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Proposal to trim RFS would harm farmers and Midwest economy, officials tell EPA

By Jean Caspers-Simmet

Date Modified: 02/03/2014 10:22 AM

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DES MOINES — Midwestern biofuel supporters urged the Environmental Protection Agency not to reduce 2014 volume obligation levels in the Renewable Fuels Standard during last week's "Hearing in the Heartland" at the World Food Prize Borlaug Hall of Laureates in Des Moines.

Iowa Gov. Terry Branstad and Lt. Gov. Kim Reynolds, along with other leaders from the Midwest, organized the event after EPA administrator Gina McCarthy declined to host a hearing in Iowa.

"The EPA's proposal on the RFS would have devastating affect on growth and job creation in rural America," Branstad said. "The proposed rule by the EPA would have a direct impact on the 42 Iowa ethanol plants, 12 Iowa biodiesel plants and the scores of facilities across the Midwest."

The proposed rule would result in crop prices dropping below the cost of production and a reduction in agriculture land values, Branstad said.

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

U.S. Rep. Steve King, whose northwest Iowa congressional district is the nation's top ethanol and renewable energy producer, said EPA's proposal puts millions of dollars of capital at risk.

"Farmers built a renewable fuels industry so all the nation's eggs weren't in one basket when it came to energy, and they are competing Btu to Btu," King said. "Now the EPA is jerking the rug out from under them."

What EPA is proposing is "harmful to biofuel producers, to Iowa's rural economy, our national security and our environment," said Sen. Charles Grassley. "I know the value that biofuels have brought to our state.''

The RFS was created by Congress to pull biofuels into the market, Grassley said. Limiting the RFS to levels that can be met with existing infrastructure eliminates the incentive to invest and develop next-generation biofuels.

Indiana Lt. Gov. Sue Ellspermann and ag secretaries from Indiana, Minnesota, Nebraska and South Dakota urged the EPA to change its proposed rule.

"I planned to come up and say, 'What they said,' and sit down," said Minnesota Commissioner of Agriculture Dave Frederickson.

Frederickson said Minnesota has laws that require every gallon of gasoline to have a 10 percent ethanol blend. Its biodiesel mandate will go to a 10 percent blend this year.

Not everyone who spoke at the hearing opposed what EPA is proposing.

Francis Thicke, a Fairfield dairy farmer and soil scientist, said the sky isn't falling for corn ethanol.

"EPA's proposed changes to the RFS are not that radical," Thicke said. " They are just a needed adjustment for changing realities that would be prudent in any other business planning. As EPA's fact sheet put it, 'The proposal seeks to put the RFS program on a steady path forward — ensuring the continued growth of renewable fuels while recognizing the practical limits on ethanol blending, called the ethanol blend wall.' "

Corn ethanol was always meant to be a stepping stone for advanced biofuels, Thicke said.

"The negative reaction to the RFS adjustment is an indicator we've lost track of the ultimate vision for renewable fuels production in Iowa."