Branstad, Reynolds send RFS comments to President Obama, EPA

Date: 
January 28, 2014

Gov. Terry Branstad and Lt. Gov. Kim Reynolds today sent a letter to President Barack Obama and Environmental Protection Agency (EPA) Administrator Gina McCarthy submitting comments and studies that support a robust Renewable Fuel Standard (RFS). The submission, which includes comments from Democrats and Republicans across the Midwest, comes on the final day the EPA will accept comments on their proposed rule to roll-back the RFS. Branstad and Reynolds write, “We write to strongly encourage you to revise and increase the proposed U.S. Environmental Protection Agency (EPA) Renewable Fuel Standard (RFS) volume obligation levels to thresholds that will demonstrate your continued commitment to growing the production and use of renewable fuels.  A robust RFS is needed to provide the Federal policy predictability that rural America needs to continue investments in the renewable fuels that diversify our nation’s energy portfolio, clean the air, provide value-added opportunities to various bio-stocks, give consumers lower-cost choices at the fuel pump, and create good paying jobs that empower rewarding careers.” The letter continues, “As state leaders, we are keenly focused on helping create a business and public policy environment that drives job growth throughout the State – in communities both large and small, urban and rural.  We share the concerns of many Iowans and citizens throughout the Midwest that the EPA’s current proposal will erode the healthy and stable agricultural economy in rural America and abandon the various public policy benefits that flow from the RFS.” The letter includes comments from Iowa’s entire Congressional Delegation, Iowa Secretary of Agriculture Bill Northey, Iowa Economic Development Authority Director Debi Durham, Iowa Department of Natural Resources Director Chuck Gipp, Iowa Department of Transportation Director Paul Trombino, Indiana Lt. Governor Sue Ellspermann, Minnesota Department of Agriculture Commissioner Dave Fredrickson, South Dakota Secretary of Agriculture Lucas Lentsch, Nebraska Department of Agriculture Director Greg Ibach, Iowa Farm Bureau President Craig Hill, in addition to local farmers and business leaders. The letter concludes, “We appreciate your past support on renewable fuels and the commitments you have pledged.  We hope you will protect the RFS, renew your commitment, and stand strong along with us, consumers, and agricultural producers in supporting American-made renewable fuels.” The full letter can be viewed here or below: January 28, 2014 The Honorable Barack Obama                       The Honorable Gina McCarthy President of the United States                        Administrator, Environmental Protection Agency 1600 Pennsylvania Avenue, N.W.                   1200 Pennsylvania Avenue, N.W. Washington, DC  20500                                  Washington, DC 20460 Re: Docket ID No. EPA-HQ-OAR-2013-0479 Dear President Obama and Administrator McCarthy: We write to strongly encourage you to revise and increase the proposed U.S. Environmental Protection Agency (EPA) Renewable Fuel Standard (RFS) volume obligation levels to thresholds that will demonstrate your continued commitment to growing the production and use of renewable fuels.  A robust RFS is needed to provide the Federal policy predictability that rural America needs to continue investments in the renewable fuels that diversify our nation’s energy portfolio, clean the air, provide value-added opportunities to various bio-stocks, give consumers lower-cost choices at the fuel pump, and create good paying jobs that empower rewarding careers.  Specifically, we ask your Administration to increase the biodiesel volume to 1.7 billion gallons, modify the cellulosic level to match production expectations, and to reinstate the conventional renewable fuel target to 14.4 billion gallons since there is no domestic supply shortage.  The gradually increasing RFS levels have been an important part of diversifying our nation’s transportation fuels and reducing fuel costs at the pump. On January 23, 2014, we hosted the “Hearing in the Heartland” in cooperation with the entire Iowa congressional delegation, state leaders, interested citizens and community leaders from across the Midwest.  At this open forum where all interested citizens were invited to present, we heard from 83 panelists from across the Midwest Region that spoke from the heart about the importance of the RFS to their livelihoods and a healthy rural economy; only two individuals presented in opposition to a robust RFS.  As you can see by the numbers, there is overwhelming consensus in the Heartland for the EPA to reverse course on its draft proposal and reject Big Oil’s attempt to get rewarded for bad behavior.  The bipartisan support at the forum mirrored the strong bipartisan support that led to the initial passage of the RFS provisions, which aim to promote the development of a domestic renewable fuels industry.  The RFS, which enables gradually increasing amounts of renewable fuels to be included in nation’s fuel supply, is one of the best recent examples of a policy success that has come out of Washington, DC. As state leaders, we are keenly focused on helping create a business and public policy environment that drives job growth throughout the State – in communities both large and small, urban and rural.  We share the concerns of many Iowans and citizens throughout the Midwest that the EPA’s current proposal will erode the healthy and stable agricultural economy in rural America and abandon the various public policy benefits that flow from the RFS.  For decades, the agricultural economy lurched from crisis to crisis and farmers often depended on government subsidies to stay afloat.  The RFS helped brighten the future of the agricultural sector by providing a stable policy framework that gives value-add opportunities for various agricultural commodities, while helping clean air objectives – a true win-win.  In recent years, there has been renewed interest in agriculture among young people given the hope that follows stable policy, innovation, and technological advancement. In many ways, the agriculture economy has been a bright spot in the national economy over the last five years and the draft RFS proposal would jeopardize the health of the economy in rural America.  Put simply, continuing with the current EPA proposal would create a negative counterbalance to your Administration’s work in the White House Rural Council. During the “Hearing in the Heartland”, there were many references to recent data analyses, not utilized in the EPA’s draft regulations, that we believe provide you the opportunity and obligation to refine the draft EPA proposal.  We have enclosed a document entitled “State of Iowa RFS Proposal Comments:  Legal Concerns, Current Data and Perspective from the Heartland” which shares legal concerns on the EPA proposal, sources for relevant recent analyses, and perspectives of citizens from across the Midwest. If the EPA’s currently proposed rule becomes final, the negative impact would be disproportionately felt by rural America.  According to an Iowa State University estimate, corn prices alone could drop twenty-five cents per bushel based on the proposed rule, which could bring corn prices below the cost of production for many farmers.  The proposed EPA rule could also cause a ripple effect on agri-business, our communities, and the entire economy.  Despite Big Oil’s attempt to pollute the public discourse, corn prices are now close to $4 per bushel, down significantly from the 2012 drought levels of $8 per bushel. We want to address the fuel versus food argument and environmental questions that often enter the discussion on renewable fuels.  At the height of the drought, the ethanol industry was assailed for causing increases in food costs.  If this argument was true, then why have food prices not plummeted now that corn is nearly half the price it was during the drought?  Renewable fuel critics often ignore the fact that a modern dry-mill ethanol refinery produces 17.5 pounds of highly valuable DDGs from one bushel of corn which is utilized by cattle producers throughout the Midwest.  Critics also claim that the RFS has driven more acres into production and increased fertilizer demand.  However, the truth is quite the contrary.  Total U.S. cropland planted to corn in the 1930’s was 103 million acres versus the 97 million acres in 2013, and thanks to improved agricultural practices and the precision of modern technologies and applications, the use of fertilizer has decreased substantially in recent decades.[1] In short, thanks to the productivity of America’s farmers and the innovation in the agricultural and renewable fuel sectors, we can both feed and fuel the world. If the EPA’s proposed rule stands, consumers across America would be limited in their choices at the pump.  When consumers have choices, like they do in Iowa, they choose ethanol and other biofuels.  The oil companies are preventing fuel choice in other parts of the country and consumers lose, paying much more for fuel.  Iowans purchased more than 3.61 million gallons of E85 in the third quarter of 2013, nearly double the 1.83 million gallons of E85 purchased in the first quarter of 2013 and up from the 2.62 million gallons of E85 sold in the second quarter, according to Iowa Department of Revenue data.  Big Oil does not like renewable fuels because they don’t control them – but consumers deserve choice. We urge your Administration to use its regulatory authority in a manner that both supports a growing renewable fuels industry and meets the statutory requirements of the law. We appreciate your past support on renewable fuels and the commitments you have pledged.  We hope you will protect the RFS, renew your commitment, and stand strong along with us, consumers, and agricultural producers in supporting American-made renewable fuels. Sincerely, Terry E. Branstad                                                        Kim Reynolds Governor of Iowa                                                        Lt. Governor of Iowa cc:        The Honorable Tom Vilsack, Secretary, U.S. Department of Agriculture The Honorable Bill Northey, Iowa Secretary of Agriculture The Iowa Congressional Delegation