Advanced BioFuels USA

by Brian Jennings (The Hill/American Coalition for Ethanol)   … By every measure, increasing the production and use of homegrown renewable fuels has spurred economic growth for U.S. farmers and supported high-skill, high-wage jobs in rural communities.

When the use of renewable fuels is curbed, the opposite is true.

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During this period, EPA sided with oil companies that claimed infrastructure constraints and the mythical E10 “blend wall” prevented higher ethanol blends, such as E15 and E30, from being used in the marketplace.  As a result, leading biofuel groups were forced to sue the Obama administration’s EPA.  This litigation is ongoing and oral arguments were held last week by the U.S. Court of Appeals for the District of Columbia.

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Liquidity ratios and working capital have deteriorated to their weakest levels since 2002 and the value of farm sector assets is expected to decline by $32 billion in 2017.  Farm debt is mounting and will represent about 20 percent of farm income this year.  The share of farm loans that are delinquent is creeping up and reports of farm auctions have been on the rise.

Net farm income has dropped from $124 billion in 2013 to an expected $62 billion in 2017, a decrease of nearly 50 percent since EPA took the RFS off-track.  As some will remember, similar conditions forced Congress to authorize yearly ad hoc economic emergency disaster payments to farmers between 1999 and 2002 and required additional spending of $73.5 billion in the 2002 Farm Bill to avert economic collapse in rural America.  It was enactment of the RFS in 2005 that restarted the rural economy and allowed farmers to profit from the free market versus relying so heavily on government payments.

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To restore badly needed economic security to rural America, EPA and Congress should take a number of steps.   First, Congress must reject any attempt to reduce or repeal the RFS.

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Second, legislative or regulatory action must be taken so E15 and higher blends of ethanol have access to the market.

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A third hurdle impeding the use of higher ethanol blends is the mountain of EPA red tape over the approval process for new certification fuels and the registration of those fuels.  EPA needs to streamline its fuel petition process and eliminate unreasonable criteria for approval of high-octane fuels, such as E25-E40, that currently discourages innovation and obstructs the ability for new efficient high-octane fuels to compete in the marketplace.  READ MORE