosic ethanol in 2016 than exists. The move follows a challenge filed by the American Fuel & Petrochemical Manufacturers (AFPM) on Feb. 10, which also said that the EPA has failed to comply with legal requirements for setting the annual biofuels targets.

The EPA is required by the RFS program to set targets annually for the volumes of renewable fuels fuel companies have to blend each year with gasoline and diesel. In November 2015, the EPA set targets for use for 2014-2016 that disappointed both biofuels and oil groups, following years of regulatory delay.

The API says the proposed 2016 ethanol volumes aren’t safe for most cars on the road and the mandate will push fuel costs higher and damage car engines. The oil group wanted the EPA to set the final ethanol mandate to no more than 9.7 percent of gasoline demand to help avoid the 10 percent ethanol blend wall, which refers to the difficulty in incorporating ethanol into the fuel supply at volumes exceeding 10 percent. Beyond 10 percent, the ethanol renders the blended fuel "incompatible with today’s engines, vehicles and the multi-billion dollar infrastructure" in the U.S., the AFPM and API say.

House Transportation Committee to Look at HTF Revenue Options

In a February 24 speech to the American Association of State Highway and Transportation Officials (AASHTO), House Transportation and Infrastructure (T&I) Committee member Sam Graves (R-MO) said the Committee is planning on taking a fresh look at the Highway Trust Fund (HTF) this spring to discuss sustainable, long-term revenue streams. Rep. Graves’ remarks are especially noteworthy in that he is the chair of the T&I Subcommittee on Highways and Transit and he said all funding options would be put on the table including a higher gas tax, increased tolling and mileage fees. According to AASHTO, Rep. Graves made clear that he thinks efforts will move toward a vehicle-miles-traveled (VMT) fee system.

Graves’ comments were made as part of a session that also included speeches by ranking T&I member Peter DeFazio (D-OR), Senate Environment and Public Works Committee (EPW) Chairman James Inhofe (R-OK) and EPW Ranking Member Barbara Boxer (D-CA). Rep. DeFazio too made mention of the need to provide a sustainable funding stream in his remarks, citing an upstream wholesale tax on the portion of oil used in transportation as his preferred option. Rep. DeFazio also noted Oregon’s VMT pilot program currently underway, but said issues of complexity and privacy might make instituting nationwide mileage fees difficult.

CBO Report: Tolls and Mileage Fees Superior to Gas Tax

Earlier this month, the Congressional Budget Office (CBO) released a report suggesting approaches Congress could consider to make highway spending more productive. The CBO said mechanisms like tolling, mileage fees or congestion pricing could be considered to fund transportation projects in lieu of relying mostly on gas tax revenue. The report comes after lawmakers relied on a package of approximately $70 billion in offsets from other areas of the federal budget to help pay for the recently completed highway bill, known as the FAST Act, which lasts until 2021.

"Charging drivers specifically for using roads would increase economic output by allowing highly valued transportation to move more quickly and more reliably," the study said. "Such pricing could take the form of per-mile charges (also known as vehicle-miles traveled, or VMT, charges), congestion charges, or tolls on Interstate highways."

"When faster travel and avoiding delays were a priority, drivers could opt to pay for the use of a less congested road, and when travel speed was less important, they could use a road with a lower fee or avoid paying a fee by using a road without one," the report continued. "Charges that varied by time of day or that differed by road would also affect economic activity by limiting congestion."

The Obama Administration and Republicans in Congress have in the past distanced themselves from both VMT fees and an increase in the gas tax. However, for the first time, federal funding was approved for VMT pilot programs in the new highway law. Section 6020 of the Fast Act specifically creates a $95 million, five-year grant program to pilot mileage-based user fees in states and regions across the country. The Mileage-Based User Fee Alliance (MBUFA), an organization in support of VMT fees, believes the additional federal funding will spur more states than just Oregon and California to pilot "this transformative road funding technique."

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