Senate Agriculture Committee Chairman John Boozman says he applauds the American Soybean Association for voicing concern about a bill to expand the corn ethanol market and overhaul how small oil refiners are treated under the Renewable Fuel Standard.

“It’s really divided a lot of people,” the Arkansas Republican told Agri-Pulse in an interview Thursday.

After reviewing a study from the Food and Agriculture Policy Institute at the University of Missouri, which found the bill would lead to using more corn-based ethanol to meet national biofuel-blending quotas, as opposed to green diesel, ASA sent a member-only communication summarizing the data, an ASA spokesperson told Agri-Pulse. 

"Based on the study’s findings, we advised ASA members that we could not support the legislation in its current form. However, ASA has not yet taken a public position on the legislation,” the spokesperson said.

The email came to light just hours before a House vote on the bill and sent shockwaves through an agriculture industry that’s typically aligned on efforts to boost usage of crop-based fuels.

The legislation to allow year-round sales of higher ethanol blends, known as E15, passed the House 218 -203 on Wednesday. It now moves to the Senate, where its fate will depend on what kind of “modifications” can be worked out, according to Boozman.

The bill faces opposition from at least one major biodiesel group, SABR. There’s also longstanding opposition to E15 from some oil refiners and environmental groups like the Sierra Club.

It’s easy to be “in the know” about what’s happening in Washington, D.C. Sign up for a FREE month of  Agri-Pulse news! Simply click here   

ASA, SABR and Boozman all stress that they support E15 by itself. The problem is that the bill also would reduce the number of small refinery exemptions (SREs) allowed under the Renewable Fuel Standard, the 21-year-old law behind national biofuel-blending mandates. Two studies out this week say the provision would have a negative impact on key parts of the ag industry, including soy.

The National Corn Growers Association sought to counter the findings on Thursday with analysis showing a "net positive benefit of year-round E15 for corn and soybean farmers."  

“For corn farmers, most of whom also grow soybeans, the overall impact is positive,” according to an NCGA study. “On average, a representative farm with equal corn and soybean acres realizes a net benefit exceeding $5 per acre over the projection period.”  

Refinery economics 

For Boozman and other lawmakers, there’s a separate concern that limiting SREs could hurt refineries that are critically needed in their regions. All four U.S. House members from Arkansas voted against the E15 bill on Wednesday, Boozman noted.

“Many senators have small refiners in their states, so because of that we’re just going to have to kind of work together to figure out a path forward,” Boozman said. “I very much, desperately, want to get an E15 bill passed … but we’ll have to see.”

“I think there’s a compromise to be had, but it does make it difficult for the state of Arkansas and several other states that are in a similar situation,” he said.

Boozman said he commends the soybean industry for taking the time to thoroughly study the matter. The “concerns were justified,” he said, adding that his office has been examining the issue and talking with experts.

“It’s complicated,” he said.

 For more news, go to Agri-Pulse.com.