The industry that helped give rise to today’s high grain prices is under attack.
A federal program that is the backbone of the U.S. ethanol and biodiesel industry is going under the microscope.
A newly formed U.S. senate group will conduct a review of the Renewable Fuel Standard Program (RFS2), which establishes federal mandates for biodiesel and ethanol.
The RFS2 has been a major factor in the rise of grain prices. The ethanol industry consumed 41 percent of the 2011-12 U.S. corn crop, which is more than what the U.S. livestock feed industry bought.
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One of the group’s founders, senator James Inhofe, has made it clear what he thinks of U.S. biofuel policy.
“I’ve had problems with ethanol for as long as I can remember and I’m going to be doing what I can to relieve that and do away with the mandate,” he told a government-run publication that covers congress.
The group plans to start its work in mid-June and continue its sessions until late September. It will conduct a “seed-to-wheels” analysis of every aspect of the RFS2, including market impacts, environmental issues and its influence on food prices.
The U.S. Renewable Fuels Association said the Senate’s working group is being formed at the same time as a coalition of anti-ethanol groups prepares to launch a multimillion-dollar, multi-year campaign to eliminate the RFS2.
The coalition includes powerful lobbyists like the American Petroleum Institute, Grocery Manufacturers Association, the National Chicken Council and Friends of the Earth.
BiofuelsDigest said the same coalition was responsible for eliminating the ethanol blender’s tax credit in 2011. Its new objective is to repeal or substantially alter the RFS2 by the end of the 113th U.S. Congress Jan. 3, 2015.
“I think it’s really important for the industry to know that the wolves are at the door,” renewable fuels association president Bob Dinneen said in a news release.
“The RFS is under attack in Washington, D.C., today.”
Dinneen said if the ethanol industry is facing a “seed-to-wheels” examination, then the oil industry should be placed under a similar “war-to-wheels” scrutiny.
He anticipates the oil industry will do everything in its power to prevent a plan to increase the allowable ethanol blend at the pumps to 15 from 10 percent.
“It’s going to be up to all of us to explain to people how E15 can’t hurt your radiator and how one fill up can’t hurt your fuel pump,” Dinneen said.
“Brace yourselves. It will be brutal. We are going to have to be vigilant for when this occurs.”
