Branstad warns of harm to rural America if ethanol mandate is cut

Source: by Christopher Doering, Des Moines Register • Posted: Thursday, December 5, 2013

Iowa Gov. Terry Branstad said Wednesday the White House risks harming the rural economy if it moves forward with a plan to reduce the amount of ethanol required to be mixed into the country’s gasoline supply next year.

Branstad, who will be testifying Thursday in Washington at a hearing organized by the Environmental Protection Agency, said cutting the Renewable Fuel Standard in 2014 would cost 45,000 jobs nationally, lead to an increase in gas prices and hurt profitability of farmers through lower corn prices.

“I think the president has made a big mistake caving into Big Oil on this issue,” Branstad told reporters. “The decision the EPA is going to make will have dramatic implications on the economic viability of communities all across this Midwest agricultural heartland. This would be devastating to what has been a robust economic recovery here in the strongest region of the United States.”

In November, the EPA proposed reducing the Renewable Fuel Standard in 2014 to 15.2 billion gallons of ethanol and other biofuels, 3 billion gallons below what Congress required in a 2007 law. Traditional biofuels, comprised mostly of corn, would be reduced to 13 billion gallons from 14.4 billion. The oil industry and other consumer groups have pushed for an end to the outdated Renewable Fuel Standard they contend no longer works as Congress intended.

An estimated 150 people are expected to speak at Thursday’s hearing, including several from Iowa. Branstad, Rep. Bruce Braley, D-Iowa, and Iowans from the ethanol and corn industry are among those scheduled to deliver remarks. The EPA is holding the hearing to collect public input on its proposal. A final rule for 2014 is expected early next year.