Proposed federal Renewable Fuel Standard change assailed in Iowa

Branstad: “We’re trying to create jobs, not kill jobs in this country”

Rod Boshart
Published: January 23 2014 | 3:40 pm - Updated: 29 March 2014 | 2:34 am in

DES MOINES — Speakers at Iowa’s Hearing in the Heartland dropped the hammer Thursday on the federal government’s plan to roll back the Renewable Fuel Standard (RFS), charging the change would hurt rural jobs, investments and the environment while increasing America’s reliance on foreign oil.

Gov. Terry Branstad told hearing participants that the U.S. Environmental Protection Agency proposal to scale back renewable fuel volume obligations would have a direct effect on Iowa’s 41 ethanol plants, Iowa’s 13 biodiesel plants, and the scores of facilities across the Midwest.

He estimated the EPA change would cost nearly 45,000 jobs nationally and pose undue financial hardship and stress for thousands of families.

“We’re trying to create jobs, not destroy jobs in this country,” the Iowa governor said.

Last November, the EPA made proposals to — for the first time — scale back its RFS requirements for the total amount of biofuels blended into the nation’s gasoline supply.

The agency’s RFS proposal would lower the mandate to 15.2 billion gallons of renewable fuels, with 13.01 billion gallons from conventional ethanol and 2.2 billion gallons from advanced biofuels. Previous RFS requirements passed by Congress called for 18.15 billion gallons of renewable fuels next year, with 14.4 billion gallons of conventional ethanol and 3.75 billion gallons of advanced biofuels.

On Thursday, a coalition of farmers, commodity groups, renewable fuel industry and elected officials from Iowa and six other Midwest states took turns slamming the decision to scale back the production targets that potentially could “strand” billions of dollars of private capital and hand a victory to “Big Oil” and “Big Food” interests who have opposed the government mandate.

Grassley, Harkin letter

“The (Obama) administration’s proposal is a significant step backward — undermining the goal of increasing biofuels production as a domestic alternative to foreign oil consumption,” said a letter to EPA Administrator Gina McCarthy signed by Iowa’s U.S. senators, Charles Grassley and Tom Harkin, and 29 other senators.

“Further, the proposed waiver places at risk both the environmental benefits from ongoing development of advanced biofuels and rural America’s economic future. We urge you to modify your proposal,” the senators said in the letter.

Grassley backed up the letter by telling the hearing participants at the World Food Prize Hall of Laureates the EPA’s proposed action would be harmful to biofuel producers, to Iowa’s rural economy, to America’s national security and the environment.

State Sen. Jeff Danielson, D-Waterloo, said homegrown, renewable fuels such as ethanol are contributing to America’s energy independence, but unfortunately those fuel sources are “under attack, not by a foreign enemy — but by the EPA” with proposed cutbacks that don’t make common sense.

“Cutting the RFS is the wrong policy proposal at the wrong time,” Danielson said. “The EPA has an obligation to offer a balanced energy policy, and certainly not propose an idea that adds profits to oil company’s bottom line when they are already doing quite well, at the expense of bio fuels.”

Branstad predicted the EPA’s “misguided” proposal, if implemented, would result in corn prices below the cost of production, reduced agriculture land values, and cause significant job losses for farm equipment dealers and manufacturers.

“I was governor of Iowa during the farm crisis of the 1980s — a time which brought incredible hardship to farm families and rural communities. I will never, ever, forget the challenges endured during those times — and the last thing that we ever want to see again in our nation is another farm crisis,” Branstad said.

Indiana Lt. Gov. Sue Ellspermann said the proposed RFS changes would curtail production of ethanol and other biofuels. She accused the federal government of “backtracking” with a course shift that would “pull the rug out from under” farmers, investors and various producers.

“This industry has faced uncertainty forever,” said Iowa Agriculture Secretary Bill Northey, one of five state agriculture secretaries who attended Thursday’s hearing. But he noted the current situation has posed a new and “damaging” threat and he questioned the legality of the action.

Branstad laid blame for the EPA change on Big Oil, its lobbyists and allies, noting that the petroleum industry has fought the expansion of ethanol and has put pressure on retailers not to install blender pumps.

“Big Oil is delighted that the EPA has recommended weakening the Renewable Fuel Standard. But they’re not happy, they want to repeal it altogether,” he told the hearing participants. “Their real goal is to repeal the Renewable Fuel Standard.”

The EPA’s open comment period on the proposed RFS rules is slated to close Jan. 28.

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