TOP LOBBYISTS QUESTION MOTIVE OF EPA'S RFS PROPOSAL
Dec. 6, 2013
As the U.S. Environmental Protection Agency (EPA) heard testimony regarding the proposed Renewable Fuels Standard (RFS) reductions for 2014, top lobbyists for the nation's two largest general farm organizations questioned the root of the agency's action during the 2013 Farm Journal Forum in Washington.
The EPA issued a proposed rule last month to lower the RFS requirement for 2014 below the congressional mandate to 15.21 billion gallons of ethanol and biodiesel for blending into gasoline. Congress initially called for an 18.15 gallon mandate.
Both National Farmers Union (NFU) Vice President of Government Relations Chandler Goule and American Farm Bureau Federation (AFBF) Senior Director of Congressional Relations Mary Kay Thatcher expressed confusion over the administration's abrupt turn to reduce the ethanol and biofuel production mandate.
"I don't think anybody has any idea why EPA did what they did," Thatcher told the group.
NFU's Goule added that the administration's move to lower renewable fuels will not help it gain Democratic seats in the House or Senate in 2014. He said NFU President Roger Johnson emerged from a recent meeting with administration officials without any answers from the EPA.
"They have completely ripped and yanked the rug from underneath agriculture," Goule said. He added that EPA's proposal "undoes" the past years of work from USDA Secretary Tom Vilsack and designated EPA liaisons to "get farmers to trust the EPA."
In its proposal, EPA cites information that U.S. demand for gasoline has dropped to the point that there is insufficient supply to meet the mandatory ethanol blending requirement, creating a "blend wall" that will force prices higher.
However, Goule maintained "the blend wall is a fictitious wall that oil companies have put out there."
The EPA's proposal also sets the 2014 and 2015 biomass-based diesel Renewable Volume Obligation (RVO) at 1.28 billion gallons. American Soybean Association (ASA) Director Mike Cunningham testified at the hearing, where he said the bio-diesel number is significantly less than the industry is capable of producing next year, as well as the 1.7 billion gallon RVO that industry requested.
"The Biomass-based Diesel and total Advanced Biofuels levels set forth in the proposal are unnecessarily low and will stifle the growth and job creation potential demonstrated by the biodiesel industry over the past several years," Cunningham said.
Testimony presented at the hearing Thursday also included corn grower groups from almost every state opposed to the reduction to RFS requirements.
Although some rural and agricultural interests accuse EPA of caving to oil companies' pressures against RFS requirements, the livestock sector and food retailers say increased ethanol production since 2007 has driven up corn prices and resulted in higher food prices.
National Council of Chain Restaurants (NCCR) Vice President Scott Vinson told EPA it hired PricewaterhouseCoopers (PwC) to examine whether the RFS is responsible for at least a portion of the higher food commodity costs experienced by the chain restaurant industry.
"PwC concluded that the conventional portion of the RFS mandate, when fully implemented in 2015, will raise chain restaurant food costs by up to $3.2 billion dollars a year, every year," he said in his testimony.
National Chicken Council (NCC) President Mike Brown testified today that he is grateful for the EPA action, but asserted that Congress must pass legislation to reform or repeal the RFS.
"The insecurity and volatility for those of us who depend on corn and Mother Nature has caused much devastation for U.S. chicken producers," Brown said. "Since 2007, more than a dozen poultry companies have filed for bankruptcy, been sold or simply closed their doors altogether, due in large part to high feed costs brought on by the RFS."
EPA's hearing included 144 witnesses from both sides of the debate in a hearing that lasted late into the evening Thursday.