The Environmental Protection Agency (EPA) held a public hearing Wednesday in Kansas City on the proposed required volume obligations (RVO) for biofuels for the years 2014, 2015, and 2016. There were more than 260 witnesses testifying both for and against EPA’s proposal.
The National Corn Growers Association organized eight buses to bring in corn farmers from across Missouri, Kansas, and Iowa. The group also sponsored the Rally for Rural America held adjacent to the hearing venue and featuring prominently a large turnout of youth from the Future Farmers of America. Moreover, the grounds were dotted with pro-ethanol banners, parade-like floats and even an ethanol-fueled NASCAR race car revving its engine. The pro-ethanol side also featured a number of corn farmers who were military veterans. All these campaign tactics give a glimpse of what’s to come from the ethanol lobby in their effort to expand the RFS.
The substance of the pro-ethanol message, however, was not so coordinated. One panel included a corn grower who argued that the RFS to date has not increased the price of corn, followed by another who testified that if the RFS volumes aren’t increased, the price of corn will drop. National Corn Growers Association, Chip Bowling of Maryland, stated that the RFS volumes proposed by EPA would reduce corn ethanol by four billion gallons through 2016 compared to the statutory levels. “We simply cannot afford – and will not tolerate – efforts to cut the demand for corn,” Bowling said.
However, the 2016 proposed volume for corn ethanol at 14 billion gallons would still exceed the blend wall based on the Department of Energy’s projection for total motor fuel use, and both the 2015 and 2016 would increase the mandated volume of ethanol beyond the 2014 volume, which has been the highest utilization of ethanol to date. In 2014, ethanol producers made a record 14.3 billion gallons of ethanol, exporting more than 800 million gallons.
According to EPA, all testimony presented at the Kansas City hearing will be submitted to the docket for this rulemaking. The comment period extends to July 27. NCC will be submitting comments to EPA on this rulemaking and also issued the following statement regarding the Kansas City hearing.
NCC Statement
EPA has taken the proper approach by lowering the required volume obligations from the statutory levels to reflect the practical limits imposed by the blend wall. NCC strongly believes this adjustment is necessary to avoid an unreasonable and unsustainable biofuels mandate.
Despite the reductions from the statutory level, however, EPA has still raised the ethanol requirement it initially proposed in its November 2013 Notice of Proposed Rulemaking (NPRM). Despite a record corn crop, ethanol production will use more than 36 percent of total corn production.
Furthermore, EPA has not met its statutory deadlines to establish the volume mandates for biofuels since 2009. The 2014 volumes won’t be finalized until November, 11 months after the 2014 marketing year is completed, and 24 months after the statutory deadline passed.
“This see-saw process by which EPA proposes an up-and-down, now-and-later moving target as the compliance year goes along is highly damaging to poultry and livestock producers,” said Mike Brown, President of the NCC.
NCC supports further reductions in the target levels for 2015 and 2016 to account for the distorting effects the RFS has on the market for corn, substitute feed products, chicken prices, and food prices in general.
