Bill seeks to expand RFS to include ethanol from coal, natural gas

By Sara Wyant

© Copyright Agri-Pulse Communications, Inc.

WASHINGTON, January 18, 2012 -The first of what could be several legislative attempts this year to repeal or water down the Renewable Fuels Standard (RFS) is expected to be launched later today, according to ag industry sources. Texas Rep. Pete Olson plans to introduce the Domestic Alternative Fuels Act. It would expand the eligibility requirements within the RFS to allow ethanol derived from alternative feedstocks, such as natural gas and coal, to compete with corn-based ethanol. Ironically, Congress passed the RFS in 2005 and updated it two years later with the goal of reducing America's dependence on fossil fuels.

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The National Cattlemen's Beef Association called Olson's bill “a step in the right direction,” while Growth Energy, an ethanol trade group, accused the two-term Republican from the Houston area of being beholden to oil interests.

A summary of Olson's bill obtained by Agri-Pulse leaves little doubt that a key objective is to reduce the amount of corn used to produce ethanol. “It's time we let the market decide if food should be used to for transportation fuel,” the summary says.

According to USDA, ethanol consumed 40 percent of the 2010 U.S. corn harvest and is forecast to take the same percentage of last year's crop. The ethanol industry surpassed livestock feeding as the top domestic user of corn in the 2010-11 marketing year, resulting in “diminished supplies for livestock and food producers and higher corn prices,” the document states.

As drafted, the legislation would establish domestic alternative fuel as an independent fuel category and list it within the regulations that specify volume obligations to meet the RFS. It also “will enable greater capital investment in research and development” of ethanol feedstocks “and promote the construction of new domestic production facilities, creating American jobs,” the document says. Olson's office did not return requests for comment.

NCBA supports his efforts to broaden the definition of ethanol-eligible feedstocks, President Bill Donald said.

“Unfortunately, the RFS has allowed the federal government to mandate corn-based ethanol production volumes, which has put cattlemen and other end-users of corn at a competitive disadvantage,” Donald said.

But according to Growth Energy CEO Tom Buis, the legislation is nothing more than an effort by the oil industry to control U.S. energy supplies. “It's just something you typically see coming from the ‘Oil Patch'” Buis said. 


Original story printed in January 18, 2012 Agri-Pulse Newsletter.

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