Biofuel Standards Help Small-Town Minn.


Jan 13, 2014

By Sen. Amy Kobuchar

From opening our first E15 station, to blending higher amounts of biodiesel, to developing processes to make renewable fuel out of new feed stocks, Minnesota is leading the way and driving the next generation of renewable fuels.

We are using our resources and developing new energy technologies that are creating jobs, increasing domestic energy production and decreasing our dependence on foreign oil.

Unfortunately, a recent proposal from the U.S. Environmental Protection Agency to lower the biofuel targets for 2014 threatens the progress we have made.

The EPA’s proposed Renewable Fuel Standard rule would, for the first time, allow oil companies to blend incrementally less renewable fuel into the gasoline and diesel supply. It would create a disincentive for fuel retailers to install the blender pumps that are needed to continue to increase our use of biofuels.

Without that infrastructure in place, we never will be able to develop the next generation of biofuels.

This comes at the same time when the industry already has been challenged by the uneven playing field created by the fact that oil companies continue to get billions of dollars in subsidies while the ethanol subsidy has been eliminated.

In Minnesota, the damages would be felt in communities across our state. The Minnesota Department of Agriculture estimates the proposed rule would lead to 1,500 lost jobs and cost the state $600 million in lost economic activity.

The rule change would create uncertainty around a program that has proven to be successful. Because six years into a 15-year policy, the RFS is working. It’s the equivalent of a football coach benching the quarterback midway through a winning season.

With so much progress, now is not the time for drastic changes.

Our economy is in a better place as a result of the RFS. Nationally, the biofuels industry supports more than 350,000 jobs. These are jobs that have been grown in communities across Minnesota.

With 10 percent of our fuel supply now coming from biofuels, this policy also has played a major role in reducing our dependence on foreign oil. Since 2005, our dependence on foreign fuels has fallen from 60 to 40 percent as we continue to move toward homegrown energy sources.

Last but not least, consumers are benefiting from competition at the pump. In Minnesota, sales of E85 have doubled since the beginning of the year because the RFS was helping consumers save at the pump when they were filling up with renewable fuels.

It’s also worth noting that at the same time we are seeing an expansion in biofuels, gas prices — while not as low as we would like — are down, and corn prices have gone down by 45 percent.

All these benefits are why I recently organized a bipartisan meeting in my office with 15 other senators and the EPA administrator to highlight just how important a strong RFS is to rural economies and to urge changes to the proposed rule. It was a constructive conversation, with Democratic and Republican senators from states as diverse as Hawaii, North Dakota and Michigan making the argument for a strong RFS.

I believe that legislative policy works best when it is stable, predictable and provides businesses the ability to make long-term investments. We need to provide the certainty farmers and biofuel producers need to make plans and investments, and that is why I will continue to fight to get a long-term farm bill done, and why we must work together to fix the proposed rule and preserve the integrity of the RFS.

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