Wide range of views unfolding at ethanol hearing

26 Jun 2015 | Author: | No comments yet »

Big turnout is expected Thursday in Kansas City, Kan., for EPA hearing on ethanol.

What’s expected to be hours of testimony on the federal mandate for using ethanol is underway today in Kansas City, Kan., and a wide range of views were expressed. KANSAS CITY, Mo. • A federal proposal to reduce the amount of renewable fuels required in gasoline would have a stifling impact on the ethanol industry and goes against the intentions of Congress when it set the standards eight years ago, opponents of the suggested changes said.Nebraskans who don’t agree on much otherwise were among the vanguard of ethanol advocates telling the Environmental Protection Agency Thursday not to slash billions of gallons of ethanol from the Renewable Fuel Standard.

The EPA estimates that the hearing, starting at 9 a.m. and running for several hours in two rooms at the Jack Reardon Convention Center, will draw 240 speakers and at least 400 people total. Terry Branstad of Iowa, the top state for both corn and ethanol production, and Jay Nixon of Missouri trumpeted the economic benefits of the fuel, several billion gallons of which is blended into gasoline every year. The changes the EPA proposes would reduce the amounts of ethanol to be used this year and next from what Congress originally mandated in a 2007 renewable fuel law. The EPA says it’s reducing the volumes because infrastructure inadequacies limit how much can be consumed and because the industry isn’t able to produce enough non-ethanol fuels to meet the requirements.

However, corn growers and other supporters of the higher standard say they’re needed to force oil companies to improve infrastructure at gas pumps to deliver ethanol fuel blends above the current 10 percent mix. “The EPA has a choice: protect the deep pockets of Big Oil and their monopolistic practices or nurture consumer choice, renewable energy growth and a healthy rural economy,” Branstad told a panel of EPA officials. That demand has helped sustain higher corn prices. “Ethanol production is important for the rural communities we call home,” said Jim Zook, executive director of Michigan’s Corn Growers Association. “Every one of Michigan’s ethanol plants is located in a rural area, and they collectively employ a few hundred workers.” Ethanol producers represented by groups such as the Renewable Fuels Association are expected to talk about how it has revived towns where production plants are located, and in regions where farmers’ spending helps other businesses grow. Chris Grundler, director of the EPA’s office of transportation and air quality, said the proposed standards are consistent with Congress’ goal of increasing renewable fuel production and use over time, he said. “Simply setting the standards at levels targeted by Congress and trusting that this will sufficiently incentivize the market to achieve the mandates for 2016 would be irresponsible, and would have significant negative impacts including widespread noncompliance,” he said.

The oil industry argues that many retailers aren’t equipped to sell gasoline containing more than 10 percent ethanol and that customer demand doesn’t warrant the investment retailers would have to make to upgrade their pumps. “Oil and gas companies only control about 5 percent of retail gas stations. Next-generation biofuels, made from agricultural waste such as wood chips and corncobs, have not taken off as quickly as Congress required and the administration expected. Environmental groups have argued that not only does ethanol add to global warming by removing millions of acres of land from the Conservation Reserve Program for use in corn production, but it also has caused a sharp increase in food costs worldwide as more of the U.S. corn supply is used for fuel. They generally say they favor letting market forces, rather than government subsidies or mandates, dictate energy use. “Most cars can only operate on a ten percent ethanol blend,” said Bob Greco, a director at the American Petroleum Institute who traveled here from Washington, D.C. “As long as the EPA mandates stay below ten percent, then that’s an acceptable level.” And environmental groups could present varying views. He told the hearing he uses no-till farming methods to capture carbon and build soil health, soil sensors to preserve water and solar panels provide most of the farm’s electrical energy.

The Missouri Coalition for the Environment is expected to oppose the mandate entirely and present evidence that ethanol, on balance, is bad for the environment. Industry growth will be sharply curtailed if retailers and oil companies aren’t required to increase the use renewable fuels in their gasoline, Bowling said, which is exactly what Big Oil wants. The EPA also has noted that its revised standards promote the development of more advanced forms of ethanol that don’t rely on corn and can burn more cleanly but also recognize that development has lagged Congress’ hopes. There has also been less gasoline use than predicted, the EPA said. “Regulatory uncertainty is hurting this slice of the economy in Mid-America,” said Kelly Gilbert, of Kansas City Clean Cities Coalition. “It’s clear by now that’s imperative that my stakeholders…have a stable regulatory environment so that a mature biodiessel market can finally maturely develop.”

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