House panel hears more calls for RFS reform
WASHINGTON, July 24, 2013 - A House Energy subcommittee
heard more calls today for changes to the federal Renewable Fuels Standard
(RFS), with one witness telling the panel, “If we can’t fix it, it needs to be
repealed.”
William “Bill” Roenigk, a former senior vice president of
the National Chicken Council, told the House Energy and Power Subcommittee that
the RFS, as updated by the Energy Independence and Security Act of 2007, “is
not just broad and complex, but (is) also a statute that has outlived its
usefulness.”
Reonigk, testifying during the second of two days of
hearings soliciting testimony from stakeholders ranging from biofuel producers,
feedstock growers and end users, said the RFS pushed demand for ethanol skyward,
rapidly increasing the price of corn and imposing high feed costs on the
poultry industry.
He said that over the past seven years, poultry and egg
producers have paid feed costs totaling some $50 billion more than what corn
and soybean meal prices would have been at pre-2006 levels.
“It is an understatement to say, ‘It has been difficult to
pass this increased cost on to the chicken buyers,’ whether they are
supermarkets, restaurants, further processors, or buyers overseas,” Roenigk
told the panel. He said the increase in costs is primarily responsible for the
recent troubles in the U.S. chicken industry. A dozen of the 40 vertically
integrated companies that make up the bulk of the sector are either going out
of business or being sold to foreign interests.
“The negative and, perhaps, unintended consequences of
forcing a move too far and too fast with corn-based ethanol have become overly
clear and overly painful,” he said. “It has also become overly clear and
apparent that there is no workable or reasonable provision in the RFS to
provide flexibility when the corn supply is severely inadequate to meet all
needs.”
Roenigk told subcommittee Chairman Ed Whitfield, R-Ky., that
if the RFS can’t be fixed, “it needs to be repealed.”
However, Pam Johnson, president of the National Corn Growers
Association, reminded subcommittee members that less than a dozen years ago,
corn was $2 per bushel and rural America was in a financial crisis. At the same
time, she said, livestock producers “benefited considerably from these
significantly below market prices.”
The RFS, Johnson said, was one of the policy tools adopted
by Congress to revitalize U.S. agriculture. Furthermore, it has become “a
critical piece of our nation’s energy policy,” creating jobs, lessening U.S. dependence
on foreign oil and improving the environmental footprint of the nation’s
transportation fuels, she said.
Johnson also cited the RFS’ role in “spurring innovation and
helping drive the development of advanced and cellulosic biofuel facilities. In
short, it is doing exactly what it was designed to do – spur the development of
a significant alternative to petroleum that ignites economic development for
those who produce these new fuels and for those who use it.”
The issue of ethanol’s carbon footprint drew conflict when
another witness, Scott Faber, vice president of governmental affairs for the
Environmental Working Group (EWG), cited a 2010 EPA assessment and a 2011
National Research Council report suggesting ethanol’s lifecycle carbon emissions
ran higher than those emitted by gasoline, primarily due to corn production.
In questions from the chair, Whitfield indicated that he did
not believe that the RFS was meeting two of the three goals it was drafted to
achieve, including a reduction in greenhouse gas emissions (GHGs). He also said
the recent discovery of new oil and natural gas deposits in the United States has
negated the RFS goal of reducing U.S. imports of foreign oil.
But NCGA’s Johnson disputed contentions that ethanol is not
improving the carbon footprint of transportation fuels, asserting that advances
in technology and “smarter farming” has reduced GHGs from the production of
corn by 36 percent, despite the increased demand for corn-based ethanol.
She said the RFS was needed to continue the pursuit of fuel
alternatives to the ultimately “finite” supply of fossil fuels. She said corn
production over the past three decades has seen decreases in land use by 30
percent, soil erosion by 67 percent, irrigation by 53 percent and energy use by
43 percent.
EWG’s Faber said the corn ethanol mandate should be phased
out of the RFS, a move he said would reduce GHG emissions and “create a level
playing field for livestock producers.” He said the RFS should focus on
accelerating the development of advanced, non-food crop biofuels.
Whitfield offered no timeframe on any changes to the RFS,
concluding the hearing by saying lawmakers would address purported inequities,
but proceed “cautiously.”
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