Issue Update: Renewable Fuels Standard (RFS)

Dave Ladd, President of RDL & Associates, was recently a guest on the Linder Farm Network to provide a brief update regarding the pending announcement by the Environmental Protection Agency (EPA) regarding the Renewable Fuels Standard (RFS).

The update can be accessed here: https://soundcloud.com/rdl-associates/linder-farm-network-rfs-november-2015

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Oil, biofuels industries making final RFS appeals to White House (via McGraw Hill Financial)

With the Obama administration likely to announce its long-awaited final three-year Renewable Fuel Standard next week, biofuel and oil industry groups are making their last-ditch efforts to influence the sure-to-be contentious rule.

Ethanol trade groups Growth Energy and the Renewable Fuels Association met with the White House’s Office of Management and Budget on Wednesday to discuss the rule, urging the administration to raise the biofuels mandate volumes from the level it proposed in May.

The American Petroleum Industry, meanwhile, is scheduled to meet with OMB Friday, and is expected to press officials to leave the volumes below the 10% blend wall.

While the Environmental Protection Agency, which administers the RFS, has indicated that it may modestly raise the mandate due to recent increases in US gasoline consumption and vehicle miles driven, all bets are off as to what the final rule will contain.

“I don’t think any one of us can tell you what we expect the administration to do,” Roger Johnson, president of the National Farmers Union, which backs a stronger RFS, said Thursday.

The EPA faces a November 30 deadline to issue the final RFS rules for 2014, 2015 and 2016. But sources said they expect the agency to announce the rules early next week, before the Thanksgiving holiday and before EPA Administrator Gina McCarthy heads to Paris for UN climate talks that begin November 30.

“The ideal goal is next Wednesday, but it’s just a question of whether all the work can be done prior to the weekend,” one lobbyist, who asked not to be identified, told Platts.

The RFS, created by Congress in 2005 and expanded in 2007, requires annually increasing amounts of biofuels — including corn-based ethanol, biodiesel, advanced biofuels and cellulosic biofuels — to be blended in with the US transportation supply.

The EPA in late May proposed requiring 15.93 billion gallons of biofuels in 2014, 16.30 billion gallons in 2015 and 17.40 billion gallons in 2016 — levels that the biofuels industry has said is too low and the oil industry has protested is too high.

DEFINITION OF ‘SUPPLY’

Biofuels advocates said they will be looking closely not only at the final volumes, but also at the language the EPA uses in justifying them.

The statute allows the EPA two reasons for a general waiver to lower the volumes for a particular year: If it determines there is “inadequate domestic renewable fuel supply” or if the mandate would “severely harm the economy or environment.”

The EPA cited the inadequate supply provision in proposing the 2014, 2015 and 2016 volumes, based on the inability of US fueling infrastructure to handle significant quantities of ethanol blends above 10% — the so-called blend wall.

The biofuels industry has said that Congress expressly rejected fueling infrastructure limitations when it created the RFS and set the statutory levels.

“It’s not the numbers that are the most troubling. It’s the language that redefines the word ‘supply,’ from supply of biofuels to the supply of biofuels to the consumer,” said Adam Monroe, president of advanced biofuels developer Novozymes America. “When we’re capable of producing the fuel, and yet you waive that because someone downstream who’s obligated [to blend the fuel] says they can’t do it, that turns the whole thing on its head.”

The oil industry, which has sought a repeal of the RFS through Congress and the courts, has argued that insufficient fueling stations are equipped to offer ethanol blends higher than 10% to consumers, and that consumer demand for the higher blends does not exist.

It has urged the EPA to set the ethanol volumes at below 9.7% of US gasoline demand.

“We don’t think the American consumer should be a guinea pig to test the blend wall,” said Bob Greco, the API’s downstream group director. “A floor of 9.7% helps support the ethanol industry while protecting consumers.”

For 2016, the EPA said its proposal would require about 840 million ethanol-equivalent gallons beyond that supplied by E10, cellulosic biofuels and biodiesel. The end result would be a nationwide ethanol blend of between 10.05% and 10.28%, above the E10 blend wall.

According to the Energy Information Administration, domestic ethanol production averaged 968,000 b/d for the last four weeks, for an annualized rate of 14.84 billion gallons.

US gasoline demand last week averaged 9.054 million b/d, while refiner/blender input of ethanol averaged 870,000 b/d, or 9.6% of gasoline demand, EIA figures show.

The article can be accessed here: http://www.platts.com/latest-news/agriculture/washington/oil-biofuels-industries-making-final-rfs-appeals-21501315

GMO labeling fix could slip into spending bill (via Agri-Pulse Communications)

House appropriators are open to using the government-wide fiscal 2016 spending bill to block Vermont and other states from requiring the labeling of foods with biotech ingredients.   The top Democrat on the Senate Agriculture Committee, Debbie Stabenow, has been leading discussions on the Senate legislation that would preempt state labeling laws and instead require genetically engineered ingredients to be disclosed instead through smartphone codes and on the Web.

Dropping the measure into the omnibus spending bill would make it almost impossible for biotech critics to stop.

“We would certainly be open to looking at” including the labeling legislation, Rep. Robert Aderholt, chairman of the House Agriculture Appropriations Subcommittee, said after a private briefing for House members on the spending bill.

Stabenow has told Agri-Pulse that the GMO labeling issue is one of several, including child nutrition reauthorization, that could be addressed in the omnibus spending bill that needs to be enacted by Dec. 11.

Food companies are eager to see the biotech issue addressed well before the first state labeling requirement takes effect in Vermont next July.

The House passed a bill this summer, 275-150, to preempt state labeling laws, but it didn’t include the electronic disclosure requirement that Stabenow has been pursuing. She indicated that the Agriculture Department has been assisting with developing a compromise plan.

“Obviously we’ve got to get something done,” said House Agriculture Chairman Mike Conaway, who attended the appropriations briefing.

“If you’ve got a label on a can that’s not going to get sold until July … you can’t wait until June 30 to figure out that label has to look like,” he said. “You have to start that lead time now. It’s having an impact.”

Rep. Dan Newhouse, a Washington Republican who also attending the briefing, said he pushed for inclusion of the GMO labeling measure.

EPA official discusses upcoming RFS announcement (via Brownfield

Supporters and critics of the Renewable Fuels Standard (RFS) are presenting their final arguments as the Obama Administration nears a decision on the final renewable volume obligations for 2014, 2015 and 2016.

Both sides have been writing letters to Administration officials and running advertisements in the D.C. area, hoping to influence the final outcome.

Meanwhile, EPA official Ron Carleton—counselor to the EPA administrator for agricultural policy—tells Brownfield that the agency has worked diligently to find the right balance in those numbers.

“Our RFS team at EPA has been combing through that, reviewing the comments and the new data, to try to craft numbers that promote growth in renewable fuels—while having numbers that are also attainable and reasonable as well,” says Carleton.

Many analysts predict the final numbers will fall somewhere between what the original RFS called for and those proposed earlier this year by the EPA.

“Even if you just look at the proposed numbers, it does show growth in the renewable fuels that would be blended over time with gasoline and others,” says Carleton. “We think it is aggressive growth and we think it fulfills the intent of Congress in terms of promoting renewable fuels.”

The final numbers are currently being reviewed by the White House Office of Management and Budget. It’s the final step in the review process and indicates the Administration is on track to meet the November 30th deadline for finalizing the rule.

The audio can be accessed here: http://brownfieldagnews.com/2015/11/16/epa-official-discusses-upcoming-rfs-announcement/

Radio Interview: Overview of Key Agricultural Issues in Washington, D.C.

Dave Ladd, President of RDL & Associates was recently a guest of KTLF Farm Director Scott Colombe to discuss recent developments related to the recent court ruling regarding the Keystone Pipeline, Trans Pacific Partnership (TPP), Waters of the United States (WOTUS) and GMO labeling.

For additional information, please contact RDL & Associates at (651) 247-5458 or via daveladd66@gmail.com.

The segment is 14:00 in length and can be accessed here: https://soundcloud.com/rdl-associates/ktlf-radio-keystone-pipeline-tpp-wotus-and-gmo-labeling

Combined Congressional Calendar

United States Senate Majority Leader Mitch McConnell (R-KY) and United States House of Representatives Majority Leader Kevin McCarthy (R-CA) have released their respective legislative calendars for 2016.

Ads seek state GMO preemption bill support (via Politico)

The food and agriculture industry are launching a set of online ads this week to urge farm-state Democrats in the Senate to back a bill that would preempt state GMO labeling laws and put in place a voluntary labeling system, much like the House-passed Safe and Accurate Food Labeling Act from Representative Mike Pompeo (R-Kan.).

The ads, which target lawmakers in seven states and tout GMOs for creating affordable and safe food, will start running on Monday with a spot aimed at Minnesota Senators Amy Klobuchar and Al Franken.

Senators John Hoeven (R-N.D.), Pat Roberts (R-Kan.) and Debbie Stabenow (D-Mich.) have said they are working on a bill that would put an end to the state mandatory GMO-labeling efforts, with the aim of getting it passed in the Senate by the end of the year.

The Minnesota ad is here: https://youtu.be/BkrYNmWcSCE A longer version of the spot is here: https://youtu.be/b2MMF3jLZaE