Vilsack says Congress should stay away from changing country’s renewable fuels policy

Source: by Christopher Doering, Des Moines Register • Posted: Wednesday, September 11, 2013

The U.S. Congress should back away from its push to change the country’s controversial renewable energy program, Agriculture Secretary Tom Vilsack told the nation’s largest ethanol trade group on Tuesday.

The former Iowa governor, speaking to members of Growth Energy in Washington, said the Obama administration will continue to be “strong” in its support of an eight-year old mandate known as the Renewable Fuel Standard that he stressed continues to work; remarks that drew applause from the friendly audience.

The Renewable Fuel Standard (RFS), created in 2005 and expanded two years later by Congress, requires refiners to buy alternative fuels made from corn, soybeans and other products in order to reduce the country’s dependence on foreign energy.

Lawmakers in Washington have proposed a series of bills to overhaul or end the mandate, a change that would have a big impact locally. Iowa is the country’s largest ethanol producer with 41 ethanol plants that produced 3.7 billion gallons during 2012.

The House Energy and Commerce Committee is working on a bill to change the Renewable Fuel Standard, and House Majority Leader Eric Cantor, R.-Va., said legislation to change the mandate may be included in a package to raise the U.S. debt ceiling.

“There is no need for Congress to intervene in this,” said Vilsack.”There is no need for Congress to try to rewrite this renewable fuels standard. They got it right the first time.”

Ethanol supporters have said there is enough flexibility within the mandate to allow the Environmental Protection Agency to alter annual blend requirements, a point Vilsack reiterated on Tuesday.

The EPA has recently indicated a willingness to cut the country’s renewable fuels quota in 2014. In setting the final volume requirements for 2013 last month, the agency acknowledged the levels currently in place are unrealistic and may need to be reduced.

Vilsack said the EPA’s willingness to adjust the 2014 threshold has taken “some of the momentum” out of Congress to change the Renewable Fuel Standard. Still, he remained concerned about inserting the ethanol mandate in a debate such as the debt ceiling, a move that could force the hand of lawmakers who support the Renewable Fuel Standard.

Ethanol producers have said 2013 will be a key year for the fuel. By this time next year, large-scale cellulosic plants will have come on line, consumer use of fuel with 15 percent ethanol will have increased and stockpiles of corn will have rebounded after last year’s drought. Moreover, there is an expectation that a push to change the Renewable Fuel Standard will not be successful.

“We’re 100 percent focused on the RFS. That’s where it’s all at,” said Matt Merritt, a spokesman with Sioux Falls-based ethanol giant Poet who called 2013 a “pivotal year” for the industry. Merritt said he was optimistic that efforts to change the mandate will be rebuffed and Congress will keep the mandate “intact the way it is.”

Critics of the Renewable Fuel Standard, lead by the American Petroleum Institute, have made lobbying against the mandate their top priority in 2013. The oil industry in August asked the EPA to reduce the amount of ethanol and other renewable fuels to below 10 percent of gasoline demand in 2014. It warned a failure to lower the mandate would result in “severe economic harm” to consumers and the U.S. economy.

The Renewable Fuel Standard calls for 18.15 billion gallons of renewable fuels to be blended into the nation’s gasoline supply in 2014 – a figure the two groups are asking the EPA to lower to 14.8 billion gallons. This year 16.55 billion gallons must be blended into the U.S. fuel supply.

Nearly 150 of Growth Energy’s members are in Washington for three days this week to meet with lawmakers, including those critical of fuel, and members of the Obama administration in hopes of warding off any changes to the mandate. “We’re meeting with anyone and everyone that will listen,” said Michael Frohlich, director of communications with Growth Energy