No waiver on support for ethanol industry — Vilsack

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, September 12, 2012

Agriculture Secretary Tom Vilsack today mounted a strong defense of the ethanol industry, urging against calls to waive the federal renewable fuel standard to ease the pressure on livestock producers affected by the drought.

In a speech in Washington, D.C., to members of the ethanol trade group Growth Energy, Vilsack promised to convey his support to U.S. EPA Administrator Lisa Jackson, who is ultimately responsible for deciding whether to waive the standard. He said the Department of Agriculture would continue to back the domestic biofuels industry through programs that fund the commercialization of the advanced biofuels industry.

“I know that this has been a stressful time for the industry. I know that there have been inconsistent messages from our friends in Congress about support for this industry. And I know that there are some who are asking for a change, a waiver, an elimination of the renewable fuel standard,” Vilsack said.

“I have conveyed and will continue to convey to Administrator Jackson and to others at EPA and to the country my support for this industry,” he added.

Vilsack’s speech came amid a lobbying push this week by ethanol interests as Congress returns to Washington from a five-week recess. Both Growth Energy and the Advanced Ethanol Council — which includes many of the companies building commercial-scale advanced biofuel plants — are in town meeting with members of Congress to rally support for the renewable fuel standard.

The standard this year requires that refiners blend 13.2 billion gallons of traditional ethanol into the nation’s fuel supply. It has taken a beating from livestock industries, which argue that corn ethanol has driven up the price of livestock feed during the drought, and that consumers will pay for it at the grocery store.

In comments after the speech, Vilsack tossed aside the notion that biofuels are competing against food for land and are responsible for driving up food prices.

“Commodity prices are going up, but it doesn’t necessarily correspond dollar for dollar, cent for cent, with food price increases because farmers in this country receive a relatively small percentage of the overall food dollar,” Vilsack said. “If there’s current increases in food costs, in this country, it’s not a result of commodity prices. It’s most likely a result of rising oil prices.”

EPA has opened a comment period ending Sept. 26 on requests from governors in livestock states asking that the agency waive the corn ethanol standards for at least a year. The National Corn Growers Association, which has supported the standard, has requested an extension.

“The fact that corn ethanol is vilified is a hard pill to swallow,” Pam Johnson, first vice president of the corn growers group, said today. “Farmers are kind of feeling beat up on.”

Repeating what ethanol groups have maintained during the whole argument, Vilsack said that the market was responding to the drought and that all sectors of the rural economy — including livestock and ethanol — are scaling down production.

He also said the renewable fuel credit system, in which refiners can buy and trade credits for biofuel, gives the standard built-in flexibility that was meant for times of shortage, which the drought has created. Vilsack also pointed to recent studies showing that a waiver in the standard won’t necessarily stop the production of ethanol because it remains economically attractive (E&ENews PM, Aug. 16).

“I don’t want anybody to leave here today thinking at USDA that there is any waiver on our support for t