Stephanie Herseth Sandlin & Tom Ewing from 25×25 Alliance wrote an Op-Ed today titled Leave Renewable Fuels Standard Alone. Below is the Op-Ed which was published today in Politico.
August 21, 2012
Stephanie Herseth Sandlin & Tom Ewing
America is suffering from the worst drought since the Dust Bowl. Thirty-two states have been declared natural disaster areas, rural communities are hurting, and lawmakers from the local, state and national level are looking for solutions. As often happens in times of crisis, a potential solution is being touted that would have drastically negative consequences in the long run – altering America’s Renewable Fuels Standard, or RFS.
For the sake of the very rural communities suffering today, and for our energy and national security long-term, it is essential that any decision related to the RFS be based on on-the-ground realities, not political agendas – and that we keep a clear-eyed focus on both the actual needs of rural communities and our national energy goals.
We are concerned that recent calls by some elected leaders to temporarily waive the RFS’s corn ethanol requirement actually represent a re-launching of opposition to the RFS as a whole, or to biofuels in general. Such opposition must be recognized and opposed.
Three realities must form the basis of America’s biofuels policy in the context of the current drought.
The first is simple: there is little connection between ethanol production and corn prices. The numbers make this clear. Corn prices have climbed more than 50 percent since mid-June. Meanwhile, ethanol production has fallen 15 percent since the beginning of the year, partly due to lower yield projections and partly due to an increase in the price of corn. If ethanol production drove corn prices, less ethanol would mean cheaper corn. But it doesn’t.
The RFS itself also created market mechanisms to keep ethanol production from affecting corn prices. These include the 2.5 billion RFS credits, or RINs, currently in the market. These RINs represent 950 million bushels of corn (more than the carryout for the 2011-2012 corn marketing year), and are paper credits available to refiners to help meet RFS blending requirements this year. That means less corn will have to be purchased to produce ethanol. There are also 800 million gallons of surplus ethanol in storage for potential use – another hedge against consumption of the corn crop.
The second reality is that biofuels, and the RFS itself, are essential to moving America away from expensive, foreign oil.
America’s pursuit of clean and domestically produced transportation fuels stemmed from a belief among Democrats and Republicans that current methods of powering our vehicles were unsustainable and a risk to our national security. That belief was strong in 2005, when the first RFS was created, and strong in 2007, when the RFS was expanded to include more advanced fuels.
The need to move in this direction has never been greater, and biofuels’ contribution to the solution is clear. Domestic biofuels have reduced oil imports from the Persian Gulf region by 25 percent since 2000, and thanks in part to the RFS, U.S. oil imports fell below 50 percent for the first time since 1997, standing at about 45 percent today.
This is also a pocketbook issue for American voters. Ethanol lowered gasoline price for drivers by an average of $1.09 in 2011, according to Iowa State University’s Center for Agricultural and Rural Development. While gas prices fell earlier this summer, they are rising again and topped $3.70 per gallon for the first time since mid-May. Thirty-nine states are now seeing higher gas prices than at this time last year. The need to maintain our biofuels production as a hedge against pain at the pump is obvious.
The third reality is perhaps the most important. America is about to begin producing biofuels from non-food feedstocks at an industrial scale for the first time, fundamentally altering how we fuel our lives.
Thanks to the RFS and related policies, the advanced and cellulosic biofuels industry has gone from a science experiment to a job-creating industry in the very communities now hit by the drought. Billions of dollars have been invested by the private sector, and steel is going in the ground in rural America right now. Undermining the RFS, or even creating uncertainty around its future, would put the future of those investments, jobs and communities in question.
Granting any waiver based solely on political expediency would be inappropriate. Indeed, that would pile disaster upon disaster for the very communities suffering from the drought, putting us on a path of undoing the RFS’s work longer-term. If our priority is helping rural America and continuing to enhance our energy security, we must prioritize protecting the RFS.
Stephanie Herseth Sandlin represented South Dakota in the U.S. House of Representatives from 2004 to 2011. Tom Ewing represented Illinois’ 15th Congressional District from 1991 to 2001. Both currently serve on the Steering Committee of the 25x’25 Alliance.
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