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Renewable Fuels Standard Debate Heats Up Again

Legislators revive effort to alter Renewable Fuels Standard; Ethanol industry fights back

Published on: Apr 11, 2013

Four U.S. Representatives Wednesday introduced legislation that would alter the RFS by eliminating corn-based ethanol requirements, capping the amount of ethanol that can be blended into conventional gasoline at 10%, and requiring the EPA to set cellulosic biofuels levels at production levels.

Reps. Steve Womack, R-Ark., Bob Goodlatte, R-Va., Jim Costa, D-Calif. and Peter Welch, D-Vt., announced the "RFS Reform Act" with the support of more than 40 consumer and agricultural organizations.

According to 2013 Renewable Fuels Standard requirements, 13.9 billion gallons of ethanol should be blended into gasoline in 2013 – a value that livestock groups say puts too much pressure on corn supplies.

CORN COMPETITION: Livestock and poultry groups arent happy with the RFS mandates; ethanol producers say the industry provides service to livestock producers
CORN COMPETITION: Livestock and poultry groups aren't happy with the RFS mandates; ethanol producers say the industry provides service to livestock producers

"Cattlemen and women are self-reliant, but in order to maintain that we cannot be asked to compete with federal mandates like the Renewable Fuels Standard for the limited supply of feed grains," said National Cattlemen's Beef Association Policy Vice Chair Craig Uden.

NCBA and the National Pork Producers Council last fall urged the EPA to waive the RFS in light of extreme drought conditions and concerns that the corn supply would be able to handle pressure from ethanol markets and livestock feeders.

"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.

The National Chicken Council, too, has said that corn supplies are not ready to handle the increased demand from ethanol markets. NCC President Mike Brown noted that from the view of the NCC, the RFS artificially inflates the price of corn and the new legislation, he says, levels the playing field by "embracing free market principles."

But ethanol advocates aren't so sure about the arguments of livestock producers. Jeff Broin, Co-chairman of the Board for ethanol group Growth Energy, said in a press call Wednesday that corn prices are changing partly due to loss of government subsidies for grain production.

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"[Food and livestock] industries were able to buy subsidized grain for about 50 years and I'm sure they liked that – having the government pay for half of their input costs," Broin said. He added that ethanol production doesn't simply compete with livestock for the same grain, but instead offers producers an affordable by-product, dried distillers grains.

Additionally, Growth Energy CEO Tom Buis argued, ethanol production does not require 40% of corn crop as publicized by livestock groups.

"That's a gross number, not a net number because of the displacement of the proteins from corn after starch is extracted, and the displacement of soybean meal," Buis said.

The Growth Energy press conference was part of a larger set of scheduled meetings with members of Congress to answer questions about the ethanol industry.

The group also expressed concern that a repeal or alteration of the RFS would push back ethanol advancements and create uncertainty for producers, marketers and ultimately the consumer.

"Any changes to the program would have a devastating effect, creating uncertainty in the marketplace and halting investment in new technologies for biofuel production," Buis said.

"Not only is this legislation short sighted," he added, "it prevents free market access for a price competitive product."

The legislators' bill is supported by: ActionAid USA, the American Frozen Food Institute, the American Meat Institute, the Competitive Enterprise Institute, the Environmental Working Group, the Grocery Manufacturers Association, the Milk Producers Council, the National Cattlemen's Beef Association, the National Chicken Council, the National Council of Chain Restaurants, the National Marine Manufacturers Association, the National Restaurant Association, the National Taxpayers Union, the National Turkey Federation, the Outdoor Power Equipment Institute, and Taxpayers for Commonsense.

Read more about the RFS:

EPA Proposes 2013 Renewable Fuel Standards

Renewable Fuels Standard, Biofuels Continue to Take Hits

Renewable Fuels Standard Question Isn't Dead

RFS Questioned as Livestock and Ethanol Producers Butt Heads