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Goodlatte-Costa Legislation Reduces Ethanol Mandate

posted on October 6, 2011

Goodlatte-Costa Legislation Reduces Ethanol Mandate

The current Renewable Fuels Standard, or RFS requires U.S. motorists to power their cars with 36 billion gallons of alternative fuels by 2022. Ethanol from corn would comprise nearly a third of the total with the rest being covered by biodiesel, cellulosic ethanol and other so-called advanced biofuels including ethanol derived from algae.


But the RFS policy immediately drew criticism from groups as diverse as the Grocery Manufacturers Association and the National Cattlemen’s Beef Association. Concerns ranged from greater demand for corn would lead to higher food and feed prices to the lament that sensitive ground would be torn up to grow food because land had been diverted for fuel production.


This week, two measures were introduced to even remove or reduce the effect of the Renewable Fuels Standard. The first, introduced by Representative Bob Goodlatte - a Republican from Virginia who represents, among other constituents, turkey and poultry producers - calls for the immediate removal of the federal fuels mandate.  While Representative Goodlatte believes the Renewable Fuels Standard should be totally eliminated he also acknowledged there may not be the political will in Congress to make the change.


With that in mind, he joined with Representative Jim Costa, a Democrat from California and a long-time supporter of alternative fuels, to introduce the Renewable Fuel Flexibility Act. The Goodlatte-Costa plan reduces the amount of ethanol required in U.S. fuel when corn supplies are tight. According to the congressmen, the current stocks-to-use ratio would have triggered a 25% reduction in the renewable fuels mandate.


The legislation received support from the National Cattlement’s Beef Association, the American Meat Institute and the Grocery Manufacturer’s Association.


But the National Corn Growers Association, or NCGA, and the Renewable Fuels Association were quick to condemn to the legislation. Officials with the NCGA said the measure would jeopardize progress already made by the ethanol industry and, potentially, cost jobs and reduce economic opportunity throughout rural America.  And RFA officials said Congress should maintain the integrity of the RFS to help drive job creation and wean America from its addiction to foreign oil


 The two measures were introduced a day after the National Research Council issued a comprehensive report on the Renewable Fuels Standard. Commissioned by Congress, the study concluded that without government support, the biofuels industry would be unable to meet its 36 billion gallon fuel mandate by 2022. It also revealed that corn-grain ethanol and, to a lesser extent, soybean biodiesel are closer to being competitive with fossil fuels, particularly when combined with tax credits and encouraged by RFS.


According to the report, corn-based ethanol has contributed to pushing up the price for agricultural commodities, food, and livestock feed. But, the authors said the greater use of distillers dried grains in animal feed had, to some extent, muted the unfavorable effects on the livestock industry.


The whitepaper also concluded cellulosic ethanol - which makes up nearly two-thirds of the total alternative fuels requirement - would not become viable commercially without rapid technological advancements, federal subsidies, strict adherence to RFS fuel mandates, and an increase in taxes on petroleum.


The report was immediately blasted by everyone from Obama Administration representatives to biofuels trade associations. USDA Secretary Tom Vilsack said the report was inaccurate and based on old data. RFA officials pointed out the article ignores increasing global energy demand and the fact ethanol is displacing the need for what it called “marginal fuels” like Canadian tar-sands.



Tags: agriculture Costa Rica ethanol goodlatte National Research Council news RFS