Ethanol-friendly governors call on Congress to maintain RFS

Source: Amanda Peterka, E&E reporter • Posted: Thursday, March 14, 2013

The governors of two major ethanol-producing states today called on House leadership to maintain support for the renewable fuel standard, a 2007 policy that sets annual targets for corn-based ethanol and advanced biofuels.

In a letter to House Speaker John Boehner (R-Ohio), Govs. Terry Branstad (R) of Iowa and Pat Quinn (D) of Illinois said they believed there was widespread support for the RFS despite a “well-funded, unrelenting and false” campaign calling for its repeal. The two farm-state governors said they have seen “firsthand” the beneficial effects of the RFS, which calls for 36 billion gallons of ethanol and advanced biofuel production by 2022.

With 41 ethanol refineries capable of producing 3.7 billion gallons a year, Iowa is the No. 1 ethanol-producing state in the country and last year accounted for about 28 percent of the country’s total production. Illinois, with an annual capacity of about 1.4 billion gallons, ranks third.

“We belong to different parties and do not share the same views on every issue,” Branstad and Quinn wrote. “However, we strongly agree that continued expansion of our domestic biofuels industry through a strong renewable fuels standard is essential for our nation’s energy and economic future.”

Branstad is the chairman of the Governors’ Biofuels Coalition, a 36-member group that has supported federal biofuel policy. Quinn is the coalition’s vice chairman. The group today is finishing up its annual meeting in Sioux Falls, S.D.

Legislation to modify the standard and talk of repealing it have hurt the ethanol industry, the governors wrote Boehner. They criticized arguments that ethanol is contributing to increases in global food prices, blaming higher prices instead on increased meat demand from China and a devaluation of the U.S. dollar.

The governors said “misinformation” being spread by opponents of the RFS would cause the United States to miss an opportunity to displace foreign oil imports.

“The uncertainty created by the proposed RFS modifications has made investment more difficult and weakened the market for biofuels, despite falling biofuels production costs brought about by private sector innovation,” the governors wrote. “The current flexibilities and safeguards into the RFS are working. … [W]e urge you to reject any modifications to the RFS.”

Opponents of biofuels policy include a strange-bedfellow array of oil industry groups, food producers, automakers, environmental groups and livestock industry organizations (Greenwire, Feb. 5). Calls to reform the RFS have grown in the past several days as the price for ethanol credits has spiked, causing uncertainty in the market.