California Ag TODAY: Possible Help for California's Dairy and Poultry Industry

Editor’s Note: TODAY’s news may be a good start to stop growing corn for fuel instead of food. When this stops, it will help the dairy and poultry industries in Calif. We support this Act.

Senators Dianne Feinstein (D-Calif.), Tom Coburn (R-Okla.) and eight cosponsors today introduced the Corn Ethanol Mandate Elimination Act of 2013. The bill eliminates the corn ethanol mandate within the Renewable Fuel Standard (RFS), which requires annual increases in the amount of renewable fuel that must be blended into the total volume of gasoline refined and consumed in the United States.

Cosponsors of the bill are Richard Burr (R-N.C.), Susan Collins (R-Maine), Bob Corker, (R-Tenn.), Kay Hagan (D-N.C.), Jeff Flake (R-Ariz.), Joe Manchin (D-W.Va.), Jim Risch (R-Idaho) and Patrick Toomey (R-Pa.).

Senator Feinstein said: “I am pleased to join Senator Coburn and others on a bill to eliminate the federal corn ethanol mandate from the Renewable Fuel Standard, while maintaining provisions designed to grow the low-carbon biofuel industry.

“Under the corn ethanol mandate in the RFS, roughly 44 percent of U.S. corn is diverted from food to fuel, pushing up the cost of food and animal feed and damaging the environment. Oil companies are also unable to blend more corn ethanol into gasoline without causing problems for automobiles, boats and other vehicles.

“I strongly support requiring a shift to low-carbon advanced biofuel, including biodiesel, cellulosic ethanol and other revolutionary fuels. But a corn ethanol mandate is simply bad policy,” noted Fienstein.

Senator Coburn said: “The time to end the corn ethanol mandate has arrived. This misguided policy has cost taxpayers billions of dollars, increased fuel prices and made our food more expensive.

Eliminating this mandate will let market forces, rather than political and parochial forces, determine how to diversify fuel supplies in an ever-changing marketplace. I’m grateful my colleagues on both sides on the aisle are prepared to take this long-overdue step to protect consumers and taxpayers from artificially high fuel and food prices.”

The Renewable Fuel Standard, first enacted in 2005, requires refiners and blenders to use 16.55 billion gallons of renewable fuel in 2013. More than 13 billion gallons of this total will be met by the use of corn ethanol, a level that will increase in subsequent years.

There are two key problems with continuing to mandate the consumption of more and more corn ethanol each year:

· Corn consumption: Approximately 44 percent of U.S. corn crop is used to produce ethanol, artificially inflating food and feed prices while damaging the environment.

· Blend wall: As gasoline consumption declines, refiners face a “blend wall” when the RFS mandate exceeds the limit at which ethanol can be blended into the fuel supply, determined to be 10 percent of total gasoline consumption.

The Corn Ethanol Mandate Elimination Act of 2013 solves both problems by removing the top-line mandate for renewable fuels, while leaving mandates for non-corn ethanol advanced biofuels untouched.

This action eliminates the unnecessary pressure on corn prices, allowing the multi-billion dollar corn ethanol industry to compete directly with oil based on price and quality, not mandates.

The reduction of total RFS-mandated volumes would also eliminate the threat of the blend wall.

Refiners will continue to blend corn ethanol into the fuel supply in the absence of a mandate, as ethanol is the preferred octane booster used to increase the efficiency of gasoline. Even without a mandate for its use, the economic benefits of mixing ethanol into gasoline would remain.