Biofuel industry attacks bipartisan bill ending corn ethanol mandate 

Source: Niina Heikkinen, E&E reporter • Posted: Monday, March 2, 2015

Biofuel industry leaders yesterday slammed a proposed bill that would effectively eliminate an implicit corn ethanol mandate in the renewable fuel standard.

Sens. Pat Toomey (R-Pa.) and Dianne Feinstein (D-Calif.) introduced the “Corn Ethanol Mandate Elimination Act of 2015,” with Sen. Jeff Flake (R-Ariz.) as a co-sponsor.

“The RFS requires fuel suppliers to blend millions of gallons of biofuels — most often corn ethanol — into the nation’s gasoline supplies. It drives up gas prices, increases food costs, damages car engines, and is harmful to the environment,” said Toomey in a press release.

Industry leaders strongly disagreed.

“It’s a misguided solution,” said Bob Dinneen, president and CEO of the Renewable Fuels Association (RFA), in a conference call. “[Feinstein] is simply wrong in suggesting that the existing RFS is getting in the way of other renewable fuels. The whole notion that there is a corn ethanol mandate is wrong.”

The RFS, which first came into effect in 2005, required that 18 billion gallons of renewable fuel be blended with gasoline in 2014. Almost all of that amount came from corn ethanol.

“A significant amount of U.S. corn is currently used for fuel. If the mandate continues to expand toward full implementation, the price of corn will increase. According to the Congressional Budget Office, that would mean as much as $3.5 billion each year in increased food costs. Americans living on the margins simply can’t afford that,” Feinstein said in a statement.

Keith Alverson, a member of the Corn Board of the National Corn Growers Association (NCGA), said the opposition to corn ethanol was based on outdated science that did not take into account recent improvements in cultivation efficiency. Over the past 30 years or so, he said, production rates have doubled, and even with corn ethanol, “we have more corn available today for other uses than we did before the RFS.”

Industry: More corn means more advanced biofuels

Corn production for fuel use has increased from 1.6 billion bushels in 2005 to 5.3 billion bushels in 2014. Over the same time period, overall corn production went from 11 billion bushels in 2005 to 14.2 billion bushels in 2014. The price farmers received for their crop rose from $2 per bushel of corn in 2005 to $3.65 per bushel in 2014, according to data collected by the Department of Agriculture’s Economic Research Service.

While corn ethanol-based biofuel makes up the majority of biofuels currently on the market, the goal of the bill is to encourage greater production of alternatives from different kinds of feedstocks.

However, according to Jeff Lautt, CEO of the ethanol company POET-DSM, actions that reduce the production of grain-based ethanol would also hurt production of biofuels. That is because many corn ethanol producers are also producing advanced biofuels and are sharing infrastructure, roads, storage and staff, as well as some of the same feedstock suppliers.

“The Feinstein-Toomey bill would make things vastly worse. It would hurt the very people who are investing in advanced biofuel,” Lautt said.

Brooke Coleman, executive director of the Advanced Ethanol Council, warned that if such limits on grain-based companies were put in place, companies would take their business abroad. Brent Erickson, executive vice president of Biotechnology Industry Organization (BIO), suggested that placing limits on ethanol would instead lead to an increase in the use of petroleum-based fuels.

Even if the bill does not come to a vote, Coleman said the fact that the legislation was publicized could have a chilling effect on investment for advanced biofuel research.

“Not everyone understands the unlikelihood that this becomes law, it will probably never be signed, but investors seeing that perceive that as a risk,” he said. “That’s the downside of unsuccessful legislation.”