Farm Industry News Blog

Coalition pushes legislation to counter corn prices; what are your thoughts?

The Domestic Fuel Solutions Group (DFSG), a coalition which includes agricultural, food industry, dairy and livestock interests, supports a new bill that proposes to include natural gas in the Renewable Fuel Standard (RFS). The biofuels industry sees this as another ploy to modify or repeal the RFS.

 

The Domestic Alternative Fuels Act of 2013 (HR 1959) was introduced in the House of Representatives this week proposing to allow energy and fuel industries to use alternative feedstocks (such as ethanol derived from natural gas) to satisfy their obligations under the federal Renewable Fuels Standard (RFS). The legislation was introduced by Rep. Pete Olson (R-TX) and Rep, Jim Costa (D-CA).

 

The RFS currently limits the feedstocks eligible to produce conventional ethanol to renewable sources like corn. The Domestic Fuel Solutions Group (DFSG), a coalition of business, transportation, agricultural, food industry, dairy, livestock and state legislative interests, supports the bill. DFSG contends that increasing mandates for corn ethanol plus the recent drought “have put enormous pressure on corn supplies and prices, severely impacting the fuel, agriculture, livestock, transportation and food service industries and creating hardship for consumers who depend on affordable corn and fuel prices.”

 

“With efforts to secure waivers to the RFS or repeal it altogether unable to gain traction in Washington, D.C., Congress is now taking a more moderate approach in the hopes that reasonable modification of the RFS will see strong bipartisan support, the DFSG reports.

 

“Modifying the RFS to add ethanol from sources like natural gas would not only benefit our producers, but as one of the largest natural gas-producing states in the country, it would also strengthen our state's economy," said Adam McClung, executive vice president, Arkansas Cattlemen's Association, a coalition member.

 

“We're not looking to take corn out of ethanol or replace the advanced biofuels program,” said Seth Jacobson, executive director, DFSG. "We're all for having a full diversity of sustainable, low cost and environmentally friendly resources available to make alternative fuel. Allowing natural gas into the RFS is a reasonable solution that aligns perfectly with the 'all of the above' approach while reducing our dependence on foreign oil. That's why we're supporting HR 1959."

 

But, Michael Frohlich, spokesman for Growth Energy, contends, “Natural gas is a finite resource and has no place under the RFS. The RFS is for renewable fuels, not fossil fuels. To suggest that ethanol derived from natural gas would somehow alleviate a problem that does not exist shows the true motive behind this legislation, which is to undermine the true goal of producing greater amounts of sustainable biofuels made from renewable sources.”

 

Brian Jennings, executive vice president, American Coalition for Ethanol (ACE), agrees, "This is less about getting natural gas into the RFS than about repealing it.” Jennings points out that this has been about the sixth legislative bill in a month seeking to modify or repeal the RFS, and opponents are only going to get “more clever” if they fail in their efforts.

 

Jennings told Farm Industry News that a lot of rank and file livestock producers are not opposed to ethanol or the RFS, particularly those who are diversified into both livestock and row crops. Biofuels are helping corn and soybean producers to make more money from the market, particularly at a time when the federal government is reducing crop support programs, Jennings pointed out. “I wish that more rank and file livestock producers would tell their national organizations that they support ethanol,” he said, adding, “We’re not going back to $2/bushel corn.”

 

Bob Dinneen, president and CEO, Renewable Fuels Association, added, "Last time I checked, natural gas was not renewable."

 

Readers, what are your thoughts? Do you believe this legislation is another tactic for undermining ethanol? How are both petroleum prices and corn prices affecting you?

 

Discuss this Blog Entry 28

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