Iowans defend ethanol mandate in D.C.

Source: Written by CHRISTOPHER DOERING Gannett Washington Bureau • Posted: Monday, December 9, 2013

Branstad, others show support for ethanol at EPA’s hearing about proposal to cut gasoline blend requirements

WASHINGTON — From the farm to the governor’s mansion, Iowa’s ethanol boosters joined forces in Washington on Thursday to defend their industry as the White House considers changes that could crimp future demand for the fuel.

Biofuel supporters told Environmental Protection Agency officials that a rollback in the amount of biofuels that must be blended into gasoline in 2014 — the first time the White House has considered lowering the controversial mandate — would have a deep and long-lasting impact on ethanol-producing states such as Iowa, the country’s largest producer of the fuel.

In a passionate speech, Gov. Terry Branstad, who flew in from Iowa to testify at the hearing organized by the EPA to take comments about the proposal, was critical of the Obama administration. The Republican Branstad said by lowering the blending requirement Democratic President Barack Obama had turned his back on Iowa voters who helped put him in the White House.

“People in Iowa feel betrayed when somebody who has been an advocate for renewable fuels and a supporter of this, his administration has reversed course and is going to cut the Renewable Fuel Standard,” Branstad said in a blistering attack against the oil industry and the Obama administration. “This is going to drive us into what could be another farm crisis. It makes no sense. (The EPA) needs to listen to the people in the heartland that know what is going on.” The Renewable Fuel Standardis a law expanded by Congress in 2007 that requires refiners to buy alternative fuels made from corn, soybeans and other products.

Branstad, who received a short round of applause from the crowd after his remarks, said he would speak in Washington later on Thursday with EPA Administrator Gina McCarthy to discuss theproposed cut. A request to meet President Obama was turned down, he said.

“The EPA is now caving in to the demands of Big Oil, who has always resisted renewable fuels from the beginning,” said Branstad, sporting a “Don’t mess with the RFS” pin on his suit. Iowa “will be one of the hardest hit by this proposal.”

Branstad, Iowa farmers and officials from the state’s ethanol and corn industry were among the nearly 150 speakers who gathered to defend and criticize a proposal by the EPA to reduce the amount of the renewable fuel required to be mixed into the country’s gasoline supply next year.

The heated debate has brought pro-ethanol backers from the renewable fuels industry, corn growers and Midwestern lawmakers together in a battle against an unlikely group of bedfellows including oil refiners, livestock producers and restaurant operators — all looking to influence the future of the country’s renewable fuels policy.

In November, the EPA proposed cutting the amount of renewable fuels required in 2014 to 15.2 billion gallons of ethanol and other biofuels, 3 billion gallons below what Congress mandated for next year in the 2007 law. Traditional biofuels, comprised mostly of corn, would be reduced to 13 billion gallons from 14.4 billion. The EPA proposal, which also is open to a 60-day public comment period, is expected to be finalized in the spring of 2014.

Rick Schwarck, president of the Iowa Renewable Fuels Association, said ethanol proponents have a tough road ahead and a limited window in which to change the thinking of the EPA and White House. “Since when has the world of renewable fuels ever not been an uphill climb?” Schwarck said in an interview before he spoke to the EPA. If the agency is “going to pull the rug out from underneath this industry, it doesn’t send a good signal to the business community.”

The oil industry told the EPA the outdated Renewable Fuel Standard is riddled with flaws and needs to be repealed. It contends that as consumers drive less and vehicles become more efficient it’s harderfor refiners to meet rising blending level requirements set by Congress in fuel that contains 10 percent ethanol.

While the EPA has approved fuel with 15 percent ethanol for most cars and trucks built since 2001, oil refiners and automakers have said consumer demand for higher blends hasn’t materialized and there is a possibility it could damage engines.

Bob Greco, downstream group director with the American Petroleum Institute, told the EPA panel the Renewable Fuel Standard is based on a “flawed presumption.”

“These rigid requirements are obsolete and have no place in today’s energy market,” said Greco, whose organization represents more than 550 oil and gas companies. “We will continue our call for Congress to repeal the RFS to protect consumers from this outdated and unworkable program once and for all.” Lawmakers from non-corn-producing states have introduced legislation to end or curtail the Renewable Fuel Standard, including one proposal that would cap ethanol blend levels at 10 percent.

During Thursday’s hearing, proponents of the renewable fuel mandate warned the EPA that trimming the blending level would amount to succumbing to the oil industry’s fear campaign and be a huge blow to farmers, ethanol producers and rural economies that depend on the corn-based fuel. They warned of lost jobs, a drop in income for farmers through lower corn prices, higher gas prices for consumers and a struggle to raise funds to invest in the next generation of renewable fuels.

“If we reduce this mandate we’re going to lose the incentive to keep innovating,” U.S. Rep. Bruce Braley, D-Ia., said. “This has a profound impact on my state.”