The Gazette Editorial Board
Call it the biofuels war. Political and industry defenders of the federal Renewable Fuel Standard have turned up the heat since the U.S. Environmental Protection Agency recently proposed reducing the amount of renewable fuels required to be blended with gasoline in 2014. On the other side, oil and natural gas interests, as well as many environment watchdogs, applaud the proposal.
Iowa backers of the RFS blending mandate, not surprisingly, are hot. After all, Iowa has the most capacity of any state to produce corn-based ethanol, the main target of the EPA proposal, and is second only to Texas in biodiesel capacity. The biofuels industry here supports, directly or indirectly, 83,000 jobs and adds $12 billion annually to the Iowa economy, according to the Iowa Renewable Fuels Association.
Vocal supporters of the mandate cross partisan lines and in Iowa include Gov. Terry Branstad and Sen. Chuck Grassley, both Republicans, and 1st District Congressman Bruce Braley, a Democrat. We understand their objections. The biofuels industry has been a boon to Iowa’s corn and soybean farmers and the state’s economy. Ethanol production is a huge operation in our corridor’s industrial and agriculture sectors.
And the RFS mandate, which runs through 2022, gives the biofuels industry something not many other businesses get: a guaranteed market for its product. Many politicians who tout the benefits of free markets nonetheless have supported such a strict government edict — especially if it benefits their state.
PLUSES AND MINUSES
We do believe the EPA proposal would harm the industry and Iowa’s ag economy in the short run, although some Iowa economists don’t think the damage would be nearly as severe as the politicians and industry warn.
We also think it’s fair and prudent to recognize that the RFS mandate is not turning out quite as well as intended since Congress launched it in 2005 and revised its goals in 2007.
The original hopes were that ethanol and other biofuels would provide a cleaner alternative fuel to regular gasoline and diesel and also reduce our nation’s dependency on foreign oil as part of a national security policy.
There’s evidence to support the latter. Use of imported petroleum products has declined from 60 percent in 2005 to 41 percent in 2012 — the big growth period for biofuels — according to federal Energy Information Administration. However, some of that drop is also likely because of recent ramped-up domestic oil and natural gas production spurred by the very effective, and still environmentally controversial, “fracking” process.
As for whether biofuels production and use is better overall for the environment than fossil fuels, that’s increasingly being questioned.
On the positive side, burning ethanol produces about 30 percent less carbon dioxide — a major greenhouse gas that the majority of climate scientists say contributes to climate change — and 27 percent less carbon monoxide. Ethanol is also biodegradable.
On the other hand, National Academy of Sciences research, cited by the Environmental Working Group, notes that burning corn ethanol also increases emissions of other air pollutants, such as sulfur dioxide, nitrogen oxide and ozone.
Then there are production impacts. Corn ethanol is produced in plants powered by fossil fuels that emit greenhouse gases.
Back on the farm, an Associated Press investigation, using federal government satellite data, counted 1.2 million acres of grasslands and wetlands that became cropland sometime between 2006 and 2012. And since 2008, about 5 million conservation acres have been put back into crop production. Those changes raise concerns about increased erosion from highly erodible land and the impact on water quality with the loss of runoff buffers. Tillage of grasslands, which are rich storers of carbon, also releases more carbon dioxide.
In Iowa, the Environmental Working Group’s study identified 38 counties as “hot spots” where there has been substantial conversion of highly erodible land to corn and soybean production in recent years.
Certainly, not all of those land-use changes can be attributed to the RFS mandate. Other government policies and market factors all weigh in farmers’ planting decisions.
THE EPA PLAN
The EPA’s proposal appears to be based largely on what’s called the “blend wall.” Here’s what that involves.
Most ethanol is consumed as a 10 percent blend of ethanol and gasoline, or E10. Only a very small amount is E85 and the recently approved E15.
The United States consumes about 133 billion gallons of gasoline overall, which means the most ethanol that can be blended, based on demand, is about 13.3 billion gallons. The RFS mandate for this year is 13.8 billion gallons. The EPA wants to roll back the blend requirement in 2014 by about 3 billion gallons. And with the Department of Energy forecasting a continued slide in fuel use for several years as vehicles becomes more energy efficient, additional calls to trim the mandate may be a reality unless consumption trends reverse.
Biofuels supporters see expansion of the E85 and E15 consumption as a way to expand demand and push the blend wall back, but they cite obstacles such as distribution infrastructure limits tied to the oil industry and what they say are unfounded fears about biofuel damage to engines in vehicles built since 2001.
The oil and natural gas industries support the rollback and likely wouldn’t mind seeing the entire mandate removed. Of course, with record profits in recent years and a century of government support through various tax credits and deductions (some specific to the industry, some that many other businesses also get), it’s hard to get worked up about their complaints.
There’s no question that the RFS mandate has produced lots of green for farmers and the industry. That’s a good thing.
WHAT’S BEST FOR NATION?
But the big public policy questions to resolve are these: What are the overall economic and environmental impacts of the mandate? What should we depend on more heavily — biofuels or domestic production of fossil fuels — for national security concerns?
And in the meantime, will technology and research come up with better alternatives to today’s renewable fuel choices?
Whether or not the EPA’s proposal takes effect after January, it’s clear that Congress needs to review the mandate. But don’t leave it only to endless political debate and grandstanding. Assemble a credible task force of scientists and experts not connected with either the oil or biofuels industries. Task them with doing quality research that leads to clear recommendations before we find ourselves immersed in this same squabble at the end of next year.
Then pay attention to what they say and make decisions for the overall good of the nation, not just one commercial sector or another.
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