Iowa Says California Ethanol Rule Not Cool

Iowa Says California Ethanol Rule Not Cool

Iowa corn growers applaud Governor Branstad's and Attorney General Miller's opposition to California law that would adversely impact Midwest corn growers and ethanol plants.

Iowa corn farmers are applauding the state of Iowa's opposition to a California law that if allowed to go into effect would adversely impact agriculture in the Midwest.

In March Iowa Governor Terry Branstad and Iowa Attorney General Tom Miller joined with top state officials in six other states opposing California's effort to enforce a mandate they say discriminates against corn growers and ethanol plants in Iowa and other Midwest states. The California law, if it is allowed to go into effect, gives California-made ethanol a legal preference over Midwest ethanol, and is an illegal trade barrier between states, say the Midwest governors and attorney generals.

Iowa Says California Ethanol Rule Not Cool

Branstad, Miller and the others contend that allowing the California Air Resources Board's fuel standards to take effect would unfairly hurt corn farmers and ethanol markets. A federal judge ruled in December that California's Low Carbon Fuel Standard violates the U.S. Constitution's Commerce Clause by discriminating against ethanol made in the Midwest. California has appealed and has asked to be allowed to enforce the rule while its appeal is pending.

California's low-carbon fuel regulation conflicts with federal standards

The regulation doesn't mandate using specific fuels, but assigns higher carbon scores to fuels made outside California. Groups challenging the regulation say it conflicts with federal standards and rules out fuels from other states.

The state of Iowa has joined the other six states in filing an Amicus Brief in the Ninth Circuit Court of Appeals. The brief, which was filed by Nebraska Attorney General Jon Bruning and co-signed by the attorney generals of Iowa, Kansas, Michigan, Missouri, North Dakota and South Dakota argues that the court should rule against the request for a stay based on the following three arguments:

* California is unlikely to prevail on the merits because California's fuel standards discriminate against ethanol produced in Midwest states in favor of ethanol produced in California.

* California's fuel standards violate the U.S. Constitution's Commerce Clause because it is an improper exercise of extra-territorial regulation.

* A stay of the district court's preliminary injunction and judgments will substantially injure the economies of the Midwest states and is against the public interest.

During the last decade ethanol reduced gas prices in Midwest by 39 cents per gallon

According to a 212 Iowa Renewable Fuels Association study, the ethanol industry in Iowa accounts for nearly $6 billion of Iowa's Gross Domestic Product or GDP. In 2011, the ethanol industry supported more than 82,000 jobs through the entire Iowa economy and generated $3.7 billion of income for Iowa households.

According to the Nebraska Power District Economic Development Department, ethanol production boosts the price of corn by $0.05 to 0.10 per bushel, which ultimately supports family farmers' incomes. Additionally, a May 2011 study by Iowa State University economists found that the past decade of growth in ethanol production reduced gas prices in the Midwest region by $0.39 per gallon.

The full Amicus Brief can be read here: https://governor.iowa.gov/wp-content/uploads/2012/03/Amicus-brief-opposing-motion-for-stay-FINAL-12-151311.pdf
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