State biofuels mandate gets first airing in Iowa legislature

Source: By O. Kay Henderson, Radio Iowa • Posted: Thursday, February 18, 2021

Governor Kim Reynolds says it’s time for an ethanol mandate in Iowa, to boost an industry battered by the EPA’s resistance to the federal ethanol production mandate.

“It’s such an important industry to our state and to our farmers,” Reynolds said during a Radio Iowa interview. “…We need to take charge of our own destiny.”

Bills introduced in the House and Senate would require Iowa gas pumps to offer at least a 10% ethanol blend by 2024. There’s also a requirement that all diesel fuel sold in the state include a percentage of soybean-based biodiesel. The plan has the support of the biofuels industry and farm groups.

“Iowa is the number one producer of biofuels, but we are behind many of the other states when it comes to market share of biofuels,” said Matt Steinfeldt, a lobbyist for the Iowa Farm Bureau. “We’re also behind several other states when it comes policies that promote our biofuels.”

Gas stations, truck stops and convenience stores oppose the bill. Matt McKinney, a lobbyist for Kum & Go, said expenses for retailers to comply with the mandate will be passed along to motorists.

“Consumer behavior is driven by price,” he said, “and our review of this bill demonstrates that prices will increase and choice will decrease.”

Dave Scott, a lobbyist for the Iowa Motor Truck Association, said semis can travel hundreds of miles before refueling and “the person who pays the bills” rather than the state should decide what kind of fuel to buy.

“Fifty percent of our members restrict states where it can be purchased,” Scott said. “We don’t want Iowa to be one of those states.”

Companies that operate the pipelines and terminals oppose the bill, too, and warn facilities have to spend millions to be able to handle higher blends of biodiesel. Drew Klein, state director of Americans for Prosperity, said the bill uses regulation to manipulate the market.

“I won’t refer to it as a mandate, but it certainly is some pretty stiff draconian regulation,” he said, “and in our opinion regulation should be only used to protect public safety.”

Brad Wilson, general manager of Western Iowa Energy in Wall Lake, suggested the governor’s plan corrects a market imbalance.

“We have been forced to allow ‘big oil’ and petroleum companies to be winners for decades,” Wilson said, “so let’s show that we’re a rural state here in Iowa and allow farmers to…make a stand against ‘big oil.’”

Nick Bowdish, CEO of Elite Octane — an ethanol plant in Atlantic, said many petroleum marketers prevent retailers from selling ethanol and biodiesel.

“Our state has 52 ethanol plants and biodiesel plants combined and zero petroleum refineries,” Bowdish said, “so if we want the consumer to have more choice, this is the exact type of legislation we need to enact so that all retailers can offer these fuels to consumers.”

The bill has cleared initial review in House and Senate subcommittees. One senator used the phrase “fast and furious” to describe the debate between supporters and opponents of the plan.