Iowans weigh in on plan to cut ethanol blend requirement

Source: Written by CHRISTOPHER DOERING, Gannett Washington Bureau • Posted: Monday, January 27, 2014

Comments by residents, lawmakers and businesses in the state are largely critical of the plan.

Iowans on both sides of the debate

For the proposal: “Our local politicians, including our governor, are lobbying hard to increase ethanol production, and they are backed by powerful agriculture and ethanol lobbies,” said Gene Szymkowiak, an Iowa City veterinarian and landowner. “Please do not back down on your plans to reduce the mandated ethanol production.” Szymkowiak said ethanol production has resulted in a series of negative effects on land use in Iowa, increasing nitrogen and phosphorous runoff, soil loss and a reduction of habitat for birds, animals and insects as more land goes to producing corn.

Against: Carl Goodson, wastewater superintendent for the city of Corning, said the nearby Poet ethanol plant has been a prominent supporter of community groups ranging from the local fire department and schools to FFA and 4-H. “Reducing the volumes of ethanol used would dramatically damage local agriculture as well as their ability to continue supporting our local charities,” Goodson wrote.

WASHINGTON, D.C. — The Obama administration’s push to lower the amount of ethanol that must be blended into the country’s gasoline supply this year has drawn thousands of comments from the public, including a large number from residents, lawmakers and businesses in Iowa, where respondents are largely critical of the controversial proposal.

In remarks submitted to the Environmental Protection Agency, supporters of the Renewable Fuel Standard have chided the agency’s decision to cut the blending requirements. They point to ethanol’s role in boosting the agricultural economy and promoting financial growth through the creation of jobs, tax revenue and other benefits. Many worry lowering the federal mandate could harm that growth.

“The bottom line is that this proposal would have a devastating ripple effect on investment in ethanol plants, their production and the jobs they support — as well as the surrounding communities,” Dave Glasnapp, an investor in an ethanol plant in Gowrie, said in a comment to the EPA.

“During a time of economic uncertainty, we need to capitalize on the opportunities, such as biofuel production, to spur investment and innovation to keep America and our rural economy strong. This is not an exaggeration, it is the reality,” Glasnapp said.

His was one of about 15,000 comments received by the end of the week by the EPA. The 60-day public comment period ends Tuesday.

Soliciting public comment on a government proposal is a normal step in the regulatory process. After the comment period closes, the EPA reads those remarks and considers whether to make changes to its proposal before issuing a final rule.

The large number and the tone of the comments on this proposal illustrate what’s at stake: billions of dollars and a clearer picture of the future of renewable fuels use in the United States.

A change to the Renewable Fuel Standard would alter the way the EPA implements the mandate. In the past, the EPA largely followed the annual level requirements put in place by Congress, helping to drive new markets and spur demand for the renewable fuel. The proposed reduction — a move even some in the oil industry have called substantive — would shift the process to one that sets the requirements based on expected market demand.

“This (proposed) rule, as it stands, is a win for oil companies and a loss for consumers and farmers,” Kim Vosberg, a Manson farmer, wrote to the EPA. “Before the RFS was implemented, I struggled to sell my corn at a fair price. In fact, it is directly due to the RFS that my farming operation has become so successful.

The proposal by the EPA, which oversees the country’s Renewable Fuel Standard, would cut the fuel requirement in 2014 to 15.2 billion gallons of ethanol and other biofuels, 3 billion gallons less than Congress required in a 2007 law.

It would mark the first-ever drop in the Renewable Fuel Standard, which requires refiners to blend ever-increasing amounts of biofuels into the nation’s gasoline supply through 2022.

The thousands of responses so far include several from Iowa, the country’s largest ethanol producer with 41 plants capable of producing more than 3.7 billion gallons annually. Most of the responses collected and posted by the government are from local residents or anonymous individuals.

“The volume of comments received so far is large in comparison to the volume we have seen in response to previous RFS annual volume standard rules, but we anticipated a high degree of interest in this proposal due to the number of issues on which we requested comment,” said Enesta Jones, an EPA spokeswoman. The agency did not plan to extend the comment period, she said.

Remarks from major players on both sides of the ethanol debate have either not been posted, or the groups are waiting until shortly before the deadline ends, a common practice when federal regulations are opened up to public comment. The bigger, more influential groups wait until the last minute in part because they want to respond to points made by the opposition. Waiting also gives their critics less time to rebut their arguments. The EPA said it expects to issue its final 2014 blending-level rule in the spring.

Those who oppose rolling back the amount of renewable fuels promoted the mandate’s well-documented role in helping spur demand for corn, boosting land values, lowering demand for foreign oil, easing gas prices for consumers and creating jobs. They highlighted the side businesses that the mandate has created such as trucking repair and other maintenance services, as well as other benefits that have resulted, such as better roads, medical facilities and resources for local schools resulting from higher tax revenue.

In a rare move of bipartisan politics, the suggested change to the Renewable Fuel Standard has brought together Iowa’s Washington delegation as well as Republican Gov. Terry Branstad. Branstad, who said the cut to the mandate showed that President Barack Obama was turning his back on Iowa voters who helped put him in the White House, told the EPA in December that his state “will be one of the hardest hit by this proposal.”

But a handful of comments submitted to the EPA urged the agency to stand firm.

The oil industry has argued the mandate is outdated, is riddled with flaws and needs to be repealed. As consumers drive less and vehicles become more efficient, it’s more difficult for refiners to meet the rising blending level requirements set by Congress in fuel that contains 10 percent ethanol.

The American Petroleum Institute, which represents more than 580 oil and natural gas companies, has been among the groups warning that refiners are bumping up against a “blend wall,” a level where refiners must include more ethanol in the country’s fuel mix than can be blended in at a 10 percent threshold accepted in all cars and trucks.

Patrick Kelly, API’s senior fuels policy adviser, said the organization plans to tell the EPA in its comment letter this week that the agency is doing the right thing by acknowledging the existence of the blend wall and is justified in using its waiver authority granted by Congress to scale back the mandate. The group also will press upon the EPA that a slightly larger drop in the 2014 level would ensure refiners do not pump up against the blend wall.

“We’re hoping to bolster their justification that they’ve already used to acknowledge the blend wall,” said Kelly. “We’re looking for EPA to continue on the course that they’ve plotted out. We just want to make sure the EPA follows through with what they propose