Careful planning around implementation of renewable fuels policy in 2014 and beyond will have substantial effects for corn farmers and other agricultural producers, Purdue University agricultural economics professor Chris Hurt tells lawmakers in prepared remarks.
"Crop farmers want to at least maintain current conventional ethanol levels and can, in a few years, increase production to meet the 15 billion gallon mandate if a way can be found around blend wall constraints," Hurt says, according to comments released in advance of today’s hearing before the House Energy and Power Subcommittee.
(Click to read: What Happens to Corn Prices Without the Ethanol Mandate?)
"Oilseed production can also increase modestly allowing some modest expansion of biodiesel use, again over time. However, this cannot meet multi-billion gallon mandates without major distortions to segments of food markets. The animals sector and food consumers want to avoid political mandates in an RFS that increase demand for crops at a faster rate than U.S. and world supply can reasonably meet."
Hurt, along with supporters and opponents of the 2005 Renewable Fuel Standard (RFS), are meeting this week in Washington to assess the provision. The first of two hearings happened Tuesday. Among those participating as witnesses are Pam Johnson, president of the National Corn Growers Association; Scott Faber, vice president of government affairs for the Environmental Working Group; and fuel industry representatives such as Jack Gerard, president and CEO of the American Petroleum Institute.
The hearings will focus on the following RFS issues:
- Implementation status and challenges
- Impact on fuel producers, marketers and end users
- Administration of the program, including the approval process for new renewable fuels and waivers
- Impacts on the agricultural sector and energy markets
- Potential improvements
As it stands, EPA’s biofuels mandate has not been reduced, meaning additional biodiesel will be required to meet rising thresholds—16.55 billion gallons this year and 20.5 billion gallons in 2015. That will put pressure on farmers and land.
"Meeting the total RFS2 with large quantities of biodiesel will require more land as the yield of fuel per acre is low compared to corn. As an example, average quality Midwest corn land will produce about 470 gallons of conventional ethanol per acre," Hurt says.
"So 1 billion gallons of additional ethanol would require the corn from about 2.1 million acres. Soybean oil production is only about 82 gallons per acre. Biodiesel also gets a 1.5 gallon credit for the RFS2, so the production of an additional 1 billion 13 gallons for RFS2 only requires 667 million gallons of physical biofuels. At 82 gallons per acre based on soybeans, this means 8.1 million added acres of soybeans. Using increasing amounts of biodiesel to meet the total RFS2 puts great demands on what has been the scarce resource in recent years, farm land."
Click here to read Hurt’s complete prepared remarks to lawmakers. Watch the hearings by clicking on the videos below.
Watch Day 1 of the biofuels hearing:
Watch Day 2 of the biofuels hearing: