The Assembly Committee on Renewable Energy and Rural Affairs and Senate Committee on Rural Issues, Biofuels, and Information Technology this week held a joint hearing on companion bills – SB 279, introduced by Senator Pat Kreitlow (D-Chippewa Falls) and AB 408, introduced by Rep. Scott Suder (R-Abbotsford) – dealing with domestic biofuels.

The bills are the result of recommendations produced by the Joint Legislative Council Special Committee on Domestic Biofuels. The general purpose of the legislation is to promote domestic biofuels, and in particular, biofuels produced in Wisconsin.

While most of provisions in the bills are not controversial, two provisions garnered opposition from business groups. In particular, oil companies have concerns with a provision forcing refiners to offer gasoline free of ethanol so that dealers can blend the ethanol themselves. Oil companies argue that the blending of ethanol, which is required by federal law, should be done by refiners to ensure quality. Oil companies further argue that dealers may not have the technology to properly blend ethanol with gasoline, which could in turn lead to engine problems. In such circumstances the oil companies could be held liable even though they did not perform the blending.

In addition, the oil companies argue that on one hand the federal government mandates the amount of renewable fuel they are required to produce, and yet on the other hand Wisconsin would make it harder for them to meet this standard by forcing them to provide unblended fuel.

Another provision that raised concerns is the creation of annual sales goals for renewable fuels in Wisconsin equaling 110 percent of the state’s share of renewable fuel sales required nationally under the federal renewable fuel standard. Corn growers, who support the measure, argue that implementing such a standard is positive for Wisconsin corn growers and means less money going towards buying oil in foreign countries.

The Wisconsin Manufacturers & Commerce testified in opposition to the bill. WMC argued that the bill could lead to an extremely high ethanol mandate, which in turn would increase prices for consumers. In addition, WMC argued that the state’s fuel policy making should not be handed over to bureaucrats within the Department of Agriculture, Trade and Consumer Protection.