Comment: Bartholomew L. McLeay: EPA should uphold law on ethanol

Source: BY BARTHOLOMEW L. MCLEAY, Kansas City Star • Posted: Tuesday, October 21, 2014

The Environmental Protection Agency has been swarming around agriculture all year like locusts, invading farm fields with new water rules, imposing stifling new coal standards certain to disrupt future energy supplies and placing disguised limits on normal farming activities exempt from regulatory reach.

Nothing would be more unfair to rural America than changes now under consideration by EPA concerning the Renewable Fuel Standard (RFS).

RFS is a federal law designed to ensure a minimum amount of ethanol and biodiesel is purchased by U.S. refiners for blending into the nation’s fuel supply. EPA announced it was considering imposing a 1.4 billion gallon reduction this year.

RFS was enacted in 2005, and expanded in 2007, as a matter of national security. The United States could no longer wait to wean itself from price-gouging foreign oil suppliers.

Rural Americans fully subscribe to the free market, but they try to avoid appearing like they just fell off a turnip truck. They knew in 2005 a free market could not be made to work quickly in a capital-intensive industry like ethanol as long as huge oil conglomerates hold a gripping power on fuel distribution.

Enter RFS.

Congress led rural America to believe strict volume purchase requirements in RFS for corn ethanol, for example, would keep them safe. The law is clear. RFS is not to be reduced through 2022 unless it is shown to harm the economy or environment or there is an inadequate domestic supply.

None of these conditions exist.

Word on the country road, however, is EPA is considering reductions in RFS. That’s unfair. RFS is not a subsidy. It is not a hand-out. No farmer or ethanol producer will receive a single penny from taxpayers if RFS is unchanged.

RFS honors a promise. For many ethanol investors, their equity investment, financial and sweat, has only recently become positive.

EPA appears to be tilting at windmills about a “blend wall” supposedly reached when gasoline is limited to 10 percent ethanol (E10) and a related claim that higher ethanol blends like E15 damage vehicles. These claims are made of fumes.

E15 is acceptable in 75 percent of cars, trucks and SUVs on the road. Numerous studies have found no “meaningful differences between E15 and E10 in any performance category.” NASCAR uses E15 on “every lap.”

There would be no blend wall or RFS reduction if E15 was not suppressed by certain Big Oil inerests. Ask Zarco USA in Lawrence. Zarco refused the demand of a top five oil company to use premium gasoline over E15. Zarco is now a former franchisee.

An RFS reduction is unfortunate for other reasons. Ethanol is the cheapest and highest performing fuel on the market and approved under all current U.S. automobile warranties. According to industry sources, corn ethanol annually reduces greenhouse gas emissions by 34 percent compared to gasoline, equivalent to removing eight million cars from the streets.

The Congressional Budget Office confirmed food prices will not rise due to RFS. Corn ethanol further generates a nutritious animal feedstock.

In all, ethanol increased GDP by $44 billion in 2013 and indirectly created hundreds of thousands of jobs.

EPA should uphold RFS. It brings new domestic energy and cleaner air.

Bartholomew L. McLeay is an Omaha, Neb., lawyer practicing in agriculture and energy law.

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