The RFS battle continues

By Matt Reese

In a battle of contentious letters, the opposing sides of the Renewable Fuel Standard debate have been engaged in a war of words.

The National Chicken Council joined a diverse group of business, hunger and development, agricultural, environmental, budget, grassroots and free market organizations in urging Congress to reject any efforts to include continued or expanded federal support for corn ethanol in any legislation with a letter sent March 22 to Senate leadership.

The groups expressed their opposition to:

▪   Any renewal of the Volumetric Ethanol Excise Tax Credit or any other similar tax credit;

▪   Altering the requirements of the Renewable Fuels Standard in a way that would open the definition of advanced biofuels to include corn-based fuels;

▪   Any expansion of current alternative fuel tax credits that would allow ethanol blends (E10, E15, or E85) or related infrastructure projects to qualify for the credit; and

▪   Funding for ethanol “blender pumps” or any other ethanol infrastructure projects.

“Any one or combination of these policies would only serve to subsidize the market for fuels derived from corn, especially corn ethanol, and exacerbate the many environmental, social and economic challenges associated with those fuels,” the groups wrote.  “Again, we urge you to reject efforts to include continued or expanded federal support for corn ethanol in any legislation.”

This was soon followed with a terse rebuttal from biofuel supporters that pointed out the RFS role in moderating gasoline prices, reducing foreign imports, and supporting the advanced and cellulosic biofuels sector. The American Coalition for Ethanol (ACE), Advanced Ethanol Council (AEC), Biotechnology Industry Organization (BIO), Growth Energy, Renewable Fuels Association (RFA), National Corn Growers Association (NCGA), 25x’25 Alliance and Energy Future Coalition sent a letter urging Congress to support the RFS and reject attempts to reduce, waive, or eliminate it.

“Today, ethanol is approximately $1 cheaper than gasoline and blending ethanol into U.S. gasoline saves consumers at the pump,” the groups said.

A Center for Agriculture and Rural Development analysis found that from 2000-2010, ethanol reduced gasoline prices at the pump an average of $0.25 per gallon, which meant consumers annually saved $34 billion dollars.

“Thanks in part to the RFS, U.S. oil imports fell below 50% in 2010 for the first time since 1997, and, oil imports stand as just 45% today. Ethanol accounts for 81% of all new domestic fuel production since 2005,” the groups stated. “Because of the RFS, the advanced and cellulosic biofuels industry is now in the process of building new plants, innovating existing production facilities with emerging technologies, and introducing new product streams that will allow the renewable fuels sector to become more profitable, diversified and efficient.”

Ethanol and biofuels supporters also pointed out the economic benefits in terms of building upon investment in the industry.

“Several billion dollars have been invested in advanced biofuels development with the expectation that Congress will stay the course with regard to its commitment to the industry and to the stability of the RFS. Efforts to amend or reform the RFS would send a chilling signal to a marketplace at just the time when the advanced and cellulosic biofuels industries are on the cusp of commercial production to help meet this nation’s energy independence and security needs.”

The groups concluded, “Anything short of full support for the RFS will exacerbate the problem of increasing gas prices and undercut the ethanol industry’s efforts to innovate and continue to deliver domestically-produced and affordable alternatives to foreign oil.”

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