Senators Dianne Feinstein (D-CA) and Tom Coburn (R-OK) have introduced legislation to curb corn-ethanol use and production. The Corn Ethanol Mandate Elimination Act of 2013 eliminates the corn ethanol mandate within the Renewable Fuel Standard (RFS), an energy policy that mandates the use of 36 billion gallons of biofuel in America’s fuel supply by 2022.
“I am pleased to join Senator Coburn and others on a bill to eliminate the federal corn ethanol mandate from the Renewable Fuel Standard, while maintaining provisions designed to grow the low-carbon biofuel industry,” said Senator Feinstein. Under the corn ethanol mandate in the RFS, roughly 44 percent of U.S. corn is diverted from food to fuel, pushing up the cost of food and animal feed and damaging the environment. Oil companies are also unable to blend more corn ethanol into gasoline without causing problems for automobiles, boats and other vehicles. I strongly support requiring a shift to low-carbon advanced biofuel, including biodiesel, cellulosic ethanol and other revolutionary fuels. But a corn ethanol mandate is simply bad policy.”
The ethanol industry was outraged at the proposed legislation and is fighting back. “This legislation is incredibly shortsighted as it will eviscerate the RFS – the most successful energy policy enacted in the last 40 years,” responded Tom Buis CEO of Growth Energy to the proposed bill. “It will continue to keep us addicted to foreign oil and more than anything, it seems like this legislation is appeasing the wishes of Big Oil and Big Food.”
Buis continued, “Additionally, this legislation is based on false, misleading information. To blame ethanol for an increase in the price of food may make for good rhetoric, but it is completely devoid of any facts to back it up. Corn ethanol is not the cause of high prices; it is the price of oil. Even the World Bank outlined how crude oil prices are responsible for 50 percent of the increase in food prices since 2004. Countess studies have shown that record-high oil prices, Wall Street speculators and the high costs of manufacturing, packaging and transportation are the true culprits driving up food prices.
“Furthermore, the authors of this legislation fail to understand the actual process of how ethanol is produced. Only the starch is removed, while all of the valuable components – the fiber, oil and protein is returned to the food chain in the form of a high protein animal feed,” added Buis.
Bob Dinneen, President and CEO of the Renewable Fuels Association (RFA), responded by saying, “This is monumentally stupid. This legislation ought to be entitled ‘The Oil Monopoly Protection Act of 2013.’ This bill would deprive Americans of cost-saving, renewable fuel choice. It would set this country back in its quest to gain energy independence and further damage the environment by increasing the need for fracking, tar sands, and off-shore drilling.”
Dinneen continued, “What makes this bill so nonsensical is its timing. Farmers across this country have just finished harvesting the single largest corn crop in history. Corn surpluses are headed higher and corn prices headed lower. In some areas corn prices have already fallen below the cost of production, and below where corn prices were on the day President Bush signed the Energy Independence and Security Act in 2007 into law ($4.34/bushel). This legislation would take away demand for corn at a time when farmers need it most. It would increase farm program costs and destabilize this country’s agricultural industry.”
Senator Feinstein says she supports next generation biofuels, but this bill undermines that commitment said Dinneen. “By removing first generation ethanol from the RFS, the foundation will be pulled out from underneath cellulosic ethanol and other advanced biofuels. Investors will turn their attention to incumbent fuels because the infrastructure needed to deliver future fuels and the market for them will evaporate if this bill would ever become law. Market uncertainty and lack of infrastructure is the enemy of innovation and job creation.”
Fuels America also pointed out that, “First-generation producers are investing in the next generation of clean fuels. Damaging those companies would result in a huge reduction in investments aimed at cellulosic commercialization. It would also signal to investors that the RFS did not create the stable marketplace that it was intended to, and that Congress could change any part of the law based on the political mood of the day. Together, these consequences would fatally damage the future of advanced fuels in America.”
The ethanol industry “cautions members of Congress” that this bill is a concession to Big Oil and Big Food and that consumers deserve a choice at the pump.