Biofuels industry presses congressional leaders to maintain fuel rule

Source: By Zack Colman, The Hill • Posted: Friday, October 19, 2012

Biofuels groups pressed congressional leadership Thursday to maintain a biofuels mandate when lawmakers consider drought-relief legislation.

The groups want to keep the renewable fuel standard (RFS) intact. The rule requires refiners to blend 13.2 billion gallons of corn-based biofuel into transportation fuel this year.

The biofuels industry has geared up for a short-term skirmish on the RFS. It wants to defeat a request for a one-year waiver from the rule by a handful of state governors who say it is untenable under drought conditions.

“With so many Americans in distress from the 2012 drought, it may be difficult to accept that the flexibility provisions built into the RFS and the market itself are working to minimize the consumer impact of lower grain yields. But that is exactly what is happening,” the groups said in a Thursday letter to Senate and House leaders.

The traditionally fragmented industry has united in preparation for a protracted battle over the RFS. They say the drought and ensuing waiver requests have raised the rule’s profile.

A bipartisan coalition of lawmakers have backed the governors’ waiver request. They say the RFS has choked off corn supplies during the drought, in turn contributing to record-high prices that have raised operational costs for livestock and poultry producers.

The biofuels industry contends that the drought, not the RFS, is what has pushed prices higher. They say a waiver is unnecessary because refiners already have curtailed biofuel production in response to corn prices, and that enough renewable fuel credits exist to cover the remaining blending requirements.

Industry groups have said honoring the RFS waiver would cool investment in “advanced” biofuels made from non-edible feedstocks. The industry has amplified its outreach to lawmakers to spread that message.

Jim Greenwood, president and CEO of the Biotechnology Industry Organization, told attendees at a Washington, D.C., renewable energy conference on Thursday that supporters must “convince our political leaders that renewables are ready, reliable and competitive.”

“This is not the time to kick the legs out from under renewable fuels. And we should not turn our backs on the 400,000 Americans whose jobs are supported by the biofuels industry. As the advanced biofuel industry grows, good employment opportunities will be within reach for many more Americans,” Greenwood said.