Obama Administration Uses Last Chance to Get the RFS Back on Track

Contact: Monte Shaw

EPA Volumes on Track for Ethanol, Fall Short for Biodiesel

JOHNSTON, IOWA – With one last chance to get the Renewable Fuel Standard (RFS) back on track, today the Environmental Protection Agency (EPA) announced they would boost the final renewable fuel targets for 2017 to the levels called for by Congress in the law. As a result, competition will be intensified as consumers gain greater access to low-cost renewable fuel choices at the pump.

“Today marked the last chance for the Obama Administration to get the RFS back on track,” stated Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw. “In a dramatic return to their roots, they chose to uphold the law and, in doing so, boosted fuel competition, consumer choice and rural America. The RFS ethanol volumes announced by the EPA today mean higher income for farmers and lower prices for consumers. They mean more jobs in rural Iowa and less dependence on foreign oil. This is the type of RFS support that the Obama Administration pledged eight years ago. There was a bit of a detour, but this final action restores the RFS as a powerful tool to crack the petroleum monopoly.”

After initially proposing to lower the corn-ethanol RFS level, the EPA clearly took into account excess corn stockpiles growing to levels not seen in decades, record US ethanol production, and record levels of ethanol exports. Instead of forcing ethanol overseas, more of these gallons will now be used to lower US gasoline prices.

Further, data from the US Energy Information Administration clearly shows that the US routinely breaks the fictitious E10 blendwall inaccurately touted by some in the oil industry to protect their near monopoly. Finally, EPA’s own RFS tracking system shows that so far in 2016, renewable fuels use in the US actually exceeded the originally proposed levels for 2017.

“That data clearly supported sticking with the RFS levels in the law,” stated Shaw. “We’re grateful the EPA followed the data and the law. As a result, consumers will see lower prices at the pump and Iowa farmers will likely see commodity prices finding firmer support.”

Discussing the biodiesel targets, specifically, Shaw noted, “Unlike ethanol, the EPA failed to learn its lesson on biodiesel. We warned them last year that their proposed levels woefully underestimated biodiesel imports and could actually lead to a reduction in US biodiesel production. While the slight bump in last year’s final rule appears to have kept US biodiesel production steady in 2016, the goal of the RFS is not to maintain the status quo. The RFS level finalized today for biodiesel use in 2018 fails to keep up with, let alone push, what’s already occurring in the market.”

In the rule today, EPA increased the total advanced biofuel level from the original proposal. Shaw added: “One bright note for biodiesel is EPA’s decision to increase the total advanced biofuel level. This may allow biodiesel growth beyond the specific biodiesel target finalized today.”

Shaw concluded: “All the available data pointed toward an opportunity for the Obama Administration to leave the RFS on the same strong footing they supported eight years ago. Today, they did just that. This final rule is a strong step forward for consumers, farmers, the environment and energy security.”

The original corn-based ethanol target under the RFS called for 15.0 billion gallons in 2017, while the EPA previously proposed 14.8 billion gallons. Today, the EPA finalized this target at 15.0 billion gallons.

However, ignoring underutilized US biodiesel production capacity and surging biodiesel imports, the EPA today finalized the biodiesel target at 2.1 billion gallons, as originally proposed, for 2018.

Iowa is the nation’s leader in renewable fuels production. Iowa has 43 ethanol refineries capable of producing 4 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 more than 325 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.