August 05, 2012
Protect the Renewable Fuel Standard
The future of our nation’s energy sector is at stake, and we need your support. The Renewable Fuel Standard (RFS) is under attack by groups who have long opposed producing fuels from our farms. They are now using the drought to blame ethanol for the increases in corn prices we have witnessed over the past several weeks, which is not true! It is not just corn prices that have risen to record highs, but also other crops, and it is not ethanol driving these commodity prices to record levels – but Mother Nature – as the most severe drought in decades has engulfed our nation’s breadbasket.
The RFS, that Congress passed and President Bush signed into law, is our nation’s only successful energy policy in 40 years. The RFS has driven American innovation since its implementation in 2005, boosting our domestic ethanol industry, sustaining our economy, helping reduce our dangerous dependence on volatile oil markets, creating more than 400,000 jobs across the country, improving our nation’s air quality and saving consumers at the pump.
Our critics are falsely blaming corn famers and ethanol producers for the current climate, ignoring the truth about the RFS. In fact, the RFS is built with market flexibility in mind, and is able to withstand fluctuations and maintain long-term growth for the American economy. There are 850 million gallons of surplus ethanol in inventory, plus obligated parties (oil refiners) have access to over 2.5 billion surplus RFS credits that can be used to meet the RFS volume requirements. In addition, an obligated party can carry over RFS credit deficits into the next year if needed. The RFS was designed to meet unexpected events like the one we are experiencing this year. There is no reason to fix something that is not broken.
Furthermore, it is important to let the marketplace work; in fact, it is already working. The ethanol industry has already cut production by 14% in the past few weeks, as some plants have shut down and others have scaled back production. Since last year, we have cut production from 960,000 barrels a day to 797,000 barrels a day. Other corn users will follow suit. This is how markets work; having the Federal Government intervene to manage the market would be a big mistake. It would have unintended consequences!
Ethanol critics are also using false information in their attacks on the RFS, claiming that ethanol uses 40 percent of the corn crop, which is the gross amount of corn used, not the net amount. The only part of corn used in ethanol production is the starch. All the protein, fiber and oil from corn is returned into the cycle as a livestock and poultry feed known as distillers grains. These distillers grains not only replace corn in animal livestock feed, but also soybean meal. Thus, the net corn acres used for ethanol is 16 percent, not 40 percent -- a big difference!
We hope you understand the benefits of the RFS. Ethanol has numerous valuable benefits: it has created more than 400,000 direct and indirect jobs that cannot be outsourced; it displaces 10 percent of our gasoline; it helps reduce our dependence on foreign oil from over 60 percent a few years ago, to 45 percent today; it improves our air quality, revitalizes our rural communities, and reduces federal farm program costs; and, most importantly, it provides savings for consumers at the pump.
Americans deserve reliable, cleaner, homegrown renewable energy supplies – and the RFS delivers. This policy has boosted our nation’s biofuels industry, which is at the cusp of even greater innovation, poised to make huge contributions to the American energy sector and economy.
So, Congress, please don’t mess with a policy that decreases our dependence on foreign oil, creates thousands of American jobs, and produces cleaner, homegrown renewable energy.
Protect the RFS!