Feds give ethanol a boost; Iowa cheers

Source: By Donnelle Eller, Des Moines Register • Posted: Monday, November 28, 2016

Renewable fuel advocates applauded the federal government’s decision Wednesday to boost the amount of ethanol that must be blended into the nation’s fuel supply next year.

The U.S. Environmental Protection Agency set the Renewable Fuel Standard for corn ethanol next year at 15 billion gallons, meeting the target set by Congress.

The agency had proposed requiring 14.8 billion gallons of ethanol earlier this year.

Renewable fuels supporters called it a parting gift from the Obama administration that will help Iowa and U.S. farmers suffering from low prices and declining profits. It also helps struggling rural economies that have seen little of the job growth that’s benefited cities in the recovery, experts said.

The decision is especially important in Iowa, the nation’s largest producer of ethanol and biodiesel.

The EPA’s decision means “higher income for farmers and lower prices for consumers,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association. It means “more jobs in rural Iowa and less dependence on foreign oil.”

“This announcement is good news for Iowa, and in particular corn ethanol producers,” said Sen. Chuck Grassley, who added that “more work needs to be done to increase levels for biodiesel.”

EPA stuck to its proposed requirements for biodiesel, boosting the required level to 2.1 billion gallons in 2018, inching 100 million gallons higher than the levels required in 2017.

Shaw said the biodiesel levels for “2018 fails to keep up with, let alone push, what’s already occurring in the market.”

Past EPA decisions to scale back ethanol increases have led to “unnecessary uncertainty in agriculture and the biofuels industry the last few years,” Gov. Terry Branstad said.

“In this week of Thanksgiving, Iowans should generally be thankful that our nation is moving back toward a robust RFS that is vital to the revitalization of rural America,” Branstad said.

EPA also boosted levels for cellulosic ethanol, made from grasses, wood chips and corn stalks, to 311 million gallons, an increase of 81 million gallons over this year’s target.

That’s also good news for Iowa, home of three cellulosic ethanol plants, the next generation of renewable fuel that must have at least 60 percent fewer greenhouse gases emissions than gasoline.

Bob Dinneen, CEO of the Renewable Fuels Association, said EPA is sending “a positive signal to investors” that will ripple “throughout our economy and environment.

“By signaling its commitment to a growing biofuels market, the agency will stimulate new interest in cellulosic ethanol and other advanced biofuels, drive investment in infrastructure to accommodate E15 and higher ethanol blends,” Dinneeen said, “and make a further dent in reducing greenhouse gas emissions.”

Shaw said the Obama administration had “one last chance” to get the standard “back on track.”

It’s “the type of RFS support that the Obama administration pledged eight years ago,” Shaw said. “It’s a dramatic return to their roots.”

Sen. Joni Ernst said EPA’s decision “spurs investment and research in renewable fuels and supports our rural economy in Iowa.”

Janet McCabe, an EPA acting assistant administrator, said final standard provides “ambitious yet achievable growth of biofuels in the transportation sector.”

“By implementing the program enacted by Congress, we are expanding the nation’s renewable fuels sector while reducing our reliance on imported oil,” McCabe said in a statement.

Shaw’s group said EPA “clearly took into account excess corn stockpiles growing to levels not seen in decades, record U.S. ethanol production, and record levels of ethanol exports.

“Instead of forcing ethanol overseas, more of these gallons will now be used to lower U.S. gasoline prices,” the association said.

The American Petroleum Institute said it was disappointed with EPA’s final rule, calling it a “step backward.”

“The RFS mandate is a bad deal for the American consumer,” said Frank Macchiarola, an API executive, in a statement. “Today’s announcement only serves to reinforce the need for Congress to repeal or significantly reform the RFS. Democrats and Republicans agree this program is a failure.”

Some environmentalists also oppose the mandate, arguing that corn ethanol is more damaging to the environment than gasoline, given changes in land to grow crops.

Renewable fuels supporters have said President-elect Donald Trump has provided consistent support for ethanol and biodiesel, adding that it fits his drive for stronger energy independence and support for rural America.