Iowa Biofuel Producers Are Taking Punches, But Fighting Back

Iowa Biofuel Producers Are Taking Punches, But Fighting Back

New study shows economic impact of biofuels in Iowa remains strong and the industry is worth fighting for.

Iowa Renewable Fuels Association executive director Monte Shaw says Iowa's renewable fuels industry has taken the best punches its opponents can throw and is still fighting back to preserve a strong and growing federal Renewable Fuel Standard,  or RFS. Shaw's comments came during the 8th Annual Iowa Renewable Fuels Summit on January 28 at Altoona. Also at the meeting last week, IRFA released results of a new economic impact study to highlight the importance of fighting for renewable fuels.

TAKING PUNCHES, FIGHTING BACK: "Renewable fuels took a pounding politically in 2013," says IRFA's Monte Shaw. "But the Iowa renewable fuels industry is fighting back! No one ever thought it would be easy to earn market share away from the world's most powerful and profitable industry—the oil industry." A new study shows Iowa's biofuels industry supported 62,000 jobs in the state last year, contributing $5.5 billion to Iowa's gross domestic product.

"While production and profits were sound, the renewable fuels industry took a pounding politically in 2013," says Shaw. "But I stand before you today to declare that the Iowa renewable fuels industry can take Big Oil's punches and we are fighting back!  No one here in this room ever thought it would be easy to earn market share away from the world's most powerful and profitable industry—the oil industry. Fact is, the world needs oil, but consumers also deserve the chance to choose lower cost renewable fuel blends. So, we will never stop fighting to put the option of E15, E85 and biodiesel in front of every American consumer."

Ethanol, biodiesel producers continue to call on EPA to drop its proposal
Responding to revelations that the White House told the EPA that setting the RFS number too low would result in "no harm, no foul" Shaw told the IRFA annual meeting:  "That notion is truly out-of-touch – even for Washington, D.C. Today, Iowa biodiesel plants sit idle waiting for the politicians to make up their minds. And if the EPA proposed rule moves forward, industry observers predict that 25% to 45% of U.S. biodiesel production will shut down, costing thousands of jobs. Do you think those families agree that setting the RFS too low results in 'no harm, no foul?'

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"As soon as word of the proposed 2014 RFS numbers leaked out in the media last fall, the corn market plummeted," notes Shaw. "With corn prices now at or below the cost of production, rural America is about to enter a period of reduced farm income, lower land values, and the inability to make a profit. Do you think a fifth generation farmer forced to auction off his family's Century Farm agrees that setting the RFS too low results in 'no harm, no foul?' President Obama needs to keep his promise about supporting cleaner fuels, consumer choice and cutting oil dependence. He needs to pick up the phone and call the EPA and simply state: Don't mess with the RFS."

IRFA's Shaw: "Corn farmers shouldn't have to go broke just to pad the profits of other industries."
Shaw defends the federal Renewable Fuel Standard against industries that are calling for changes to the standard. EPA has proposed reducing the standard and the oil industry, of course, supports EPA's proposed reduction in the volume of biofuel required to be used each year. The oil industry doesn't want more competition from biofuels in the marketplace.

"With corn prices now at or below the cost of production, I find it troubling that other industries are still complaining about high corn prices and urging the dismantling of the RFS," says Shaw. "Corn farmers shouldn't have to go broke just to pad the profits of other industries. Farmers deserve to farm for a market, not a government program. And consumers deserve choice at the pump, like lower-cost, higher ethanol blends. "

New economic impact study shows biofuels are a manufacturing sector
Also at the Iowa Renewable Fuels summit last week, IRFA released a study conducted by ABF economics economist John Urbanchuk. The study highlights the impact of the renewable fuels industry on Iowa's economy. During 2013, spending on new cellulosic plant construction and research and development offset reduced spending on inputs due to lower commodity prices.

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"The environment facing the renewable fuels industry improved modestly in 2013 and the economy of Iowa benefitted accordingly," says Urbanchuk. "Ethanol and biodiesel producers are part of a manufacturing sector that adds substantial value to agricultural commodities produced in Iowa."

Based on the size and scope year-end, the renewable fuels industry had the following impacts on Iowa's economy in 2013:
Accounts for more than $5.5 billion, or about 4%, of Iowa GDP;
Generates $4 billion of income for Iowa households; and
Supports more than 62,000 jobs through the entire economy.

To view the full report, click here.  

To view Shaw's prepared remarks, click here.

Iowa is the leader in renewable fuels production. Iowa has 42 ethanol refineries capable of producing over 3.8 billion gallons annually, with three cellulosic ethanol facilities currently under construction. In addition, Iowa has 12 biodiesel facilities with the capacity to produce nearly 315 million gallons annually. The Iowa Renewable Fuels Association was formed in 2002 to represent the state's liquid renewable fuels industry. The trade group fosters the development and growth of the renewable fuels industry in Iowa through education, promotion, legislation and infrastructure development. For more information, visit the IRFA website.

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