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Comments accepted through Jan. 28 on EPA's renewable fuels proposal

By Janet Kubat Willette
jkubat@agrinews.com

Date Modified: 01/08/2014 3:54 PM

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Eyota farmer Dan Brandt was going door-to-door in Plainview last week talking about the importance of the Renewable Fuels Standard and encouraging farmers and agribusiness people to comment on the EPA proposal to lower the amount of renewable fuels used in transportation fuels.

Brandt is an all-out supporter of biofuels. He said it makes no sense to go backwards on the Renewable Fuels Standard, especially with the 2013 corn crop is pegged at a record 14 billion bushels and up 30 percent from last year's drought-stressed yield.

"There's no reason to cut it back," Brandt said.

EPA has proposed a 1.4 billion gallon reduction in how much corn ethanol will be required under the Renewable Fuels Standard, dropping from the originally required 14.4 billion gallons to 13 billion gallons. It also froze the biodiesel volume.

The EPA is accepting comments until Jan. 28 on the proposal.

The RFS was passed in the Energy Policy Act of 2005 and statutory provisions were modified in the 2007 Energy Independence and Security Act. The 2007 law establishes volumes of renewable fuels to be used annually in four categories: Cellulosic biofuel, biomass-based diesel, advanced biofuel and total renewable fuel. Volumes increase through 2022 for all except biomass based diesel.

EPA is also given the authority to waive the applicable volumes. The American Petroleum Institute and the American Fuel and Petrochemical Manufacturers have petitioned EPA for a partial waiver in 2014.

It's the third time a waiver has been requested; the second time was in fall 2012 following the drought. EPA denied both previous waiver requests.

"Our members' primary RFS concern is the ethanol blend wall," said Bob Greco of the API at a RFS public hearing on Dec. 5. "There are serious vehicle and retail infrastructure compatibility issues associated with the usage of gasoline containing ethanol in excess of 10 percent by volume.

Rick Schwarck, president, chairman and CEO of Absolute Energy, which straddles the Iowa-Minnesota state line at St. Ansgar and Lyle, said the blend wall is an artificial number. More than 95 percent of the gasoline sold in the United States is blended with 10 percent ethanol. To get beyond that, consumers need access to mid-level blends including E15, E30 and E85. E15 is approved for use in vehicles 2001 and newer.

It takes infrastructure to have those mid-level blends available to consumers. The ethanol industry argues it wants equal access to consumers. Schwarck said the refiners want the lack of infrastructure to count against the ethanol industry, saying there is a lack of supply of outlets selling mid-level blends.

Iowa Gov. Terry Branstad said the oil industry is resistant to ethanol because it is something they can't control. Branstad asked people to remember MTBE during a Dec. 4 conference call.

MTBE was the oil industry's oxygenate additive. It was also a groundwater pollutant.

Ethanol, on the other hand, has revitalized rural communities and is a renewable fuel, Branstad said. Iowa is the nation's top ethanol and biodiesel producer with 41 ethanol plants and 13 biodiesel plants. The EPA proposal will cost 45,000 jobs and damage small Iowa companies, he said.

It will not only be a blow to conventional renewable fuels, but also will dampen progress on advanced biofuels, said Matt Erickson, an economist with the American Farm Bureau Federation, on the Dec. 4 conference call.

It will also drive up the price of gasoline for consumers, while at the same time driving down the price of corn and costing jobs, Branstad said.

Biodiesel

Appleton farmer Ed Hegland said the EPA has increased the requirements for biodiesel and the industry has grown to fulfill those standards. The biodiesel industry is on pace to produce 1.7 billion gallons of biodiesel this year. Only 1.3 billion gallons qualify for Renewable Identification Numbers. With a cut, only half of the nation's biodiesel production will be eligible for RINs in 2014.

"It's really frustrating to do what we were asked to do as an industry and fulfill this and then be put on hold and frozen at the 2012 level," said Hegland, who is a former chairman of the National Biodiesel Board and continues to represent Minnesota soybean farmers on the board.

He hears the Obama administration talk about using all of the above strategies and finds this proposal going in the wrong direction. Biodiesel has high feedstock diversity; it can be made from animal fats, recycled cooking oil and research continues on algae and camelina.

If the administration pulls the rug out from ethanol and biodiesel, nobody is going to put a dime into the next generation of renewable fuels, Hegland said.

Hegland encourages farmers and others to let their congresspeople know where they stand on the issue and to comment. Five of Minnesota's eight congresspeople have signed onto strongly worded letters to raise the RFS levels. He recently met with Rep. Collin Peterson and Sens. Al Franken and Amy Klobuchar and all three expressed frustration with the EPA proposal.

RFS has to go

Not all in agriculture support the RFS. Several livestock groups, including the National Cattleman's Beef Association, National Chicken Council and the National Turkey Federation, have come out against the renewable fuel standard.

"Chicken producers are already competing with the weather," said NCC president Mike Brown in a press release. "Why must we also compete with an inflexible federal mandate that voluntarily places another strain on our limited resources?"

"The RFS needs a fresh start in order to put in place a smarter policy on the mix of fuel and feed," Joel Brandenberger, president of the National Turkey Federation.

"Congressional action to repeal the RFS remains the most viable pathway to allowing all users of corn to have equal standing in the marketplace," Brown testified at last week's EPA hearing.

"NCBA supports the EPA's proposed rule as it's a step in the right direction, but more still needs to be done to level the playing field for all users of corn," said Steve Foglesong, a past president of the National Cattlemen's Beef Association. "There is still work to do and we will continue to work with Congress to bring reform to the RFS."