Branstad: Proposed biofuels cut would ruin Iowa’s economy

Source: Written by MATTHEW PATANE, Des Moines Register • Posted: Friday, January 24, 2014

 Gov. Terry Branstad speaks to ethanol supporters who oppose the EPA’s proposed cut to the renewable fuel standard. / AP

A proposed change to a federal standard regulating ethanol use would have a “devastating effect” on Iowa’s economy, Gov. Terry Branstad said Thursday.

Branstad spoke during a daylong “Hearing in the Heartland: Supporting the Renewable Fuels Standard” intended to gather ethanol supporters, Midwestern lawmakers and biofuel company representatives to discuss the change and call on the Environmental Protection Agency to reverse its proposal.

The list of speakers did not include anyone from the EPA, a petroleum company or an oil industry organization.

“I would hesitate to use the word ‘hearing’ because there is no one there to listen,” said Patrick Kelly, senior fuels policy adviser for the American Petroleum Institute, in an interview. “It sounds like an ethanol echo chamber.”

API represents more than 580 oil and natural gas companies and has said the EPA has poorly administered the renewable fuel standard.

Kelly said API was not invited to the hearing, making Thursday’s event “just a show” with no substance.

Late last year, the EPA proposed lowering the amount of ethanol and biofuels that would have to be mixed into fuel supplies under the standard, a move applauded by oil industry associations.

The proposed change would cut the 2014 requirement to 15.2 billion gallons of ethanol and other biofuels, down 3 billion gallons from what Congress initially required. Requirements for traditional biofuels, such as corn-based fuels, would be cut to 13 billion from 14.4 billion.

The proposal has provoked the ire of Iowa officials and ethanol supporters, including Branstad and the state’s congressional delegation, and spurred the creation of Thursday’s event.

Many of the event’s speakers issued similarly phrased remarks, saying the proposal would hurt the Midwestern economy and move the nation’s energy policy in the wrong direction.

Monte Shaw, the executive director of Iowa Renewable Fuels Association, said the EPA rule “is a perfect example of an out-of-touch, broken Washington, D.C.”

“The proposal was clearly a political decision made in the Obama White House driven by the false fear of higher gasoline prices,” Shaw said.

U.S. Sen. Chuck Grassley, R-Ia., said the proposal would throw the nation’s progress on becoming energy-independent in reverse.

“It’s disappointing that a president who claims to be a supporter of renewable energy has allowed his administration to take a step back in lessening our reliance on foreign oil,” Grassley said.

The change would also scare off future investment in ethanol and biofuels, which has seen a large amount of growth, said John Pieper of DuPont Cellulosic Ethanol. The company is building a plant in Nevada that would produce the next generation of ethanol. “A change in this bedrock policy will ensure that investors and entrepreneurs will step back and wait to see what the new policy will do,” Pieper said. “And while they do that, they take their investments elsewhere.”

A public comment period on the EPA’s proposal will close Tuesday.