The Obama administration’s recent proposal to significantly reduce the amount of clean-burning renewable fuels that must be included in the fuel supply in 2014 is a shocking capitulation to Big Oil that threatens to significantly damage our state’s economy, puts consumers at risk through higher prices at the pump and would hurt the environment.
The renewable fuels standard was passed with strong bipartisan support to promote the development of a domestic renewable fuels industry. It requires an increasing amount of renewable fuels to be included in nation’s fuel supply, and it has worked extremely well.
Consumers have seen significant savings at the pump as renewable fuels have helped hold down the price of both gasoline and diesel. A study by Iowa State University and the University of Wisconsin found that in 2010, domestic ethanol production helped keep gasoline prices $0.89 lower per gallon than they otherwise would have been.
In addition, Iowa farmers, businesses and communities have invested heavily to support the development of the renewable fuels industry to help meet the standard and have seen tremendous benefits from having these facilities in their communities.
Iowa is fortunate to lead the nation in the production of ethanol and biodiesel with 42 ethanol refineries capable of producing over 3.8 billion gallons annually and 12 biodiesel refineries with a combined annual capacity of over 315 million gallons. We also have three cellulosic ethanol facilities under construction, all of which are associated with an existing corn ethanol plant.
Unfortunately, EPA’s proposal would move us backward on both the ethanol and biodiesel requirements for 2014. Specifically, the proposal lowers the “corn ethanol” level from 13.8 billion gallons in 2013 to only 13 billion gallons in 2014 and freezes the biodiesel level at 1.28 billion gallons despite the fact the biodiesel industry is currently operating at an annualized rate of 2 billion gallons.