BioFuels Journal

Federal delays in setting the amount of renewable fuels that must be blended into the nation’s fuel supplies are contributing to the economic challenges Iowa and U.S. farmers face, industry leaders said Tuesday.

“We’re already starting to see the trickle-down economics effects of that” delay, said Monte Shaw, executive director of Iowa Renewable Fuels Association.

The U.S. Environmental Protection Agency delayed a decision on blending requirements for 2014 in November.

The Renewable Fuel Standard requires refiners to buy alternative fuels made from corn, soybeans and other products to reduce the country’s dependence on foreign energy.

In 2013, the EPA proposed lowering corn ethanol levels, prompting protests from Midwest state and national leaders.

Iowa leads the nation in corn production and is the second largest soybean grower.

The state is the leading producer of corn and biodiesel.

“Land values have dropped. Corn prices are down below the price of production. I think there’s a growing sense of angst in rural America,” said Shaw, adding that U.S. farmers still remain financially solid, given eight years of strong returns.

“We’re not going from zero to 60 in worry. But people are starting to say, ‘Hey, the ground is shifting.’

”The Iowa association released a report Tuesday saying the industry supported about 46,000 jobs last year, as spending rippled through Iowa’s economy.

"And renewable fuels accounted for 3.5 percent of the Iowa gross-domestic product — $4.9 billion, the group said.

Several speakers — who included former U.S. Sens. Rick Santorum and Byron Dorgan, retired Gen. Wesley Clark and retired U.S. Navy Rear Admiral Len Hering — said the fuel standard is needed not only for energy independence, but for rural development.

Shaw and others at the ninth annual summit said the industry is at a crossroads in its fight with the oil industry and others for increased market share.

“We’re going to need some help to crack through the monopoly,” Shaw said.

“And we would have done that in 2014, but instead we went into regulatory limbo, and we basically are stuck in neutral.

“We’ve grown this industry to a point where we saturated the E-10 market,” gasoline with 10 percent ethanol, he said.

Dorgan, an author of the U.S. fuel standard, said low oil prices should have little effect on support for renewable fuels.

“It doesn’t matter if oil is $10 or $20 a barrel or $110 or $120 a barrel,” said the North Dakota senator.

“You need a diversity of fuels in order to protect this country.

“Today, if Saudi Arabia decided to move oil to $20 a barrel, they have that capability.

"They have those reserves, they have that production capability. They could do that with the snap of a finger. But if they want it to be $120 a barrel, they can do that.”

Santorum, a 2012 GOP presidential candidate, said the industry is creating high-income jobs in rural America where they are desperately needed.

“This is a high-tech industry with tremendous potential,” said the Pennsylvanian lawmaker.

Missouri Gov. Jay Nixon praised a new group that plans to push for support for renewable fuels with presidential candidates who campaign in Iowa, home of the nation’s first caucus.

The group plans to make sure Iowa voters know whether the candidate supports the industry.

Gov. Terry Branstad, who backs the coalition, has been an active renewable fuels advocate.

He canceled his appearance at a summit in Altoona after being hospitalized Monday because of the flu and dehydration. He left the hospital Tuesday and is recuperating.

Amanda DeJong, senior policy adviser of the Iowa Corn Association, said ethanol supporters “have another shot at convincing EPA that it made a mistake. ... That’s given us new life, new opportunities to have some influence.”

Written by Donnelle Eller of Des Moines Register. For more information, please contact deller@dmreg.com

See Related Websites/Articles:

• Iowa Renewable Fuels Association
• Des Moines Register

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