ICGA Supports Keeping The Current RFS

Iowa Corn Growers Association president says relaxing the Renewable Fuels Standard would raise fuel prices, not lower them.

On behalf of the members of the Iowa Corn Growers Association, Tim Recker, a farmer from Arlington, Iowa, and president of ICGA, issued the following statement in response to Texas Governor Rick Perry's request for a reduction in the Renewable Fuels Standard (RFS).

"The Iowa Corn Growers Association strongly supports the current RFS and maintains that relaxing the RFS would actually cost consumers more at the pump and in the grocery store," says Recker. "In fact, research commissioned by governor Perry from Texas A&M University was released on June 24, 2008. The study showed that relaxing the RFS only has the potential to reduce corn prices. And it would do that by $.24 per bushel."

Ethanol saves consumers 45 cents per gallon

"Also, recent research by Merrill Lynch shows that ethanol is saving the consumer nearly $.45 per gallon of fuel," he adds. "It has also been repeatedly demonstrated that the RFS has minimal effects on food, but delivers a positive benefit on fuel prices under normal market conditions."

"In a slowing economy, the U.S. ethanol industry stands out in stark contrast," notes Recker. "According to economist John Urbanchuck of LECG LLC, the U.S. ethanol industry is a job creating machine with more than 230,000 jobs in all sectors created last year. The ethanol industry has also shown to spur the economy by increasing household income and local community business and creating market opportunities for corn growers. In Iowa, ethanol-blended gasoline helped keep $120 million in Iowa pockets and contributed millions to Iowa's Gross Domestic Product."

"In closing, I'd like to reiterate our support for an aggressive energy policy that moves the United States closer to energy independence. We believe that by relaxing the RFS, we would seriously compromise our ability to keep fuel dollars in the United States to support our current economic growth," says Recker.

Governor Culver urges denial of RFS waiver

On July 3, Iowa Governor Chet Culver sent a letter to EPA Administrator Stephen Johnson in Washington, urging him to deny Texas Governor Rick Perry's request for a waiver from the U.S. Renewable Fuels Standard. Here is the letter:

Dear Administrator Johnson:

As the Governor of Iowa, I stand in opposition to the State of Texas' request for a waiver of the Renewable Fuels Standard (RFS). Although this position was expressed earlier in a letter I supported with a bi-partisan group of my colleagues from the Midwestern Governor's Association (MGA), I write today to underscore the importance of this issue. A waiver of the RFS would not cause an immediate or near-term reduction in corn prices or food prices, but it could have a very negative effect on the development of advanced biofuels and on future national energy security.

Critics have been blaming ethanol for the recent rise in food prices, but in fact a complex set of factors have contributed to those increases in the U.S. and around the world. The primary factors contributing to rising food prices include: oil hovering around $140 a barrel; increasing global demand for grain and meat in nations like China and India; adverse weather events including consecutive drought years in Australia; a weak U.S. dollar encouraging exports; and agricultural policies around the world that have limited the productivity of farmers from Europe to Asia.

A recent study from Texas A&M University concluded, "The underlying force driving changes in the ag industry, along with the economy as a whole, is overall higher energy costs, evidenced by $100 per barrel oil." The fact is that ethanol is helping to reduce gasoline prices at the pump. A recent report from Iowa State University's Center for Agriculture and Rural Development (CARD) estimates that the growth in ethanol production and use has caused gasoline prices to be $0.29 to $0.40 per gallon lower than they might otherwise have been.

A variety of causes determine consumer food prices which cannot be easily explained by singling out one specific factor. Responsibly increasing the domestic production of ethanol, and promoting the development and commercialization of advanced biofuels as the RFS does, are critical to controlling consumer energy costs and assuring our national energy security.

I urge you to deny the waiver requested by Texas.

Chet Culver
Governor of Iowa

Corn growers commend Culver's RFS stand

Leaders of the Iowa Corn Growers Association commend Culver for "standing up for Iowa, ethanol and the Renewable Fuels Standard" or RFS. ICGA president Tim Recker says Culver's letter to EPA in support of the RFS "shows that our governor appreciates what ethanol is doing for Iowa's economy and Iowa's farmers."

Recker emphasized that corn use in ethanol is as important to Iowa consumers as it is to corn growers and Iowa's ethanol industry, citing recent studies that show ethanol use reduces the price of motor fuel in Iowa by about 45 cents per gallon. Supporting ethanol isn't just good for farmers and ethanol producers," says Recker. "It's the right thing to do when we're paying sky-high prices for foreign oil imports."

Culver's letter urged the EPA to deny a waiver of RFS requirements requested by the state of Texas. The Iowa governor, who had already opposed the waiver, sent the letter to EPA to underscore the importance of the issue, says Recker.

Culver noted that a waiver would do little to reduce food prices but could have a "very negative effect on the development of advanced biofuels and on future national energy security." Instead, Culver said that responsibly increasing domestic ethanol production is critical to controlling consumer energy costs.

Iowa leads the nation in corn production and in processing corn into ethanol. The ICGA, which promotes policy issues on behalf of its grower members, is a leader in working for ethanol-friendly public policies like the RFS at both the state and national level, notes Recker.

TAGS: Regulatory
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.