EPA heads to the Corn Belt for an earful on the RFS

By Spencer Chase

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, June 7, 2016 - EPA officials will have the chance to hear directly from stakeholders at a one-day hearing in Kansas City, Missouri, Thursday on the future of the Renewable Fuel Standard.

According to a draft schedule obtained by Agri-Pulse, EPA will hear from almost 140 witnesses. Many are among the usual suspects in the RFS debate like Renewable Fuels Association CEO Bob Dinneen, who will testify in one of the first panels. In a statement to Agri-Pulse, Dinneen raised concerns about the RFS that could very well make an appearance in his testimony.

Dinneen said EPA's proposed volume requirements for 2017 are an improvement over those set in the agency's final rule for 2014-2016. However, he said the plan “still violates the law by inappropriately applying the ‘general waiver' provision to conventional renewable fuels, and suggesting there is an ‘inadequate supply' (of ethanol) to meet the 15 billion-gallon statutory requirement.”

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“EPA may only grant a general waiver based on ‘inadequate supply' if the biofuels industry lacks the capability to produce the required volume of renewable fuel. Clearly that is not the case today,” he added.

Last month, the EPA proposed a Renewable Volume Obligation (RVO) of 18.8 billion gallons for 2017 with the potential for 14.8 billion gallons from traditional corn ethanol. The figures set by Congress in the 2007 law establishing the RFS called for 24 billion total gallons to be blended into the gasoline supply with a potential 15 billion gallons of corn ethanol.

Other familiar figures expected to testify include Chip Bowling, president of the National Corn Growers Association, and Emily Skor, the new CEO of Growth Energy, as well as representatives from the National Biodiesel Board and the American Coalition for Ethanol. Numerous state commodity group leaders will also be testifying, likely pushing for an increase that would allow for the statutory 15 billion gallon corn ethanol RVO.

NCGA will cite an increased investment in infrastructure in an apparent effort to continue to debunk the waiver argument.

“Over the past year, farmers, the ethanol industry, and USDA have invested more than $200 million in new ethanol pumps and fuel infrastructure,” Bowling said in a statement to Agri-Pulse. “Today's consumer has more access to affordable, renewable fuel choices than ever before. The fact is, the industry has responded, and we're going to hold EPA accountable.”

The National Biodiesel Board also plans to weigh in and shared their prepared testimony with Agri-Pulse.

“Biodiesel is the most successful Advanced Biofuel in the nation, and plants like mine can do so much more with the right policy signals,” NBB Chairman Ron Marr, biodiesel manager at Minnesota Soybean Processors, said in testimony to be delivered at the hearing. “We stand ready to expand our production with new jobs and economic impact. By the EPA's own analysis, biodiesel reduces greenhouse gas emissions by at least 57 percent. So if our nation is serious about cutting emissions in the transportation sector, this proposal needs to be strengthened to truly capture biodiesel's potential while putting more Americans to work in the clean energy sector.”

And Anne Steckel, NBB's vice president of federal affairs, plans to note that “changing the way we power our vehicles requires bold, aggressive action, and the RFS is the most effective policy we have for accomplishing that.

“The RFS is not a status quo policy. It was designed to drive investment and innovation by providing stability and incentives for the development of clean alternative fuels. But this proposal falls short of that goal.”

One of the more colorful statements may come from Kansas farmer and former NCGA President Ken McCauley, who said he was reminded of a 1982 song by the rock band White Snake called “Here I Go Again” when preparing to testify”. The song begins: 

don't know where I'm goin'
But I sure know where I've been
Hanging on the promises in songs of yesterday
… Here I go again.

McCauley plans to take EPA to task for breaking promises. Here's an excerpt:

“The uncertainty created by EPA's confounding decisions on the RVO levels for conventional levels make it difficult to know where the ethanol industry is going. We know where we've been and we are truly hanging onto the promises in the RFS that gave us needed market access for ethanol to be sold in a market controlled by the oil industry.

“I really don't know why I keep hanging on to promises of yesterday. Even though the RVO levels for ethanol are set in a law called the Renewable Fuels Standard, EPA continues to break those promises by undermining that law.

“I went to Washington to support the RFS back when it was created and I know EPA's authority for adjusting the RVO was to be used in case of a short corn crop. Believe me, we do not have a short corn crop.

“It is a fact that farmers are producing more than enough corn. The extremely low corn price reflects that fact.

“It is a fact that Kansas net farm income today is lower than it was in the mid-1980s, back when White Snake was playing on the radio, and farms were going bankrupt. Farmers invested and helped build the ethanol industry to provide an additional market for corn, to reduce our dependence on foreign oil and yes, to help the environment. We would have a more robust market for ethanol and for corn today, if EPA would stop lowering the ethanol levels in the RFS Law.”

While the pro-RFS argument will be well represented, many opponents of the RFS will also be on hand. In particular, witnesses from the American Petroleum Institute and the American Fuel and Petrochemical Manufacturers will be some of the first speakers of the day. A spokesman for API did not respond to requests for comment, but the organization is on the record requesting RVOs at 9.7 percent of total gasoline demand. Based on Energy Information Administration 2017 projections of 9.31 million barrels of motor gasoline consumption per day, 9.7 percent of demand would equate to about 13.8 billion gallons.

As for AFPM, Geoff Moody, the group's senior director of government relations, plans to ask for reduced volumes.

While the group supports EPA's plan to set volumes under the statutory requirements, “the fact is that the proposal still does not recognize market realities, including significant consumer demand for ethanol-free gasoline,” Moody said in a statement to Agri-Pulse. He added that EPA should “waive the volumes further to allow consumers to have a meaningful choice at the gas pump.”

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