The Hagstrom Report

Agriculture News As It Happens


Biofuel leaders to congressional staff: Don’t intervene on the Renewable Fuel Standard

A coalition of renewable fuels leaders told congressional staff today that even though the Environmental Protection Agency did not issue volumetric requirements for renewable fuels in 2014, Congress should not change the law.

“The last thing we want is for Congress to intervene,” Brooke Coleman of the Advanced Ethanol Coalition said at an afternoon briefing at a House Agriculture Committee hearing room.

The group, which included Tom Buis of Growth Energy, Bob Dinneen of the Renewable Fuels Association and Erik Lott of the Biotechnology Industry Organization, also held a briefing for Senate aides earlier in the day.

Intervention will only create more uncertainty for investors, Coleman added.

The industry officials praised EPA for not finalizing the proposal that would have reduced the mandates, but said it is vital for important to finish a proposal in 2015 that will follow the laws that Congress passed in 2005 to encourage renewable fuels production.

Dinneen said that under the law, EPA has to set volumetric requirements for 2014 but that he expects them to follow the amounts refiners have blended in 2014 and to be included with the 2015 requirements.

Blenders have used 13.5 billion gallons in 2014, Dinneen said, because ethanol has been so cheap. That’s more than the 13 billion gallons that EPA proposed, but less than the 14.4 billion gallons that would have been required if EPA had followed the expectations under the energy acts.

Dinneen also noted that EPA is allowing the companies an extension to “chew up their obligations” from 2013.

EPA is planning to put out a proposal for 2014 and 2015 by April, and to finalize by August a “package” that will include 2014, 12015 and 2016.

Buis said he does not believe that the Obama administration will use the coming months to diminish the renewable fuels industry,

“If they wanted to get rid of us they would have finalized that proposed rule,” Buis said.

Dinneen also noted that American farmers will harvest the largest corn crop in U.S. history, and said that this is not the time to roll back the RFS.

Addressing the question of whether the use of corn in ethanol raises food prices, Buis also noted that the price of corn has fallen more than half in the last two years but that the price of food is going up.

Meanwhile, ethanol critics said over the weekend that Congress should intervene to change or repeal the RFS.

“The Environmental Protection Agency’s irresponsible decision to hold off on an announcement for RFS requirements until next year is simply kicking the can down the road,” said incoming Senate Environment and Publics Works Committee Chairman Jim Inhofe, R-Okla.

“The EPA should have finalized the 2014 Renewable Volume Obligations in November of 2013, and now U.S. refiners and other affected entities will pay the price with a government mandate that has become retroactive,” Inhofe said.

“This only feeds the environment of uncertainty our economy has suffered with over the past six years, and is not how we should do business in America. Today’s announcement serves as another reminder that the Renewable Fuel Standard is broken and must be addressed in a new Congress.”

Four House members who are critics of ethanol — Reps. Bob Goodlatte, R-Va., Jim Costa, D-Calif., Peter Welch, D-Vt., and Steve Womack, R-Ark. — issued a joint statement that said the delays by the EPA “are completely unacceptable.”

“After nearly a year with no action on the proposed RFS for 2014, the EPA has decided to throw in the towel and punt the final decision until next year,” the statement said. “It’s extremely disappointing that this decision on renewable fuel obligations for 2014 has taken so long and will not be resolved by the end of the year.”

“How can the industry comply with a mandate that is released after they are already supposed to be in compliance? The longer stakeholders are forced to wait, the more uncertainty it creates in the marketplace. The EPA’s proposal for 2014, which included a reduction in the amount of ethanol blended into the fuel supply, was a positive step forward and acknowledged that the mandate is unworkable, detrimental to the environment, and price distorting to feedstock industries throughout the country.

“Action is needed now to reduce the ethanol mandate and provide much-needed relief. This issue needs to be addressed immediately, not several months into 2015.”

The four House members said EPA’s lack of action “once again proves that the RFS is unworkable and that Congress must reform the RFS.”