Midlands Voices: Keep RFS going strong for state

Source: By Todd Becker, Omaha World Herald • Posted: Monday, August 17, 2015

Ten years ago this month, the bipartisan Energy Policy Act was signed into law by President George W. Bush and established the Renewable Fuel Standard (RFS) to help reduce our dependence on foreign oil, decrease carbon emissions into the atmosphere and decrease prices at the pump. It has allowed us to harvest homegrown, natural energy for fuel, without relying on big oil companies and hostile foreign nations.

Passage of the standard led to the creation of an entirely new industry in renewable fuels production. Billions of dollars were invested, and the United States became a world leader in ethanol production.

Here in Nebraska, the RFS led to a booming renewable fuels industry, which had an economic impact of about $5 billion last year, according to a University of Nebraska study. The industry employed 1,300 people, with wages 21 percent higher than the state’s average manufacturing wage, and it supported another 3,300 indirect jobs.

In fact, we have the RFS to thank for helping the state through the recent economic recession, due to our large agricultural economy. While the price of corn has decreased to pre-RFS levels, the productivity of that same acre has increased to help offset this. The RFS has led to a renaissance of greater crop production through investment in technology supported by the demand ethanol brings to U.S. corn production.

As CEO of Green Plains, I have experienced firsthand how this burgeoning ethanol industry has impacted our communities and caused positive ripple effects throughout our entire economy, especially here in America’s heartland.

On the national level, a 2014 study by the research consulting firm Dunham and Associates estimated that over 850,000 American jobs have been created since passage of the RFS, driving investment to rural farm assets by a staggering $500 billion. And according to USDA, 28 percent of the 13.5 billion bushels of domestic corn production went to produce corn ethanol in 2014.

The United Nations recently reported that the FAO Food Price Index is at the lowest level since June 2010. This is a testament to the innovation and productivity of the U.S. farmer, of which Nebraska has plenty.

Ethanol costs refiners 28 percent less than petroleum products used in gasoline fuel. Ethanol is the cheapest molecule and the cheapest octane in the fuel tank and the world.

America’s big automakers are recognizing this — and the additional benefits of ethanol blends in gasoline — and have changed their production standards to design cars to run on higher ethanol mixtures than the current 10 percent blending requirement. They realize it is worth the investment.

Now, after a multi-year delay, the Environmental Protection Agency has proposed renewable fuel volumes for 2014, 2015 and 2016 that are significantly lower biofuel blend requirements than mandated by law. These levels do not meet the intent of the Energy Policy Act of 2005, and they are not what hardworking Nebraska farmers and ethanol producers deserve.

With any new technology and industry, there are growing pains and new investments in infrastructure needed, but a lot of these steps have already been accomplished. The groundwork has already been laid. The EPA’s proposed, lackluster blend requirements make it appear like they’re turning away from this booming industry. That would be a tragic mistake.

The RFS brings a clean, domestic choice to the energy marketplace that has been previously dominated by Big Oil — which, by the way, receives a healthy allotment of government subsidies, all while the ethanol industry gave up any direct subsidies at the end of 2011. If the EPA issued strong, increasing renewable fuel levels, as they are supposed to for the next seven years, we could finally break the monopoly that Big Oil has on our fuel tank at little or no cost to the consumer.

From decreasing American dependence on oil from nations in the Middle East to driving down the retail price of gasoline and creating an entirely new industry, the RFS has been a successful economic policy. It is the modern-day farm program with no direct cost to taxpayers. Efforts by the EPA to roll back the RFS could cripple this nascent, prosperous new industry and have negative ripple effects throughout our local, state and national economies.

The RFS has supported our community in Nebraska for the last 10 years. Let’s make sure it continues to do so for the next seven years and finally give consumers a better choice of fuel at the pump.

The author is chief executive officer of Green Plains Inc., an Omaha-based ethanol producer.