WASHINGTON, April 10, 2013- Rep. Bob Goodlatte, R-Va., led a bipartisan group of lawmakers today in introducing legislation to eliminate the conventional biofuels mandate of the Renewable Fuels Act (RFS) and cap the amount of ethanol that can be blended into the fuel supply.
“The federal government’s creation of an artificial market for the ethanol industry has quite frankly triggered a domino effect that is hurting American consumers, energy producers, livestock producers, food manufacturers, and retailers,” Goodlatte said.
The RFS Reform Act, sponsored by Goodlatte, Jim Costa, D-Calif., Steve Womack, R-Ark., and Peter Welch, D-Vt., is supported by the major beef, pork and poultry lobbies. The RFS Reform Act would eliminate the corn-based ethanol requirements and cap the amount of ethanol that can be blended into conventional gasoline at 10 percent. Also, it would require the EPA to set cellulosic biofuel levels at production levels.
National Corn Growers Association (NCGA) President Pam Johnson said “America’s corn farmers stand strong against this attack on the RFS” in a statement today.
“Close analysis of claims that ethanol production, and thus the RFS, drive up consumer food costs prove false,” Johnson argued. “While some sectors of the nation’s food supply have seen price increases over the past year, many other sectors which also rely on corn, including milk, turkey and pork prices, have fallen.”
According to Energy Information Administration (EIA) data released on last week’s ethanol production, ethanol production averaged 35.87 million gallons daily, which completes the largest week-to-week increase since October 2011.
The Renewable Fuel Standard (RFS) mandates that 36 billion gallons of renewable fuels be part of our nation’s fuel supply by 2022. During a press conference today, Goodlatte said almost all of this is currently being fulfilled by corn ethanol and, in 2011, 40 percent of the U.S. corn crop was used for ethanol.
With the backing of more than 40 organizations, he added, “Renewable fuels play an important role in our energy policy but should compete fairly in the marketplace. This legislation will bring the fundamental reform this unworkable federal policy needs now.”
Among other groups, the American Meat Institute, the Environmental Working Group, the National Cattlemen’s Beef Association (NCBA), the National Pork Producers Council (NPPC) and the National Chicken Council (NCC) support the legislation.
After the 2012 drought, NCBA and NPPC asked the U.S. Environmental Protection Agency’s (EPA) to implement a provision of the RFS that waives the biofuels mandate, but the agency determined corn production conditions didn’t require the “safety valve” provision.
“It is clear, when EPA is unable to provide even a temporary waiver of the RFS during the worst drought in 70 years to assure adequate feed and food supplies, that something is broken and needs to be fixed,” said NPPC President Randy Spronk today.
According to NCC President Mike Brown, since the RFS was enacted, chicken producers alone have incurred $35 billion in cumulative additional feed costs.
"We have witnessed a dozen poultry companies file for bankruptcy, be sold or simply close their doors, due in large part to the extreme volatility and record high cost of corn associated with ethanol's insatiable demand," he said.
In defense of the current RFS, NCGA’s Johnson said since its passage into law in 2005, the standard “has helped rebuild rural America, allowing our children to come back to the farm and supporting many businesses in our communities.”
“Additionally, the ethanol industry contributed more than $42 billion to the nation’s gross domestic product in 2011, generated nearly $30 billion in household income and saved consumers a minimum of 25 cents per gallon at the pump,” said Johnson.
Growth Energy CEO Tom Buis said the legislation is in response to oil companies’ fears of a competitive product in E15. “While E15 is a voluntary choice for consumers and retailers, oil companies know that E15’s savings and superior performance will cut into their bottom line and they will do everything they can to stop it,” he said.
NCC’s Brown claimed the chicken producers he represents “are certainly not anti-corn; and we're not even anti-ethanol.”
“What we are against is a government mandate that artificially inflates the price of corn, picks winners and punishes losers among those who depend on it,” he said, adding that the RFS Reform Act introduced today would “level the playing field” by embracing free market principles.
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