With drought conditions devastating much of the U.S. and decimating the corn crop, a coalition of ag groups is now calling for the Renewable Fuels Standard (RFS) to be waived completely or in substantial part for the next year.
The RFS program was created under the Energy Policy Act (EPAct) of 2005, and established the first renewable fuel volume mandate in the United States. The RFS dictates the amount of renewable fuel to be blended into gasoline by a given year.
This is not a one-sided issue with ethanol groups now speaking out and saying the call for a waiver is “misguided.”
The following press releases outline both sides of the RFS controversy:
From the National Cattlemen’s Beef Association:
Coalition Urges Waiver of RFS Because of Drought - Petition Asks EPA for One-Year Waiver of Ethanol Production Mandate
WASHINGTON (July 30, 2012) – As drought conditions become the worst in 50 years and corn yields are expected to drop significantly, a coalition of meat and poultry organizations today asked the U.S. Environmental Protection Agency (EPA) to waive the federal mandate for the production of corn ethanol."
In a petition delivered to EPA Administrator Lisa Jackson, the coalition asked for a waiver “in whole or in substantial part” of the amount of renewable fuel that must be produced under the Renewable Fuels Standard (RFS) for the remainder of this year and for the portion of 2013 that is one year from the time the waiver becomes effective.
The RFS requires 13.2 billion gallons of corn-based ethanol to be produced in 2012 and 13.8 billion gallons in 2013, amounts that will use about 4.7 billion and 4.9 billion bushels, respectively, of the nation’s corn. Some agricultural forecasters now are estimating that just 11.8 billion bushels of corn will be harvested this year – about 13 billion were harvested in 2011 – meaning corn-ethanol production will use about four of every 10 bushels.
The RFS has “directly affected the supply and cost of feed in major agricultural sectors of this country, causing the type of economic harm that justifies issuance of an RFS waiver,” said the coalition in its petition.
It pointed out that EPA was granted the authority in the 2005 Energy Policy Act, which set the initial RFS, and in the 2007 Energy Independence and Security Act, which expanded the fuels standard, to waive because of severe economic or environmental harm the annual volume of renewable fuel that must be produced.
In asking Jackson to take prompt action to provide a measure of relief for livestock and poultry producers, the coalition petition said, “[i]t is abundantly clear that sufficient harm is occurring now and that economic conditions affecting grain supplies and feed prices will worsen in the months ahead. Both conditions provide an independent basis for a waiver of the RFS.”
“America’s pork producers are extremely worried, given the drought affecting much of the corn-growing regions, about having feed for their animals,” said NPPC President-elect Randy Spronk, a producer from Edgerton, Minn. “And their anxiety is compounded knowing that the RFS requires corn ethanol to be produced no matter what. We’re asking EPA to give livestock and poultry producers and, ultimately, consumers a little help.”
“Relief from the RFS is extremely urgent. This very short corn crop will undoubtedly prove to be devastating to the animal agriculture industry, food manufacturers, foodservice providers and consumers,” added Michael Welch, president and CEO of Harrison Poultry in Bethlehem, Ga., and past National Chicken Council chairman. “Thousands of jobs, a continued upward trend of rising food prices and the livelihoods of family farmers are all at risk. The chicken industry is urging EPA to implement the law and promptly grant a full or partial waiver of the RFS. If not now, when?”
“I support American ethanol and what it has done for rural communities in Nebraska and in many other states throughout the country,” said J.D. Alexander, Nebraska cattleman and National Cattlemen’s Beef Association president. “What I do not support are federal mandates picking winners and losers and a federal government sitting patiently by, forking over taxpayer dollars to artificially inflate the price of corn for livestock producers and other end-users. I find it concerning to the viability of the livestock industry that these mandates are allowed to continue today in the worst drought I have seen in my lifetime. This isn’t rocket science. Implement the law, waive the RFS, let the market work and embrace free market principles.”
“As a small, independent turkey grower from Minnesota who buys about 100,000 bushels of corn every year, my family’s livelihood is being threatened by the looming drought disaster,” said John Burkel, of Badger, Minn. “The EPA granting a waiver from the RFS is needed now. This is the only immediate relief for this country’s livestock and poultry producers. We need to stabilize the markets. The reality is, at these volatile, high prices, even the most prudent, cautious farmer can find themselves out of business.”
Members of the coalition that signed the petition include the American Feed Industry Association, American Meat Institute, American Sheep Industries Association, California Dairy Campaign, Dairy Producers of New Mexico, Dairy Producers of Utah, Idaho Dairymen’s Association, Milk Producers Council, National Cattlemen’s Beef Association, National Chicken Council, National Pork Producers Council, National Turkey Federation, Nevada State Dairy Commission, North American Meat Association, Northwest Dairy Association, Oregon Dairy Farmers Association, Southeast Milk Inc., United Dairymen of Arizona and the Washington State Dairy Federation.
A copy of the petition is available by clicking here.
From the American Coalition for Ethanol:
ACE responds to meat groups petition to waive the Renewable Fuels Standard
Sioux Falls, SD (July 30, 2012) – The American Coalition for Ethanol (ACE) strongly opposes efforts from meat and livestock interests to waive the Renewable Fuels Standard (RFS) because of drought conditions in the Midwest.
ACE Executive Vice President Brian Jennings says the petition to the U.S. Environmental Protection Agency (EPA) from a group of meat and poultry organizations to waive the amount of corn based ethanol produced under the RFS for the rest of 2012 and part of 2013 is misguided and on questionable legal ground.
“Everyone in agriculture is aware of the impact this drought will have on farmers across the nation. Unfortunately, these large meat processing corporations feel they should be excused from participation in this natural disaster, and are trying to shift all of the financial impact of a drought to corn farmers and ethanol producers,” said Jennings.
“While we understand the meat industry feels entitled to cheap corn, it is unclear their petition to waive the RFS is even permissible. Under the Clean Air Act, only States and obligated parties (i.e. oil companies) can petition EPA to waive the RFS,” said Jennings. “We welcome an examination of the facts concerning the role the RFS plays in feed, food, and fuel prices and are confident that based upon these facts EPA will deny any valid petition to waive the RFS.”
ACE says without changing anything in the RFS, surplus ethanol and excess RINs enable obligated parties to meet this year’s requirement even with a large reduction in ethanol production. EPA also possesses enormous flexibility with which to adjust the RFS if there is a legitimate reason to do so.
“What seems to be lost in this discussion is the fact that we are still using corn harvested last fall, and none of the remedies that ethanol opponents are proposing will change that,” said Jennings.
The American Coalition for Ethanol has put together a factsheet looking at the RFS and drought conditions which can be read here: http://www.ethanol.org/pdf/contentmgmt/RFS_talking_points.pdf
Find out more information on the Renewable Fuels Standard on the EPA’s website.
© Northern Ag Network 2012