Corn growers and other backers of year-round sales of E15 got a huge win Wednesday with the passage of legislation by the House, but now they face a steep climb to passage in the Senate amid opposition from both fuel and agriculture groups.
The 218-203 vote to allow year-round sales of the higher ethanol blends marks a major milestone after years of failed legislative attempts.
“We are thrilled," National Corn Growers Association President Jed Bower, an Ohio farmer, said. "Passage of this bill is essential to the success of corn farmers and rural communities, particularly as our growers face their fourth year of net losses and struggle with high input costs. It would also help drivers across the country who could save 10 to 30 cents per gallon on gas as fuel prices continue to rise."
The measure garnered support from 122 Republicans, 95 Democrats and one independent. The biofuel bill was rejected by 90 GOP members and 113 Democrats. A total of nine lawmakers didn't vote.
The route to passage was not without drama, as news surfaced that the American Soybean Association had told its members it would not be backing the bill even though the group favors year-round access to E15. The Sustainable Advanced Biofuel Refiners (SABR) Coalition, a biodiesel group, also came out against the bill just hours before the vote.
The main sticking point isn’t about allowing year-round, voluntary sales of gasoline to be mixed with 15% ethanol, up from 10% now. Instead, the objections center around the economic ripple effects of language that would change how the Environmental Protection Agency handles small refinery exemptions (SREs) from national biofuel-blending rules under the Renewable Fuel Standard.
The SRE provision also faces objection from independent refiners who say it would lead to burdensome compliance costs and put union jobs at risk. The American Petroleum Institute, which represents large refiners, supports the measure, saying it's needed to improve market transparency and certainty.
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The RFS section of the bill is cited in two studies this week. The Congressional Budget Office concluded the measure would add $2.3 billion to the U.S. deficit over 10 years, while the University of Missouri's Food and Agricultural Policy Research Institute said the provision would hurt demand for biomass-based diesel and the soybeans used to make the fuel.
The study released Tuesday by FAPRI shows that the bill would have "negative economic impacts for soybean growers and the broader agricultural economy," ASA said in a statement after the vote.
"Moving forward, ASA will continue working with lawmakers and stakeholders to advance solutions that enable year-round E15 without rewarding petroleum refiners who do not comply with the Renewable Fuel Standard at the expense of a critical domestic market for U.S. soy," the group said. "Year-round E15 legislation must be pursued with a collective goal of strengthening farm income and supporting markets for both soybean and corn farmers."
Renewable Fuels Association Chief Executive Officer Geoff Cooper called the bill’s passage a "hard-fought victory for consumers seeking lower prices at the pump, farmers seeking new market opportunities and American families who want cleaner air and greater energy independence."
Growth Energy CEO Emily Skor urged senators to "quickly reject critics who oppose competition at the pump from lower-cost fuel. Year-round E15 simply allows retailers the option to offer another, less expensive fuel choice to drivers. Now is the time to act.”
Rep. Adrian Smith, R-Neb., the bill's sponsor, said enshrining E15 into law would end years of "patchwork regulations and expand much-needed market access" for biofuel producers.
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