Remarks on EPA’s 2014 RFS proposals: Part 1

Several groups and associations around the US gathered to a press call to discuss the EPA’s RFS proposals which are due for release on Thursday 5^th December. Below are some of the reactions.

Environmental Working Group

Scott Faber, vice president of government affairs at the Environmental Working Group said, ‘EPA’s unpredecented decision to reduce the amount of corn ethanol that is blended into gasoline is an explicit recognition that this RFS is badly broken.

‘Even EPA in its own regulatory analysis has concluded that corn ethanol is producing more GHG emissions than the gasoline it was designed to displace, and that our heavy reliance on corn ethanol is a significant source of water and air pollution.

‘That’s way it’s so important that we not only take a first step by reducing the amount of corn ethanol that is blended into our gasoline, but take the much largest and necessary step to end the corn ethanol mandate and reform the RFS.’

ActionAid

Katie Cambell, senior policy analyst for ActionAid said, ‘the US EPA’s proposed reductions to 2014 biofuel blending requirements is a step in the right direction but much more urgent action is required if we are going to reverse the damaging impacts of corn ethanol expansion on global food security.

‘The share of US corn crop diverted to biofuel prouction has gone from 5 – 40% since 2000. This amounts to the diversion of 15% of global corn supply toward meeting the mandates of the RFS. This diversion, as part of a dramatic global expansion of crop based biofuel production, has, without a doubt, led to increased food price volatility. We have seen three dramatic food price spikes in the last five years alone, including a corn price spike after last year’s devastating drought. This increased food price volatility has had a particularly detrimental impact on developing countries, where most people spend between 60 and 80% of their income on food.

‘As long as the crop based ethanol mandates of the RFS remain in place the risk that they will fuel continued global food crises looms large. While this one year proposed reduction is certainly welcome, Congressional action is urgently needed to permanently fix the broken RFS and rollback the harmful mandates for food based biofuels.’

National Chicken Council

Mike Brown, president of National Chicken Council said, ‘while we are thankful and support the action EPA has taken, its timid adjustment reconfirms the program is broken beyond repair.

‘Last year, more than 40% of the nation’s corn crop went to ethanol production, not food or feed. This rising demand for corn has artificially forced prices for the commodity up by nearly 40% since 2005, to the detriment of US food producers and hungry families. The volatility has been equally damaging for poultry and livestock producers.

‘As corn comprises nearly 70% of the feed given to chickens, our single largest input cost, rising prises directly affect farmers’ bottom lines. Since the RFS was aggressively escalated in 2007, average annual feed costs have skyrocketed by US$ 8.8 billion annually for poultry producers.

‘The RFS has also meant pricier trips to the store for consumers. Chicken, beef, pork, egg and fish prices have collectively increased 79% since the policy’s establishment. Last year, the average US family of four faced a US$ 2000 increase in food costs due to higher corn prices brought on largely by the RFS.

‘EPA’s announcement was a good first step, but ultimately, what I will tell the agency tomorrow, is that Congress must act.

‘Congressional action to repeal the RFS remains the most viable pathway to allowing all users of corn to have equal standing in the marketplace.’

National Turkey Federation

The National Turkey Federation on Thursday will encourage government regulators at a national public hearing to proceed with their one year proposed decrease in the 2014 RFS but will warn that Congress still must pass legislation fully reforming the flawed RFS. The forced blending of corn ethanol into gasoline has created an unsatisfactory business model for corn farmers as well as poultry and livestock producers, according to the National Turkey Federation.

‘Ethanol’s leaders just one year ago had dismissed the full costs of the RFS burden on corn prices as being just four cents a bushel, but now claim that the small decrease proposed would drive corn down by more than a dollar,’ said Joel Brandenberger, president, National Turkey Federation. ‘When it served their purpose they tied themselves to a study showing miniscule impact of the RFS on feed prices. Now their reaction against this proposed small cutback to the current RFS has been to claim a potential farm crisis and the gutting of the RFS. The fact is that corn prices were driven down by this year’s huge corn acreage planted to reap ethanol profits. But meanwhile, well into next spring, turkey farmers still must feed from supplies of last year’s high cost corn planted for ethanol.

‘They want to have it both ways. When it suits their purposes, the RFS has no impact on the blending of ethanol into gasoline. Then, suddenly a tiny reduction in the RFS will lead to the destruction of the industry.’ He added that the current decline of corn prices from an abundant harvest will do little good for turkey farmers who must first use up supplies of last year’s ethanol driven higher priced US$ bushel corn.

National Council of Chain Restaurants

Scott Vinson, vice president, National Council of Chain Restaurants said, ‘chair restaurants are by and large owned and operated by tens of thousands of small business franchisees, most of whom have one or two or a small handful of individual restaurant locations. These small business franchisees are often family run enterprises, and they are the very picture of small business in America. They give back to their communities through charitable donations to local good causes, and they serve as popular gathering places for family events, special occasions, and they serve countless meals to everyday Americans every single day.

‘In recent years, food commodity costs for chain restaurants and their small business franchisees have increased dramatically. This increase has happened to coincide with the enactment and implementation of the RFS. These higher food commodity prices are not unique to chain restaurants, but have been experienced by nearly every entity along the food chain, from poultry and livestock farmers on one end of the chain to chain restaurants and other retail food outlets on the other.’

More reactions from associations and groups present at the press call can be found here: 'Remarks on EPA's 2014 RFS proposals: Part two'.

Adapted from a press release by Claira Lloyd.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/05122013/epa_rfs_remarks_part1_888/