JOHNSTON, Iowa – One of the federal government’s tools to encourage higher volumes of ethanol in gasoline is developing a dull edge.
In late November, the Environmental Protection Agency decided not to finalize the 2014 Renewable Fuel Standard by the end of the year.
Originally, the agency proposed lowering the volume of renewable fuels to be blended with gasoline in 2014 below 2013 levels, but the amount of comments EPA received on that move, along with other delays, have pushed the agency’s decision into 2015.
Iowa Renewable Fuels Association Executive Director Monte Shaw says his organization hopes pushing the rule back is a signal that EPA will adopt a different mindset in finalizing the rule, though he adds it is difficult to say exactly what’s happening at EPA.
“We’re hopeful, that if they’re going to stick with the rational they have right now, what we call the infrastructure waiver, that we think’s illegal and that, A, it’s wrong, but B, they don’t even have the authority to do it if it were right. If they’re just going to stick with that and change the numbers a little bit, you pick the numbers, you tweak the rational and you get this thing done, for them to push it back so far, we’re hopeful that that’s a signal that hey they have another avenue to go and I can envision a bunch of those. Who knows?”
If EPA does decide to slash renewable volume obligations for 2014, Shaw says a potential side effect is a higher price tag on the farm bill, due to decreased demand for corn from renewables production under the RFS.
“When that was scored,” says Shaw, “the assumption was probably that the price of corn was probably going to stay above the cost of corn. Well, with the productivity of our farmers, if we don’t give them access to those markets like higher-blended ethanol markets, I think you’re going to see that not come back any time soon. So you’re going to see farm bill programs kick in, and payments going to farmers to keep them in business, from that drop in the price.”
To hear more about the RFS decision, click on the audio player above this story.
