Last week, the Environmental Protection Agency announced its proposed volume requirements for the 2014 Renewable Fuel Standard. As had been rumored for weeks, the proposed rule would lower the required consumption of renewable fuel by more than a billion gallons.
Immediately, the chorus of outrage from industry officials and Iowa politicians was both loud and unified. And now, they’re encouraging Iowans —those who will likely feel the sting of the reduction most — to take the time during the mandatory comment period to tell EPA officials how this will negatively impact them.
“The proposed rules released by the Environmental Protection Agency ... could cost jobs and create dirtier air, while protecting the stranglehold Big Oil has on the country’s fuel supply,” U.S. Sen. Chuck Grassley said. “It’s disappointing that a President who claimed to be a supporter of renewable energy has allowed his administration to take us a step back in lessening our reliance on foreign sources of oil. It’s time for supporters of clean, homegrown, green energy and forward-thinking energy policy to rally and let the Obama administration know that its proposal is short-sighted and irresponsible.”
U.S. Rep. Dave Loebsack, who represents Iowa’s Second Congressional District — which includes Jasper County — was equally harsh in his criticism of the proposed rules. He accused the Obama Administration of “doing a complete 180” on renewable fuels, and that “Big Oil” was being allowed to dictate the nation’s energy policy.
“Today’s announcement is a devastating decision for Iowa’s farmers, rural communities and economy,” he said. “It is a slap in the face to our homegrown industry and Iowa’s economy that once again Big Oil has dictated our energy policy while stomping on rural America and hampering efforts to reduce CO2 emissions. I believe in making things in America and there is no reason our fuels shouldn’t be made here as well.”
The Iowa Renewable Fuels Association asked the Obama Administration to “conduct a thorough soul-searching.” Executive Director Monte Shaw called the new rules “the biggest policy reversal of the entire Obama Administration,” noting the law runs counter to federal law.
The Renewable Fuels Standard, as written and approved by Congress, requires 14.4 billion gallons of “corn ethanol” be produced and made available in the marketplace. The proposed rules call for 13 billion gallons next year; this year, the Required Volume Obligation is 13.8 billion gallons.
“It’s not just the absurdity of lowering the 2014 numbers below the 2013 level, with the new waiver framework, in essence, the Administration would be ceding power to the petroleum industry to dictate the level of each year’s RVO based on the amount of infrastructure the petroleum industry was willing to install,” Shaw said. “That is the exact opposite of how the RFS was intended to work. The RFS is supposed to be a tool for market access, not market restriction.”
He added that, in its proposal, the EPA has adopted a position that a lack of retail distribution equipment this year equates to a renewable fuel supply shortage next year. He noted infrastructure waivers were specifically rejected by Congress when the standard was adopted.
The EPA’s proposal also freezes the biodiesel RVO at 1.28 billion gallons. But, the biodiesel industry — a major contributor to the Jasper County economy through the REG plant located north of Newton — has been operating at an annual rate of 2 billion gallons.
The National Biodiesel Board warned the EPA’s proposal would cause plant closures and layoffs in the U.S. biodiesel industry.
“This proposal, if it becomes final, would create a shrinking market, eliminate thousands of jobs and likely cause biodiesel plants to close across the country,” NBB Vice President of Federal Affairs Anne Steckel said “It also sends a terrible signal to investors and entrepreneurs that jeopardizes the future development of biodiesel and other advanced biofuels in the United States.”
She noted the biofuels industry has met or exceeded the advanced biofuels requirements each year of the RFS, which should be celebrated. The momentum needs to continue forward, not in retreat, she added.
Iowa is the leader in renewable fuels production with 42 ethanol refineries capable of producing more than 3.8 billion gallons annually, and three cellulosic ethanol facilities currently under construction. In addition, Iowa has 12 biodiesel facilities with the capacity to produce nearly 315 million gallons annually.
“Why the Obama administration would side with the big oil companies over Iowa’s homegrown renewable fuels is baffling,” Iowa Gov. Terry Branstad said. “The EPA has turned its back on rural America, and our economy and family farms will suffer as a result. Corn prices have already dropped to the cost of production, and this will likely further squeeze corn producers and negatively impact income growth in rural America.”
Branstad said the fight wasn’t over, yet. He said he would “lock arms” with industry groups, agricultural groups and political leaders from both parties to push for a reversal of the proposed rule. Loebsack said he, too, would continue to fight.
“The numbers for renewable fuel and biodiesel released by the EPA are completely unacceptable,” he said, “and I will fight to ensure that Iowa farmers are able to continue move our nation on a sustainable path forward.”
Shaw said “the circular logic” of the EPA proposal would create a “death spiral” in which the RFS would not be increased unless the petroleum industry offers to higher ethanol blends. He said there would be no pressure to move forward under the proposed rules.
“The 2014 numbers represent the real crossroads,” Shaw concluded. “We either move toward more competition and more consumer choice or we lock in the current petroleum monopoly ... I think we’ve just seen how politically powerful Big Oil really is. They just got what they wanted from the EPA when they had no chance of gutting the RFS through Congress. With no Farm Bill and the RFS in danger of being rendered useless, I hope we don’t look back at Nov. 15, 2013, as the beginning of the next farm crisis.”