Members Stress Importance of RVP Relief, RFS to Congress

ACE fly-in attendees put a human face on the ethanol in the halls of Congress, educating congressional staff and policymakers about the issues important to the ethanol industry. This Grassroots Voice column appears in the May print edition.
By Brian Jennings | April 24, 2017

The American Coalition for Ethanol and over 70 of our grassroots members recently lobbied Congress and Trump administration officials during our ninth annual fly-in. The two-day event brought together retailers, ethanol producers, investors, corn growers, and service and product providers to participate in over 120 meetings on Capitol Hill.

This year’s fly-in was focused on encouraging cosponsorship of bipartisan legislation (S. 517, H.R. 1311) to extend Reid vapor pressure (RVP) relief to E15 to allow its use year-round. We also stressed the Renewable Fuel Standard works: it’s an America-first energy policy that supports a strong rural economy. People who have been on multiple ACE fly-ins reported there is more awareness about ethanol and the RFS on Capitol Hill than ever before.

We were especially grateful so many corn farmers joined the event this year, underscoring how biofuel production has become a critical market for U.S. farmers and supports high-skill, high-wage jobs in rural communities. Farmers are motivated because of the economic insecurity that has spread across rural America since the U.S. EPA took implementation of the RFS off-track, reducing annual volume obligations below levels established by Congress. During this period, EPA sided with oil companies that claimed infrastructure constraints and the mythical E10 “blend wall” prevented higher ethanol blends, such as E15 and E30, from being used in the marketplace. As a result, leading biofuel groups were forced to sue the Obama administration, filing a petition for review last year. This litigation is ongoing with a court decision expected later this year.

At the same time, EPA’s mismanagement of the RFS triggered an economic slump, farmers produced record-high corn crops in 2015 and 2016.  According to USDA, surplus stocks of corn will swell to a 30-year high of 2.4 billion bushels and corn prices will fall to a 10-year low in 2017. Liquidity ratios and working capital have deteriorated to their weakest levels since 2002 and the value of farm sector assets is expected to decline by $32 billion in 2017. Iowa farmland values dropped 6 percent in 2016, making it the third straight year land values fell. Net farm income has dropped from $124 billion in 2013 to an expected $62 billion in 2017, a decrease of nearly 50 percent, and taxpayer-funded payments to farmers for low crop prices have been on the rise. History has shown that increasing the demand for biofuels leads to higher market prices for crops and reduced government spending on farm program payments.

To help make a convincing case for RVP regulatory relief, we asked retailers who sell E15 to join us for the fly-in. Representatives from Sheetz, Propel Fuels, Jetz, Cresco Fast Stop, Midway Service, and Good and Quick provided lawmakers with real-life examples of how they have overcome the so-called E10 blend wall and would sell even more E15 if it were allowed year-round in conventional gasoline areas.

We were very encouraged by the growing support for RVP legislation, even with members of Congress from outside the Corn Belt. When you explain retailers aren’t allowed to sell E15 in the summer months, even though it has lower evaporative emissions than gasoline and E10, they see this as a problem that needs to be fixed, whether Congress takes that step or EPA decides it can do it on its own.

Our members conveyed that growing the renewable fuels market is even more critical given the uncertainty created by efforts to renegotiate existing trade pacts. While we are hopeful these new negotiations will lead to better trade opportunities, the anxiety in the near term will impact the U.S. farm economy, which makes a strong biofuels market even more important.

Most importantly, our fly-in attendees once again put a human face on the ethanol industry. In meetings with friends and foes, ACE members helped policymakers appreciate that to restore economic security in rural America, Congress needs to maintain the RFS, EPA needs to implement the program as enacted by Congress, and steps must be taken so that E15 and higher blends of ethanol have access to the market.

Author: Brian Jennings
Executive Vice President
American Coalition for Ethanol