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Renewable Fuel Policy Lagging

The Garden City Telegram

July 6, 2015

By Ken McCauley

The Renewable Fuel Standard (RFS) is critical for small, rural farms in America’s heartland. The renewable fuel industry stimulates job growth, spurs investment and drives down costs at the pump. Why, then, do so many oppose this critical component to domestic renewable fuel growth?

According to the Environmental Protection Agency (EPA), Congress established the RFS to promote energy security by increasing the percentage of domestic renewable fuels (like ethanol) used in transportation fuel. The RFS led to the emergence of a burgeoning biofuels industry, harnessing the energy from natural, domestic products like corn to produce ethanol. The program works by imposing a yearly requirement on refiners and importers of fuel to include an increasing percentage of renewable fuel, called Renewable Volume Obligations (RVOs).

Each year since enactment, the RVOs were to be slightly increased, as the industry adjusted and infrastructure and technology were developed to keep up. However, in recent years, the EPA has dropped the ball. The agency neglected to issue RVOs for the past three years, causing confusion and uncertainty in the marketplace.

In late May, the EPA finally released its proposed RVO numbers for 2014, 2015 and 2016. The levels were much lower than Congress intended when it passed the standard in 2005. The comment period on the proposed levels extends until July 27. We must urge the EPA to reconsider and push for higher levels.

The initial enactment of the RFS spurred companies to invest billions into the industry, causing renewable fuel production to triple, driving oil import levels down to their lowest in decades and significantly decreasing our carbon emissions into the atmosphere. However, EPA’s failure to issue RVOs in a timely manner has had a chilling effect on the industry, causing investment to shrink by almost $14 billion in the past two years and putting American jobs at risk.

American farmers stepped up when called upon, increasing production levels of corn ethanol to meet the growing standards. We restructured our production plants and ways of life to help wean the United States off foreign oil from unfriendly nations, resulting in billions being injected into a new industry. But now, the EPA is submitting to the demands of Big Oil — with newly proposed RVOs disappointing, at best — after not issuing standards for the past three years. Instead of letting the oil industry rewrite the rules of renewable fuel, the EPA should uphold its end of the deal.

A recent economic impact report commissioned by Fuels America tracked the data, showing that the RFS has stimulated $4.1 billion dollars in economic activity annually in Kansas.

The renewable fuel industry supports 16,620 jobs and generates $1 billion in wages annually in Kansas. It has created job growth for the tens of thousands of people who work on the 400,000 farms across America that grow corn. Of last year’s total corn production, a staggering 35 percent of the 14 billion bushels of domestic corn production went to produce corn ethanol.

Cuts in the RVO will have serious consequences across the board, specifically in the American heartland, and would adversely impact our agricultural economy. It could have ripple effects on the rest of our economy, as well, with higher prices at the pump. Environmentally, it could lead to a reversal of the past decade of decreases in carbon dioxide emissions into the atmosphere.

The RFS represents a highly successful energy policy that has created American jobs, decreased our reliance on foreign fuel and contributed to a cleaner environment. We must encourage the EPA to reconsider and reinstate strong renewable fuel volumes, for the good of our economy, our national security and our environment.

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