Ag Policy Blog

Governors Call on Congress to Protect RFS

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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The Governors' Biofuels Coalition that includes the governors of 33 states has appealed to Congressional leaders to leave the Renewable Fuels Standard as it is, amid growing pressure from the oil industry and other interests to either alter the law that calls for 36 billion gallons of biofuels use by 2022 or to scrap the law altogether.

Farm groups and state leaders have pointed to the RFS as an economic development plan that has helped create jobs in rural America, while biofuels opponents say the RFS is broken.

In a letter to Senate Majority Leader Harry Reid and Speaker of the House John Boehner Tuesday, coalition leaders including Iowa Gov. Terry Branstad, Illinois Gov. Pat Quinn and Minnesota Gov. Mark Dayton, the coalition accused biofuels opponents of 'distorting the truth' about the RFS.

The coalition consists of governors in Alabama, Kansas, Nebraska, South Dakota, Arizona, Kentucky, New Mexico, Tennessee, Arkansas, Louisiana, New York, Texas, Colorado, Maryland, North Carolina, Washington, Hawaii, Michigan, North Dakota, Wisconsin, Idaho, Minnesota, Ohio, Wyoming, Illinois, Mississippi, Oklahoma, Indiana, Missouri, Oregon, Iowa, Montana and South Carolina.

"The Renewable Fuels Standard has had a tremendous positive economic impact on the coalition's states and remains an important policy framework to support the national production of biofuels for years to come," the letter said.

"Recent attacks on the RFS have been well-funded, unrelenting and false, and we want to set the record straight."

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The coalition makes the case that biofuels production has reduced U.S. dependence on foreign oil; uncertainty from periodic oil spikes; has diversified the U.S. energy portfolio; has reduced environmental and health effects of transportation fuels; has maximized value-added opportunities for agricultural products; and has created jobs and raised family incomes.

"We believe that there is widespread public support to reinforce policies that help our nation advance in the above outlined areas," the letter said.

The coalition said the RFS has helped the U.S. to start its march toward energy independence.

"The RFS is a policy that works," the letter said. "In 2010, domestic oil extraction yielded the equivalent of 39 billion gallons of gasoline, and 200 plants across the country created 13.2 billion gallons of ethanol.

"Ethanol accounted for 25% of domestically produced fuel consumed by our nation's gasoline powered vehicles."

The coalition cited a 2008 study that found biofuels saved consumers an average of 14 cents a gallon in 2008 and could save as much as 63 cents per gallon when the nation meets the 36-billion-gallon threshold.

"As governors, job creation is our number-one concern and we have witnessed the dramatic economic benefit of biofuel plants in our states," the letter said.

"It remains popular to single out biofuels as the reason for a range of unrelated concerns such as food price increases. Quite simply, these arguments are not factual and they ignore what experts at the World Bank and U.S. Department of Agriculture have identified as the real causes: the dramatic and steadily rising meat demand from an increasingly wealthy China and a continued devaluation of the U.S. dollar that moves nearly all commodity prices -- grain, petroleum, gold, coffee, copper -- upward.

"By intentionally using misinformation, biofuels opponents damage the nation's economy, environment, and energy security. When a biofuels plant is not built, jobs in rural America are lost and income growth opportunities are forfeited.

"When the use of biofuels is not maximized our nation misses an opportunity to produce clean-burning, renewable ethanol and biodiesel that displaces imported oil and produces valuable by-products for domestic use and export. The economic benefit from the growth of advanced biofuels, including biodiesel, as outlined in the RFS will continue, provided that consistent policy signals are maintained.

"However, the uncertainty created by the proposed RFS modifications has made investment more difficult and weakened the market for biofuels, despite falling biofuels production costs brought about by private sector innovation."

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