Detriments from RFS rollback are obvious
The Environmental Protection Agency saw furious bipartisan criticism last week opposing their suggestion to reduce ethanol production requirements for the Renewable Fuel Standard. Lawmakers and other ag industry leaders from across the Midwest met in Des Moines at special hearing on Thursday, and their displeasure with the EPA’s proposal was clear.
Current RFS requirements stipulate 18.15 billion gallons of renewable fuel production for next year – 14.4 billion gallons of ethanol and 3.75 billion of advanced biofuels. However, last fall the EPA suggested the mandate get rolled back to 15.2 billion gallons – 13.01 billion gallons of ethanol and 2.2 billion gallons of advance biofuels. The EPA’s proposal has forced speculation about plummeting land values, turbulent commodity markets, and crashing crop prices. Iowa Gov. Terry Branstad even went as far to suggest that the rollback could have repercussions on the state’s agriculture industry that mirror the farm crisis of the 1980s.
It’s hard to fathom just how damaging an RFS rollback could be on Iowa’s economy. Corn is king here, and reducing the demand by lowering federal ethanol requirements creates obvious. Thousands of Iowans are employed across the state at ethanol plants and other renewable fuel-related jobs, and cutting production would jeopardize employment for those individuals both here and throughout many other Midwestern communities. Branstad estimated the rollback would cut 45,000 jobs nationally. That number could be debated, but it’s obvious a RFS reduction would have an immediate impact on employment rates in rural communities like ours.
The EPA’s proposal draws into question many other concerns outside the obvious repercussions on employment. The past two decades have produced federal energy policies that stressed renewable fuels like ethanol, but the RFS rollback would significantly deviate from such precedent. If we reduce renewable fuel production, where do we go from here? Ethanol helps alleviate some oil dependence by producing a suitable alternative that’s friendlier on the environment. If there’s no alternative to ethanol and other current renewables, then there shouldn’t be a cutback in production. After all, America’s dependence on fossil fuel is an addiction with a timer – oil isn’t going to be around forever. Investing in the best alternative is key if we’re to continue weening ourself from Big Oil.
America will have to make up the 2.95 billion gallon deficit somehow if the EPA’s proposal is given the go-ahead. Many politicians have speculated we’ll set our sights on the Middle East, some have guessed we’ll place more emphasis on oil sands and fracking. Either way, it seems the oil companies will most likely reap the benefits from a RFS rollback. A lowered standard means the companies will just lessen the amount of ethanol they blend into their gas, in turn boosting the amount of petroleum they sell.
The recent outcry by Midwestern politicians may seem reactionary, but it’s warranted – a RFS rollback would have an economic impact at the local, regional and national levels. The entire ag sector would feel a financial pinch following a rollback which could send ripples throughout rural economies. We constantly stress renewable fuels to substitute our oil dependence, but cutting production standards and lessening emphasis on energy sources like ethanol is certainly backwards way of showing commitment.