By STEVE BINDER
WASHINGTON, D.C. — True to his word from late last fall, U.S. Rep. Bob Goodlatte has sponsored new legislation that takes aim at eliminating most of the teeth in the federal law that requires ethanol to be blended into the nation’s fuel supply.
Goodlatte, a Virginia Republican, along with U.S. Reps. Jim Costa (D-Calif.) and Steve Womack (R-Ark.), filed the Renewable Fuel Standard (RFS) Reform Act last week. It would eliminate the biofuel mandate of the RFS, cap the amount of ethanol that can be blended into the fuel supply at 10 percent and require the U.S. Environmental Protection Agency (EPA) to set cellulosic biofuel levels at production amounts.
“The federal government’s creation of an artificial market for the ethanol industry has quite frankly triggered a domino effect that is hurting American consumers, energy producers, livestock producers, food manufacturers and retailers,” Goodlatte said during a press conference announcing the companion bills, House Resolutions 1461 and 1462.
The RFS continues to divide the agriculture industry, with major livestock groups opposing it and grain groups supporting it. After last year’s drought, livestock groups petitioned the EPA for a one-year waiver of the RFS, blaming the mandated program for higher corn prices and therefore high feed costs. A total of 156 House members supported the waiver.
But the EPA ruled against the groups, stating that based on its own extensive analysis, a one-year waiver would have little effect on corn prices, about a 1 percent change, wrote EPA Administrator Gina McCarthy.
She acknowledged livestock groups were hard hit last year, but said even a temporary easing of the ethanol mandate would not have made much of a difference.
Randy Spronk, president of the National Pork Producers Council, disagreed and strongly supports Goodlatte’s latest measures.
“It is clear, when the EPA is unable to provide even a temporary waiver of the RFS during the worst drought in 70 years to assure adequate feed and food supplies, that something is broken and needs to be fixed,” he said.
Mike Brown, president of the National Chicken Council, said that since 2005 – when the RFS first took effect – chicken producers have had to cover feed costs in excess of $35 billion.
“We have witnessed a dozen poultry companies file for bankruptcy, be sold or simply close their doors, due in large part to the extreme volatility and record high cost of corn associated with ethanol’s insatiable demand,” Brown said.
The National Corn Growers Assoc. (NCGA) touted the economic benefits of the RFS. It has “helped rebuild rural America, allowing our children to come back to the farm and supporting many businesses in our communities,” said NCGA President Pam Johnson.
“Additionally, the ethanol industry contributed more than $42 billion to the nation’s gross domestic product in 2011, generated nearly $30 billion in household income and saved consumers a minimum of 25 cents per gallon at the pump.”
The RFS first took effect in 2005, was modified in 2007 and was intended to lessen America’s dependence on foreign oil. It required 13.2 billion gallons of corn-based ethanol be blended into the gasoline supply for 2012 and that, by 2020, the EPA require that about 36 billion gallons of renewable fuel be incorporated into the fuel supply.
Meanwhile, the Illinois Corn Growers Assoc. last week, before the House Energy Committee, touted a new report by the U.S. Department of Energy (DOE) that indicated fuel prices likely will drop if the nation continues blending fuel according to RFS mandates.
According to that DOE report, with 36 billion gallons of renewable fuel in play, about $121 billion would be added to the nation’s gross domestic product by 2022, with gas prices dropping by an estimated 7 percent.