Iowans Blast EPA’s Decision on RFS – How It May Impact 2016

After a year of delays, the EPA finally released its new proposal on the Renewable Fuel Standard, governing how much ethanol is blended into the country’s fuel supply. The decision angered many. The EPA proposed setting the amount of renewable fuels to blend at 17.4 billion in 2016, considerably less than the 22.3 billion amount Congress set out.

Renewable fuels and corn-grower groups say that could cut by 10% the 2016 demand for corn production. In Iowa that will likely mean lower corn prices and a stagnation in the development of renewable energy.

“It’s Christmas in May for Big Oil,” railed Senator Chuck Grassley in a statement put out by his office. “President Obama’s EPA continues to buy into Big Oil’s argument that the infrastructure isn’t in place to handle the fuel volumes required by law. Big Oil’s obstruction and the EPA’s delays and indecision have harmed biofuel producers and delayed infrastructure developments.”

“I am disappointed the EPA has issued renewable volume obligations (RVOs) not meeting the levels set by Congress,” said Congressman David Young in a statement. “What’s worse is the dubious reasoning they use for not meeting these levels. The EPA’s delayed actions and backwards justifications have created uncertainty in the industry, constrained investment, hurt rural America, and reduced consumer choice.”

“While the EPA’s proposal today is an improvement over its first, disastrous 2014 proposal, it clearly reflects a flawed methodology that rewards the oil industry for failing to live up to its obligations under the RFS,” said the statement from America’s Renewable Future, a group backing renewable fuels. “American consumers, rural economies, and domestic energy investors lose out to the oil industry’s demands in this proposal.”

Expect the EPA’s decision to seep into the presidential race on both sides. Republicans who love to trash the EPA will have a new, very Iowa-specific reason to do so. Though any criticism may only sound authentic with certain candidates. Mike Huckabee, Lindsey Graham and Jeb Bush have backed the RFS. Rick Santorum repeatedly brings up ethanol any chance he gets at events in Iowa. Rick Perry usually focuses his speeches on Texas’ oil success, and has opposed the ethanol standard in the past. Ted Cruz could have the most to lose by Iowans getting angry over the RFS, as Cruz flatly opposes the mandate outright.

Marco Rubio will be one to watch. He was one of the few who didn’t attend the Ag Summit earlier this year, and hasn’t addressed the topic yet. This development will put increased pressure on Rubio to finally take a stand.

On the Democratic side, Martin O’Malley indicated his support during his announcement tour in Des Moines this weekend. “It’d be my hope that we continue to keep a high, renewable fuel standard, and that we move into celluosic fuels,” O’Malley told a crowd of Democratic activists. “The best way to do that is to keep the standard high. When you lower it, it creates all sorts of uncertainty about policy and direction.”

For her part, Hillary Clinton put out a full op-ed in the Cedar Rapids Gazette last week about investing in clean renewable energy. She specifically hit oil subsidies and strongly backed the RFS. “We have to get the RFS back on track in a way that provides investors with the certainty they need, protects consumers, improves access to E15, E85, and biodiesel blends, and effectively drives the development of cellulosic and other advanced biofuels,” Clinton wrote. The focus of the op-ed itself is rather notable, as Clinton’s had only one other major guest piece in the Des Moines Register – it’s not like you get to place these things every week.

More intriguing – is Clinton’s strong stance a challenge to Republicans for the general election? Her op-ed may be less about the Iowa Caucus and more about putting her marker down on an issue for November 2016 that enjoys wide support in certain swing states. Republicans like Rubio can’t just think about the RFS in terms of how it will play in the primary.

by Pat Rynard
Posted 6/3/15