New Year, Renewed Challenges

As we begin the new year, we have much to be thankful for and to reflect upon. There is no doubt that 2013 was a challenging year. There was discussion of congressional action on the renewable fuel standard (RFS) and our industry came under heavy attack from a number of special interest groups such as Big Oil and Big Food. 

But through your efforts, we succeeded in stopping any congressional action. Throughout the summer and fall, many of you stepped up to the plate and contacted your members of Congress and made it clear that legislative changes to the RFS would not be tolerated and would have severe ramifications for our industry and rural America. 

So, while we have been successful in some endeavors, now is the time to stay resilient and continue to fight for our industry and for the future of renewable fuels.

We must move forward, not backward when it comes to developing alternatives to fossil fuels and foreign oil. We all know that the RFS and biofuels have created jobs that cannot be outsourced, which have helped ensure a robust rural America. Additionally, renewable fuels are better for the air we breathe and for our environment, and they are making a difference by decreasing our dangerous dependence on foreign oil. Biofuels are better for our national security, energy security and they benefit the consumer by providing them a choice and savings at the pump. It is because of these critical reasons we must continue to advocate for our industry and its sustained growth.

As you know, on Nov.15 the U.S. EPA released the proposed renewable volume obligations (RVOs) under the RFS for 2014. These volumes represent the amount of renewable fuel that must be blended into the nation’s transportation fuel supply. 

The agency has proposed to significantly reduce the volumes Congress set by statute. EPA proposes to reduce the total renewable fuel volume from 18.15 billion gallons to 15.21 billion gallons. Within the total 15.21 billion gallons of renewable fuel, EPA has proposed to reduce the volume of advanced biofuels from 3.75 billion gallons to 2.2 billion. Within the advanced pool, EPA has proposed 17 million gallons of cellulosic ethanol and 1.28 billion gallons of biobased diesel.  

The bottom line is that this rule cannot stand. It is important to remember that this is a proposed rule and there is still time to weigh in and let the EPA know that this is unacceptable. That is why I am calling on every stakeholder in the biofuels industry to submit comments to the EPA and make their voices heard. 

Together, these proposals have the effect of reducing the total amount of grain-based ethanol that can be used to meet the standards from 14.4 billion gallons to 13.01 billion gallons. This is also a reduction from last year’s total of 13.8 billion gallons for grain-based ethanol. 

A drastic cut such as the initial EPA proposal will have a devastating impact on agriculture and our rural economies, as well as jobs at ethanol plants around the country. By taking a step backward, the EPA is sending a signal that the government no longer supports the production of biofuels. This uncertainty, coupled with a dramatic cut in production, puts not only jobs at risk, but also the security of our nation and the future of the biofuels industry.

Furthermore, if the EPA turns its back on the production of conventional biofuel, it will have a devastating effect on the development and commercialization of next-generation biofuels, like cellulosic biofuels from feedstocks such as agricultural waste.

When the RFS was established, it always envisioned ethanol blends above 10 percent—even with decreasing gasoline consumption. But oil companies are doing everything they can to maintain their stranglehold on our nation’s fuel supply.

This proposal, as it stands, would have a devastating ripple effect on ethanol plants, their production and the jobs they support, as well as the surrounding communities.

That is why in the new year, we must remain resilient and continue to battle for our industry. We must submit comments to the EPA and do everything in our power to help shape a better rule that reflects the original vision of the RFS and keeps our industry moving forward, not backward.

Author: Tom Buis
CEO, Growth Energy
202-545-4000
[email protected]