Day 2 of House RFS hearing focuses on agriculture, food

By Erin Voegele | July 24, 2013

On July 24 House Energy and Commerce Committee Subcommittee on Energy and Power hosted the final panel of its two-day hearing on the renewable fuels standard (RFS), titled “Overview of the Renewable Fuel Standard: Stakeholder Perspectives.”  The panel focused on the agricultural sector and food supply and featured written and verbal testimony from representatives of the National Corn Growers Association, National Chicken Council, National Council of Chain Restaurants, the Environmental Working Group, and Purdue University’s Department of Agricultural Economics.

In her written testimony, Pam Johnson, president of the NCGA, called the RFS a critical piece of our nation’s energy policy. “Since its enactment in 2005, it has created jobs, lessened our dependence on foreign oil and improved the environmental footprint of our nation’s transportation fuels,” she said, noting that in 2012 alone the RFS supported more than 300,000 jobs, displaced the equivalent of 465 million barrels of imported oil and lowered the price consumers paid at the pump by at least 89 cents per gallon.

Johnson also explained that while demand for corn has increased, over the past 30 years corn production has become much more efficient. Land use per bushel has decreased by 30 percent, and soil erosion has dropped by 67 percent on a per-bushel basis. In addition, per bushel irrigation has dropped by 53 percent, energy use by 43 percent and greenhouse gas (GHG) emission by 36 percent.

She also stressed that there is no credible evidence that the RFS has adversely impacted consumer food prices, and that the program has little direct impact on agricultural commodity prices. In addition, Johnson explained that the expansion of the ethanol industry has catalyzed substantial growth in the agricultural sector’s output, efficiency and value.

Responding to a question posed by a member of the committee, Johnson stressed that some of the problems that are currently being encountered with RFS implementation could have been avoided. “When the law was written in 2005 we knew that one of the goals was to increase the level of blending of renewable fuels,” she said. “Part of that problems is a willingness to make sure that those renewable fuels are available,” she continued, noting that it should not come as a surprise in 2013 that those fuels need to be blended.

Johnson also disputed claims that altering the RFS would solve short-term problems in the corn supply. “We’ve got a short-term problem, she said. “The drought did cause a lot of damage last year…The short-term answer to that short-term problem is we are looking at producing a very abundant corn crop for this year….We have to start looking at the long-term picture.”

William Roenigk advocated against the RFS on behalf of the National Chicken Council. In his written testimony he said that the statute that established the current RFS program has outlived its usefulness. He pointed to ethanol production as the cause of higher feed prices and financial hardship in the chicken industry. Roenigk also claimed that this organization is not anti-ethanol, but that market forces along should be allowed to move the U.S. toward greater energy independence.

Roenigk also questioned whether or not corn grown with commercial nitrogen fertilizer can be considered renewable, a statement that was strongly disputed by Rep. Lee Terry, R-Neb., during the hearing’s question and answer segment. “I’ve never heard that argument before, that if you use fertilizer it’s not renewable corn,” he said. “I can’t tell you how adamantly I oppose that position. I think it’s just silly, frankly.”

Rep. Bruce Braley, D-Iowa, also disputed claims made by Roenigk that ethanol drove up corn prices, which prevented farmers from switching to the production of other food crops, such as green beans, therefore making those food crops more expensive as well. Braley called the example a “false choice.” Iowa farmers grew corn in the state 150 years before there were any ethanol because soil conditions and climate are conducive to growing corn in Iowa, he said.

Ed Anderson, CEO of Wen-Gap LLC, delivered testimony on behalf of the NCCR. In his statement, Anderson advocated for the repeal of the RFS, claiming that it is costing his business up to $30,000 more per restaurant to run each year. “If Congress repealed the RFS, it would level the playing field and over time return normalcy to the food supply chain so everyone competes fairly and food becomes more affordable. Last year, ethanol industry proponents blamed the drought for high corn prices. This year, those same proponents are now blaming the oil companies,” he said.

In his testimony, Scott Faber, senior vice president for government affairs at the EWG, cited research claiming that the RFS—corn ethanol specifically—is actually increasing GHG emissions compared to oil. He did note that second-generation biofuels hold more promise for decreasing GHG emissions, but added that a market saturation of corn ethanol is blocking development of those fuels.

Finally, Chris Hunt, professor of agricultural economics at Purdue University, said that corn demand growth from the ethanol industry may be limited due to constraints associated with the blend wall. He said that leveling off of ethanol demand could play a part in moderating crop prices, which could increase margins for the animal sector. In addition, he specified that food inflation has already dropped below the core inflation rate this year. Hunt also addressed the development of cellulosic fuels in his testimony.

Additional information on the hearing, including written tesimony and video, can be accessed here