Obama admin committed to growing industry to full RFS level — Vilsack

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, September 17, 2014

The Obama administration wants to see the corn ethanol industry grow to the full extent that Congress envisioned when it passed the renewable fuel standard in 2007, Agriculture Secretary Tom Vilsack said today.

Addressing concerns about a recent proposal by U.S. EPA to scale back this year’s mandate for ethanol, Vilsack said the administration is “committed” to working with ethanol producers to meet that 15-billion-gallon target.

“There may be details here or there, but at the end of the day that’s the most important thing — that there is a commitment on the part of this administration and on the part of the industry to get to 15 billion gallons,” Vilsack told an ethanol industry audience this morning in Washington, D.C.

The 2007 renewable fuel standard called for the corn ethanol industry to grow until it reached 15 billion gallons, when it would be capped to allow for second-generation biofuels to flourish. But the oil industry has raised concerns that that level of ethanol in the market would cause it to breach the “blend wall,” the term given to the limit for the amount of ethanol that can be used in fueling infrastructure.

For the first time in 2014, EPA proposed to scale back the year-by-year target for ethanol down to about 13 billion gallons on blend wall concerns, compared with the 14.4 billion gallons Congress expected the industry to produce in 2014. A final version of the rule is currently at the White House for review; although it’s widely expected to contain a higher target than 13 billion gallons, it will likely still call for a ratcheting down of ethanol use.

Acknowledging the EPA rule, Vilsack said he believes the end goal is still the RFS target of 15 billion gallons.

“I’m reasonably sure that the numbers are going to be higher and I’m reasonably sure that as we look at the rule as it comes out, there will be a commitment to a plan or strategy working with the industry to get to 15 billion gallons,” Vilsack said.

The ethanol industry has a responsibility, though, to put forward a viable strategy for meeting that target, Vilsack said. He said his own plan for overcoming infrastructure issues would include increasing exports overseas, creating new markets for co-products from the ethanol process, addressing domestic distribution issues and seeking more collaboration with the Department of Defense.

He said the Agriculture Department would work with the industry in whatever way it can, including providing funding for gas stations to install pumps that can handle higher blends of ethanol. Although EPA allows up to 15 percent ethanol to be used in cars with model years 2001 and newer, the vast majority of gasoline sold in the United States still contains 10 percent ethanol.

Vilsack chided the audience — members of the Growth Energy ethanol trade group — for focusing all its attention on the renewable fuel standard itself and said that it should be focusing on the industry’s “bright future.”

“The focus, and I understand it, it has got to be on the RFS today, but it has a tendency to be a negative message. It says, ‘My God, if this doesn’t get fixed we’re done,'” Vilsack said. “Well, we don’t want to be saying we’re done, because we’re not. We’re just getting started.”

After the speech, Growth Energy CEO Tom Buis said his group is focused on getting more ethanol into the marketplace but that it plans to keep the attention on the renewable fuel standard on Capitol Hill. He applauded Vilsack for committing the administration to 15 billion gallons.

“We’ll have to wait and see, but I take the secretary for his word. Certainly he’s been a strong champion. There should be a commitment,” he said. “Over 40 years this country has suffered the ill effects of being dependent on foreign oil.”

Buis said he believes that the final 2014 RFS rule would include a higher target for ethanol but that Growth Energy is concerned the rule would still base the target on the blend wall arguments raised by the oil industry.

Growth Energy members brought that message to an administration briefing yesterday that included White House energy and climate adviser Dan Utech and representatives from the U.S. trade representative, Domestic Policy Council, Department of Energy and USDA.

Buis said he and Renewable Fuels Association President and CEO Bob Dinneen are also scheduled to meet today with the White House Office of Management and Budget on the RFS. It’s not clear when EPA will release the final rule.