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Stay the course on RFS, farmers say

By Jean Caspers-Simmet
simmet@agrinews.com

Date Modified: 02/03/2014 10:19 AM

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DES MOINES — Farmers say the renewable fuels industry they built has created untold opportunity to their rural communities, and the Environmental Protection Agency needs to leave the Renewable Fuels Standard alone.

The delivered the message during a recent "Hearing in the Heartland" in Des Moines.

Ron Heck, a Perry farmer and chairman of the Iowa Biodiesel Board and an Iowa Soybean Association director, said EPA'a proposed rule would be a giant step backward.

Iowa biodiesel plants have the capacity to produce 350 million gallons of biodiesel per year and support 5,000 jobs throughout the value chain.

"Nearly everyone loves biodiesel — row crop and livestock farmers, petroleum marketers in Iowa, consumers, folks who care about clean air, rural communities that need jobs," Heck said. "Engines love it."

He said the only segment that objects is "major oil companies who dislike competition from biodiesel."

"We've been doing our part exceeding RFS targets every year," Heck said asking that the EPA at least establish a blend requirement consistent with this year's projected production of 1.7 billion gallons.

Pam Johnson, a Floyd farmer and National Corn Growers Association chairwoman, said the renewable fuels industry backed by the certainty of the RFS allowed her two sons and other young people to return to the farm.

"Uncertainty regarding the RFS erodes confidence, undermines potential investment and generally stifles the robust growth we have seen in the heartland," said Johnson. "Decisions about this year's crop have already been made. In the past the RFS has provided some certainty that there will be a viable commodity market, but EPA's proposed rule eliminates this certainty. "

Charlie Kollasch's son, Matt, has been able to return to their Algona farm because of the opportunities created by ethanol production. Their operation has harvestedg biomass for two years for the cellulosic ethanol plant that POET-DSM Advanced Biofuels will open in Emmetsburg this year. The plant will give his operation an additional $20 to $30 per acre return, "a big help in showing a profit in 2014," and "a new opportunity for a young farmer to fit into the operation by baling corn stalks."

Brad Nelson, a Clarks Grove, Minn., farmer, who helped develop and has been part of an ethanol plant in Freeborn County for 20 years, said the plant has had a tremendous economic development impact.

"They're building a new school in Wells, and ag property will pay for the bulk of it," Nelson said. "Property taxes have absolutely exploded and are funding county and city government and school districts in rural Minnesota."

Dave Sovereign, a Cresco farmer, shared how he and 29 neighbors built a renewable fuels retail station by investing their own money as well as state and federal grants.

"Since we opened in September 2012, we have experienced only positive economic results," Sovereign said.

The station's 2013 sales data show 71 percent of gasoline sales volume was for ethanol blends of E15, E20, E30 and E85. Unleaded and E10 were 29 percent of total sales volume.

"This would indicate to me that when consumers have a choice of fuels to purchase, there isn't a blend wall," Sovereign said. "In 2013, a single fuel station in northeast Iowa generated a savings of ethanol blends to motorist of more than $70,000 over conventional fuels."

Those dollars were invested back in the community.

"You can see the impact of one station on renewable fuels in one local community," Sovereign said.

Walt Wendland, president and CEO of Golden Grain Energy in Mason City and Homeland Energy Solutions in Lawler, said he and his wife lost their farm in the 1980s when the export market disappeared and corn prices fell below the cost of production.

In 1994 he returned to agriculture as a partner in a dairy operation and in 2001 was asked to help build an ethanol plant that led to the formation of Golden Grain Energy.

"As chairman I raised $27 million in local investment," Wendland said. "Four years later, an offshoot of that group raised about $90 million to build a second ethanol plant, Homeland Energy Solutions."

Project organizers were able to raise the money "because of the RFS and the promise government made to industry on which it is now turning its back."

The two plants have boosted the local economy by over $42.8 million in wages and benefits, $2.75 billion in payments for corn and $100 million distributed to investors, who are mostly farmers, small businesses and area residents.

Wendland's son is now farming, something he never would have encouraged prior to the RFS.

"Agriculture does not want to go back to the ways of the 1980s but without the stabilizing effects of RFS it could happen," Wendland said.