Comments on Renewable Fuels Standard Now Closed

Comments on Renewable Fuels Standard Now Closed

Potential RFS waiver comments fueled by drought uncertainty

After months of debate, comments to the Environmental Protection Agency regarding a potential waiver of the Renewable Fuels Standard closed Thursday.

Outspoken supporters of the RFS, including the National Corn Growers, released comments to the EPA Oct. 11.

NCGA called the RFS "a success" and said that since it was introduced in 2005, it has increased national security, reduced greenhouse gases, and has had an "overall positive impact" on the U.S. economy.

Will these bins be full? NCGA says an RFS decision is "premature" before the Nov. 9 USDA supply and demand reports.

"In 2008, EPA has established that a waiver should only be imposed if severe economic harm arising from the RFS can be demonstrated. However, economic harm must take into account not only food costs, but also potentially higher fuel costs arising from reduced ethanol availability," the letter says.

NCGA said a waiver may not be in the best interests of livestock producers.

"Most notably, reducing the amount of corn processed for ethanol will cause a reduction in dried distillers grains," the letter says. "A reduction in DDG production will only reduce already tight feed supplies."

The American Coalition for Ethanol released its comments Oct. 10. ACE Executive Vice President Brian Jennings said waiving the RFS "won't remedy the harm of the drought."

"Waiving the RFS would simply discourage farmers around the world from planting corn, which runs contrary to what the meat and livestock groups supporting the waiver want," Jennings writes.

"The moderating effect the RFS has on gasoline prices supersedes the small impact it has on corn or feed prices," ACE comments say. "Today, on a wholesale level, ethanol is 70 cents cheaper than gasoline, and has been as much as one dollar per gallon less expensive this year."

Comments from Growth Energy's CEO Tom Buis reflected concerns, too, about corn and food prices, but touched on another topic – job loss.

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"A full waiver of the national Renewable Fuel Standard could lead to closed or idled biorefineries throughout the nation, resulting in as many as 3,000 to 8,300 job losses in ethanol producing areas and $2.9 to $7.8 billion in lost revenues," Buis writes in Growth Energy comments to the EPA. "Consumers would then suffer much higher prices at the gas station, costing U.S. drivers more than $7.5 billion a year or $62.70 per household."

Groups supporting the RFS waiver, including the National Chicken Council, also submitted final comments Oct. 11. Click here to read more.

Tangled Web Of Commentary

Ongoing drought conditions and concerns of short corn supply first fueled the debate flame on July 19, when a coalition of livestock groups organized a press conference to announce a study that supported an effort to enact permanent elimination of the RFS. Reps. Bob Goodlatte, R-Va., and Jim Costa, D-Calif., were behind the measure.

Titled the "Renewable Fuels Standard Flexibility Act" (H.R. 3097), the measure would require a biannual review of corn ending stocks relative to their total use, and base RFS decisions on that ratio.

For the short-term, talk of a waiver began to surface and on July 29, a coalition of dairy and meat producers submitted a petition to EPA supporting a waiver. Proponents of ethanol weren't happy with the measure or a waiver petition, and continued to oppose a potential RFS waiver throughout the summer.

As drought conditions went from bad to worse, more U.S. Representatives and Senators began to back a waiver of the RFS. In total, more than 150 members of the House signed a petition supporting the waiver; 25 U.S. Senators followed on Aug. 7.

Requiring EPA action, Governors began to submit their comments regarding a potential waiver in mid-August. Martin O'Malley and Jack Markell, Governors of Maryland and Delaware, were first to submit a letter to the EPA.

Governors from Arkansas, North Carolina, Texas, New Mexico and Georgia followed with petition requests.

Meanwhile, Iowa Governor Terry Branstad submitted a letter opposing the waiver.

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With enough time to consider aspects of the drought and its impact on corn production, Purdue researchers held a press conference Aug. 16 announcing a study of the RFS, which explained that the arguments weren't all black-and-white.

The economists examining the study said more time was needed to determine the full effect of the 2012 drought on corn yields, but renewable fuel production credits, they said, also throw a wrench in things.

On Aug. 20, the EPA announced a 30-day request for public comment on the waiver, and just 10 days later, the National Corn Growers Association asked for and was granted a 15-day extension.

A group of RFS supporters, including NCGA, RFA and Growth Energy formed the Fuels America coalition on Sept. 27 to advance the RFS. Members targeted key renewable fuels states for a complete campaign aimed at generating support for the industry and the RFS.

On Oct. 4, the University of Missouri Food and Agricultural Policy group released a study examining potential results of an RFS waiver, finding that the RFS waiver would have only a small effect on this year's corn crop, and a larger, but still minimal effect on the 2013-14 crop.

Another study, released Oct. 10 and funded by the RFA, found that a waiver could shrink supplies of biofuels by-products, such as distillers grains and soybean meal, therefore offsetting any decrease in corn prices.

Despite the back-and-forth of industry groups in this re-ignition of the food vs. fuel debate, the EPA is expected to release a final answer in November.

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