Washington Report: Ethanol Promotes Consumer Choice

Rep. Adrian Smith

   

When it comes to transportation, consumers demand and deserve choice, which means we should continue to advance an “all-of-the-above” approach to energy development and use.  Fossil fuels have and will continue to play a prominent role in our energy portfolio, but alternatives will allow consumers to be the driving force behind a competitive market and, in turn, better prices.  To facilitate further advances, federal policy should be based on science and not undermine innovation. 

Last year, the Environmental Protection Agency (EPA) proposed scaling back the amount of renewable fuels blended into gasoline for 2014.  While any changes to the Renewable Fuel Standard (RFS) would likely not be finalized until this spring, I remain concerned about the implications of this decision.

Ethanol provides consumers in Nebraska and across America with a competitive, clean, domestically-produced alternative.  Congress expanded the RFS in 2007 with the goal of promoting energy independence, and giving Americans greater choice at the pump.

Because RFS levels should reflect market realities, the EPA was given the authority to lower RFS volumetric levels if economic or environmental harm, or inadequate domestic supply, has been established.  I have yet to see compelling evidence indicating any of these criteria have been met, and I have asked the EPA to proceed cautiously to ensure action is taken within its given authority. 

At the time EPA was drafting its proposal to lower RFS requirements, the U.S. Energy Information Administration (EIA) projected gasoline consumption would drop.  The EIA is now forecasting the demand for gasoline will hold steady – meaning more opportunity to blend and deploy renewables than originally anticipated. 

The EPA may have also based their proposal on unsound arguments about the price of food or environmental impact.  Agriculture, however, is not a zero-sum industry.  We do not have to choose between food, fiber, fuel, and feed.  The efficiency and innovation of producers in Nebraska and across the country, combined with new advances in agriculture technology, are making it possible to produce greater crop yields with less land and less water.  

Occasionally nature trumps even the most advanced tools, as we saw last year with one of the worst droughts in U.S. history.  While prices were up and margins were tight for some, producers understand and try to manage the unpredictable nature of agriculture.  This year, however, harvests are soaring, grain prices are falling, and the EPA has proposed punishing efficiency and burgeoning yields by shrinking an important outlet for these crops.  

I am also concerned about the long-term impact this proposal could have on the emerging advanced biofuels industry.  The biofuels and biotechnology industries have made significant progress developing value-added uses for feedstocks, advancing cellulosic ethanol, and producing biodiesel from a variety of inputs including recycled cooking oil and animal fats.  Lowering certain fuel targets could discourage investment in next generation biofuels and auxiliary research.  
I recently joined my colleagues from Nebraska in writing a letter to EPA Administrator Gina McCarthy to express these concerns.  My hope is sound science and the need for consumer choice will guide the agency as it considers these changes.  Growers in Nebraska and around the country are always looking for a better way of doing things.  I am confident, given more certainty and fewer regulatory hurdles, they can meet the wide-ranging demands of a growing world. 

  

Trade Priorities Act Introduced

This week, Congressman Dave Camp (R-MI) introduced the Bipartisan Congressional Trade Priorities Act in the House of Representatives.  This legislation would enhance U.S. leverage in the global marketplace and update Congress’s authority and ability to provide direction to the Administration in trade negotiations.
As Nebraska producers continue to expand their sales around the world, Congress needs to pass the Trade Priorities Act.  At a time when some nations are putting up tariff and non-tariff barriers to U.S. products, this legislation would help our negotiators ensure Nebraska goods and products receive fair treatment in new agreements which would benefit our economy and hardworking taxpayers.
Nebraska merchandise exports, including agriculture, totaled $7.4 billion in 2012.  According to the Nebraska Department of Agriculture, every dollar in agricultural exports generates $1.34 in economic activities such as transportation, financing, warehousing, and production.
  

Sincerely,

ADRIAN SMITHMember of Congress