Don’t cut the line on biofuels

Ethanol and biodiesel are important to the national economy and U.S. energy independence. It’s frustrating when a powerful agency and top executive branch leaders in Washington, D.C., don’t seem to get it.

Midwestern farmers and biofuels makers are watching for the Environmental Protection Agency’s final decision on the 2014 Renewable Fuel Standard rules, which will set the amount of biofuels, such as ethanol and biodiesel, that are blended into the nation’s fuel supply.

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Congress established the RFS as a catalyst for energy diversity and cleaner-burning alternatives to fossil fuels. The 2007 federal law set annual statutory targets for blending biofuels into the nation’s transportation fuels over 15 years.

The EPA administers the law and has authority to adjust biofuels volumes based on anticipated production. For 2013, the law set an RFS target of 16.55 billion gallons. In November, the agency proposed lowering the biofuels target to 15.2 billion gallons for 2014, nearly 3 billion gallons below the statutory target of 18.15 billion gallons.

The EPA based this policy reversal, in part, on the so-called “blend wall,” embracing the argument from big international oil companies that marketers are able to blend only 10 percent of biofuels in each gallon of gasoline. This decision guts an incentive for private-sector investment in advanced biofuels technologies and infrastructure. If the EPA rule stands, it correctly will be interpreted as a sign the Obama administration has given up on the drive toward second-generation ethanol, from woody biomass, agricultural waste and other sources.

It would be a shame to reverse the momentum toward a fresh energy supply. The federal law has helped to displace oil imports. Reading the headlines about foreign wars and even terrorist operations funded by oil income underscores how desirable energy independence has become. Why not produce energy domestically rather than rely on other countries and big international oil companies?

The federal law on renewable fuels has already helped steer entrepreneurs, investors, scientists and engineers toward even more breakthroughs for 21st century alternative fuels yet to be created. More than 200 corn ethanol plants nationwide have the capacity to produce about 15 billion gallons of fuel. The next generation of technology is coming online to make cellulosic ethanol from material such as corn stalks, called stover. The technology is becoming increasingly sophisticated to extract more product from more sources. Shutting down that progress would waste untold opportunities.

The economic value of ethanol and biodiesel is significant. According to the Renewable Fuels Association, the production of 13.3 billion gallons of ethanol in 2013 created 86,504 direct jobs and 300,277 indirect jobs in farming, grain handling and storage, trucking and other areas. These benefits will only increase if ethanol is allowed to flourish to its fullest potential.

Biofuels also provide consumers an alternative to all-gasoline or diesel. Congress has enacted provisions to promote the installation of blender pumps at gas stations nationwide, providing a greater choice of fuels. Unfortunately, the oil companies fight the alternative fuels every chance they get. I have pressed the Department of Justice and the Federal Trade Commission to investigate possible anti-competitive practices by the oil industry. I shared concerns that oil companies allegedly are mandating that retailers carry and sell premium gasoline, which prevents the retailer from selling renewable fuels without installing expensive infrastructure upgrades.

If the EPA prevails with its plan to reduce the Renewable Fuel Standard, the many benefits to the American people of biofuels will remain stagnant or even reverse. The ethanol industry says a reduction in the RFS will force it to increase ethanol exports. Other countries would reap many of the gains of an industry so many farmers, scientists and policymakers have worked to build at home.

The EPA could issue a final decision sometime this fall. The proposal has been pending for almost a year. The wait is hard to take and bad for business. Who wants to invest in an industry that might get undermined at a point that’s impossible to predict?

Those of us who represent biofuels-producing states have weighed in with the EPA and administration leaders, and encouraged our constituents to do the same. I’ll continue to do everything I can to make sure the EPA sees the light. Pure and simple, ethanol and biodiesel have helped to increase domestic energy security, create jobs in rural America, curb pollution with cleaner-burning fuel and offer more choices at the pump for consumers. The Renewable Fuel Standard is good policy for a bright energy future.

Grassley is Iowa’s senior senator, serving since 1981. He sits on the Agriculture, Nutrition and Forestry; Budget; Finance and Judiciary committees.