For the past few weeks, there have been rumblings that the U.S. Environmental Protection Agency had plans to reduce the ethanol mandate, officially known as the Renewable Fuels Standard. The agency’s official proposal was released this afternoon.
EPA proposed a range of 15 billion to 15.52 billion gallons of renewable fuel in 2014. That range for fuels such as corn-based ethanol and biodiesel compares to a quota in 2007 legislation that called for 18.15 billion gallons.
Here are the industry’s reactions:
Agriculture Secretary Tom Vilsack: "The Obama Administration remains committed to the production of clean, renewable energy from homegrown sources, and to the businesses that are hard at work to create the next generation of biofuels.
It's important to take a long-term approach to the RFS. Clearly, as Governor of Iowa and as U.S. Secretary of Agriculture, my support for the RFS has been steady and strong. But I also believe that improved distribution and increased consumer use of renewable fuels are critical to the future of this industry. We are proud of our record to support increased demand for renewable fuels. USDA has invested in the creation of advanced biorefineries across the nation; developed a unique partnership with the U.S. Navy and Department of Energy to create new biofuels for marine and aviation use; and boosted markets for nearly 3,000 U.S. companies that are creating biobased products from homegrown materials.
I am pleased that EPA is requesting comments on how we can help the biofuels industry expand the availability of high-ethanol blends, and I hope the industry uses the comment period to provide constructive suggestions."
American Farm Bureau Federation: The American Farm Bureau Federation is disappointed in the Environmental Protection Agency’s proposed reduction in the amount of ethanol that must be blended into the nation’s gasoline supply," says Bob Stallman, President of the American Farm Bureau Federation. "This decision strikes a blow to conventional ethanol production as well as dampens the prospects for advanced biofuels."
"The intent of the Renewable Fuels Standard revised in 2007 (RFS2) was to get more renewable fuels into our nation’s pipeline and move beyond the E10 fuel blend. Today’s announcement from EPA moves us in the opposite direction. This decision has the potential to pull the plug on new technologies and investments that are currently in place and needed to produce advanced biofuels.
"The ethanol industry, from farmers to investors and everyone in between, needs stability and certainty."
National Corn Growers Association: "This recommendation is ill-advised and should be condemned by all consumers because it is damaging to our tenuous economy and short-sighted regarding the nation’s energy future," said NCGA President Martin Barbre. "Agriculture has been a bright spot in a failing U.S. economy, but current corn prices are below the cost of production. EPA’s ruling would be devastating for family farmers and the entire rural economy."
The Environmental Protection Agency’s proposed renewable volume obligations set the annual targets for the utilization of cellulosic, biodiesel, advanced and total renewable fuel within our transportation fuels. The proposed rule caps corn-based (or conventional) ethanol at 13 billion gallons. These proposed volume obligations are a drastic reduction from the mandated RVOs in statute. Today’s proposed rule cuts 1.4 billion gallons from the conventional ethanol cap that was set at 14.4 billion gallons.
"Ethanol and the RFS have been a great success story. Now, the EPA is sending a terrible message that we no longer have a long-term energy policy for biofuels, which was the original intent of this forward-thinking legislation. The Administration has clearly backed away from their commitment to renewable energy and this proposal blatantly contradicts the President’s Climate Action Plan," Barbre said. "The goal of the RFS is to reduce our dependence on imported oil to make our country more energy independent and more secure. It has done that while also revitalizing rural America."
American Soybean Association: In response to a Proposed Rule for the 2014 Renewable Fuel Standard Required Volume Obligations (RVO) issued today by the U.S. Environmental Protection Agency, the American Soybean Association expressed concern that the biomass-based diesel levels for 2014 and 2015 would be reduced below the amount actually produced in 2013. The rule, which establishes the amount of biofuels that obligated parties must utilize for 2014 and the amount of biomass-based diesel for 2014 and 2015, proposes a biomass-based diesel RVO of 1.28 billion gallons, less than the amount produced by the industry in 2013. EPA has also proposed to reduce the total advanced biofuels requirement, which also limits the opportunities for biodiesel.
"The level set forth in the proposal is unnecessarily low and will stifle the growth and job creation potential demonstrated by the biodiesel industry over the past several years," said Danny Murphy, a soybean, corn and wheat farmer from Canton, Miss., and ASA’s president. "Biodiesel, including biodiesel produced from soybean oil, is the most prevalent advanced biofuel currently produced in the United States. Biodiesel is the first and only EPA-designated Advanced Biofuel to reach 1 billion gallons of annual production. The industry has met or exceeded the RFS Biomass-based Diesel volume requirements each year they have been in place."
ASA will continue to work with EPA and industry partners to demonstrate the flaws represented by this proposal and looks forward to achieving a final rule that does not hinder the momentum and positive economic benefits generated by biodiesel.
"The biodiesel industry is on track to produce at least 1.7 billion gallons of biodiesel in 2013, and can match or surpass that production level in 2014," added Murphy. "By keeping the RVO target at the lower 1.28 billion gallon level, EPA would be limiting an industry that is supporting jobs, providing a valuable market for soybean farmers, and in turn lowering the price for the protein-rich soybean meal used in animal feed."
Advanced Ethanol Council: "While only a proposed rule at this point, this is the first time that the Obama Administration has shown any sign of wavering when it comes to implementing the RFS," said Brooke Coleman, Executive Director of the Advanced Ethanol Council (AEC). "EPA is in the right ballpark for cellulosic biofuels, and we are confident that the final number will be the right one for the industry in 2014. But bigger picture issues must be resolved in the final rule because advanced biofuel investors also pay attention to the big picture."
The Council pointed to unnecessary reductions to the advanced biofuel pool, unfounded concern about imaginary blend walls, and not enough faith in the mechanics of the RFS program among certain Administration officials as the primary issues that need to be resolved during the comment period.
"What we’re seeing is the oil industry taking one last run at trying to convince administrators of the RFS to relieve the legal obligation on them to blend more biofuel based on clever arguments meant to disguise the fact that oil companies just don’t want to blend more biofuel. The RFS is designed to bust the oil monopoly. It’s not going to be easy," added Coleman.
U.S. Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry: "The so-called blend wall is a crisis manufactured by the oil industry, which is interested in eliminating the competition so they can continue reaping even greater windfall profits. The proposed rule could cost thousands of good paying clean energy jobs and mean less competition at the pump. I urge the administration to take a hard look at how this could seriously set back growth at a crucial time when tremendous progress is being made toward commercial-scale production of advanced biofuels.
"I’m committed to working with the EPA to ensure new standards don’t stand in the way of American innovation. It’s important we continue growing and expanding access to homegrown fuels that not only reduce our dependence on foreign fuel, but also create jobs here and grow the U.S. economy."
Congresswoman Cheri Bustos, a member of the House Agriculture Committee: "Today’s proposal from the EPA to reduce the amount of renewable fuels defies common sense. Not only would this proposal hurt Illinois farmers, rural communities and our state’s economy, but it could also drive up prices at the gas pump and increase our dependence on foreign sources of oil. I’ll continue fighting for the health of our region’s economy and to keep our country safer and more secure by standing with both Democrats and Republicans in opposing this insensible proposal."