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EPA Ignores Real World Data from Iowa, Other Fuel Choice Leaders

JOHNSTON, IOWA – Today the Environmental Protection Agency (EPA) announced the final renewable fuel targets for 2015 and 2016 under the federal Renewable Fuel Standard (RFS), setting the final RFS levels well-below the levels called for by Congress in the law.  As a result, consumers will face fewer choices and higher fuel prices, while farmers and rural America will continue to confront difficult economic times.

“Today’s announcement by the EPA was a gut punch for consumers and farmers,” stated Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw.  “Given EPA’s stated rationale for these numbers, one of the most successful energy policies in our nation’s history has been put squarely in the stranglehold of the petroleum industry.  As a result, consumers will see higher prices at the pump and Iowa farmers will likely continue to see commodity prices below the cost of production.”

Noting that ethanol is the world’s cheapest source of fuel octane, Shaw continued, “One of the main purposes of the RFS is to encourage competition at the pump.  Today’s announcement by the EPA takes the power of fuel choice out of consumers’ hands and allows the oil industry to continue to restrict fuel choices to those most profitable to them, and not the most affordable for consumers.”

Shaw also cried foul on EPA’s use of the mythical “blend wall” to justify its lowering of the RFS levels.  Shaw noted, “The so-called ‘blend wall’ is a fabrication of the oil industry to explain its anticompetitive behavior.  There is simply not a blend wall issue; there is a consumer access issue. At virtually every station offering consumers the choice of fuel blends containing more than 10 percent ethanol, ethanol accounts for well more than 10 percent of total fuel sales.  Iowa retailers with blender pumps, offering blends from zero to 85 percent ethanol, consistently average 20 to 25 percent ethanol content across their total fuel sales.”

Noting the impacts to the state of Iowa, Shaw added, “The slashing of this important rule comes at a time when net farm income is at its lowest in nine years, and corn and soybean prices are at—or below—the breakeven point. The adverse impacts of this rule on rural economies across Iowa and the Midwest cannot be overstated. We’re in the closing stages of a bin-busting harvest.  I fear that more agribusiness job losses are on Iowa’s horizon.”

Discussing the biodiesel targets, specifically, Shaw noted, “While the targets for biodiesel are slightly less bad than for ethanol, the nominal growth for biodiesel set forth by EPA will likely be more than offset by surging imports of foreign biodiesel that EPA fast-tracked earlier this year.  As a result, we could likely see a reduction of U.S. biodiesel production and use under these RFS levels.”

Shaw concluded:  “With the Obama Administration so intently focused on curbing greenhouse gas emissions, cleaner-burning renewable fuels should be allowed to grow, and not be held back.  This final rule is a severe step backwards for consumers, farmers, the environment and energy security.”

The original corn-based ethanol targets under the RFS call for 15.0 billion gallons in 2015 and 2016. Today, the EPA finalized these targets at 14.05 billion gallons for 2015 and 14.5 billion gallons for 2016.

Additionally, despite the demonstrated ability to produce 1.8 billion gallons of biodiesel in 2013, surging biodiesel imports, and the National Biodiesel Board’s (NBB) request of 2.4 billion gallons in 2016 and 2.7 billion gallons in 2017, today, the EPA finalized the biodiesel targets at just 1.9 billion gallons for 2016, and 2.0 billion gallons for 2017.

Iowa is the nation’s leader in renewable fuels production. Iowa has 43 ethanol refineries capable of producing 3.9 billion gallons annually, including nearly 55 million gallons of annual cellulosic ethanol production capacity. In addition, Iowa has 12 biodiesel facilities with the capacity to produce nearly 315 million gallons annually.

The Iowa Renewable Fuels Association was formed in 2002 to represent the state’s liquid renewable fuels industry. The trade group fosters the development and growth of the renewable fuels industry in Iowa through education, promotion, legislation and infrastructure development.

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For more information, visit the Iowa Renewable Fuels Association website at: www.IowaRFA.org