Farm Industry News Blog

Testimonies on RFS reveal “stakes have never been higher”

Testimonies from farmers, agricultural associations, biofuel organizations, the oil industry and environment groups fueled an EPA hearing on proposed reductions to the amounts of biofuels to be blended into the nation’s fuel supply for 2014.

Arlington, Va., the Internet and news rooms around the country have been ablaze today with diverse statements on the Renewable Fuel Standard and the EPA’s proposal to reduce the amount of biofuels to be blended into the nation’s fuel supply.

Proponents and opponents gathered in Arlington, Va., today for a public hearing on the EPA’s proposal to reduce the total 2014 RFS requirements from 18.15 billion gallons to 15.21 billion gallons. More than 140 people were scheduled to testify today.

“EPA’s proposal could mark a shift in momentum in the biofuels wars. Both sides know the stakes have never been higher,” wrote Darren Goode in Politico. That quote was borne out by numerous testimonies from individuals and organizations whose livelihoods will be affected by the EPA’s decision.

Gary Eischeid, general manager, POET Biorefining, Gowrie, IA, for example, said that he employs 44 people “to create the biofuels we need to move away from our addiction to oil.” Eischeid added, “My great hope is that someday, I can put out a sign that says, ‘Now Hiring’ for the cellulosic plant we will build if you stay committed to the vision of the RFS. My greatest fear . . . is that instead of a hiring sign, we may instead someday see a ‘For Sale’ sign outside our doors.”

Mike Cunningham, a soybean farmer from Bismarck, IL, and member of the American Soybean Association, stated, “The biomass-based diesel and total advanced biofuels levels set forth in the proposal are unnecessarily low and will stifle the growth and job creation potential demonstrated by the biodiesel industry over the past several years.”

The National Biodiesel Board (NBB) added that the EPA proposal “will lead to layoffs and plant closures nationwide as biodiesel refiners sharply scale back production.” Anne Steckel, NBB’s vice president of federal affairs, added that since July 2013, the biodiesel industry has displaced about two billion gallons of petroleum diesel. “You can’t cut it almost in half and expect jobs and businesses to survive,” she said. Steckel added, “What’s so frustrating about the proposal is that biodiesel is an EPA-designated advanced biofuel that has exceeded RFS targets.”   

The National Corn Growers Association (NCGA) is encouraging its members to send letters to the EPA letting the agency know that at a time when corn prices are falling, the EPA proposal could “make or break a farm and cause havoc in 2014 planting decisions.”  The NCGA noted that “if corn prices dropped to $3.50 per bushel, farmers and the rural economy would lose more than $10 billion.” It added, “A shock of this magnitude to agriculture markets would be particularly unwelcome given the unsettled and uncertain future of the farm bill.”

Meanwhile, Bob Greco, downstream group director, the American Petroleum Institute (API), testified that API members are concerned about the ethanol blend wall. “There are serious vehicle and retail infrastructure compatibility issues associated with the usage of gasoline containing ethanol in excess of 10 percent by volume,” he reported. Greco noted that, “Left untouched, the statutory mandates could cause fuel rationing, drive up the cost of diesel by 300 percent and the cost of gasoline by 30 percent by 2015, and lead to a $580 billion decrease in take-home pay for American workers.”

Chris Bliley, director, regulatory affairs, Growth Energy, argued that the “vast majority of gasoline dispensing equipment made since 2008 is warranted for ethanol blends as high as E15 and underground storage tanks made in the last 20 years are equipped to handle blends up to 100 percent ethanol.” Bliley also stated that nearly 80 percent of the vehicles on the road today are approved by EPA to use E15.

The EPA’s proposal, Bliley noted, “would also jeopardize the tremendous success our nation’s farmers have seen as a result of the certainty of the RFS with net farm income increasing by 51 percent while federal farm payments have decreased 57 percent.”

“As long as the RFS remains a de facto mandate for corn ethanol,” second-generation biofuels will not have a viable market in which they can compete, testified Alex Rindler, policy associate, Environmental Working Group (EWG). The EWG favors more emphasis on cellulosic ethanol and drop-in fuels. Rindler argued that corn ethanol’s impact has resulted in acres of wetlands and grasslands being plowed under to plant corn.

Have an opinion? Send you comments to EPA. The 60-day comment period ends on January 28, 2014.

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The Farm Industry News Blog features commentary from Willie Vogt, Jodie Wehrspann, Kathy Huting, Lynn Grooms, Daryl Bridenbaugh and Jeff Ryan.

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