Iowa governor, state biodiesel board sound alarm to EPA on RFS

Several Iowa business leaders, farmers and the governor have made a compelling case for expanding biodiesel under the federal renewable fuel standard (RFS) at an EPA hearing currently underway. 

Biodiesel, made from a diverse mix of resources such as recycled cooking oil, soybean oil and animal fats, is the first EPA-designated advanced biofuel to reach commercial-scale production nationwide. Yet in its recent RFS draft, the EPA proposed reducing biodiesel production to 1.28 billion gallons, a drastic reduction from the industry’s annualized production rate of about 2 billion gallons since July.

“I’m proud to say that our members are shining examples of what this policy was intended to create,” said Randy Olson, executive director of the Iowa Biodiesel Board, in his testimony this morning. “I’m here to ask that you reconsider the proposed rule for biomass-based diesel and advanced biofuels for 2014. Quite simply, the 1.28 billion gallon biomass-based diesel target as proposed will likely mean a reduction in biodiesel volumes for 2014 versus this year’s production, and, importantly, signal to a growing industry that the hurdles to compete with entrenched petroleum interests are even higher than we previously thought.”  

Jeff Johannesmyer, president and general manager of Western Iowa Energy in Wall Lake, Iowa, talked about the economic benefits of his plant to the area. The multifeedstock plant processes agricultural byproducts and coproducts from four major soybean crushing facilities, five pork processing facilities and three beef packing plants in his immediate area. It also utilizes corn oil extraction from ethanol plants in the area.

“In a town of 850 people, our plant provides 30 well-paying jobs, and supports over 100 indirect jobs,” Johannesmyer said. “Our community needs it. Also, based on clear policy signals from the administration, since 2011 Western Iowa Energy has invested over $2 million to upgrade infrastructure and increase our process efficiency.”

IBB members Renewable Energy Group and Western Dubuque Biodiesel are also among the nearly two dozen biodiesel companies scheduled to testify. 

Governor Terry Branstad, the only governor to testify, received a round of applause after strong testimony voicing his concerns with the proposed volume requirements, noting Iowa would be one of the hardest hit states if the EPA “caves in” to “Big Oil.” He said the proposal would “…result in an unbelievably negative ripple effect all through rural America,” at a time when Congress has also failed to pass a Farm Bill. “The last thing we want to do is to again trigger this nation going into another farm crisis.” He urged the EPA and the administration to continue strongly supporting federal policies that promote renewable fuels, “as you have in the past.”

Iowa’s 10 operating biodiesel facilities have a capacity of nearly 350 million gallons a year, with almost 5,000 jobs supported by biodiesel throughout the value chain. 

“Biodiesel is here and now, and this industry that didn’t exist, but showed incredible promise 10 years ago, is now at risk of taking a terrible step backwards with your proposed rule,” Olson testified. “Please see the biodiesel industry for what it is doing today, and what it can do for us all in the future, and don’t harm its potential by cutting our production in half next year. I urge you to establish a volume requirement at least consistent with this year’s projected production of 1.7 billion gallons.”  

The hearing began at 9:00 a.m. Eastern and continues well into the night. The public can listen to live testimony by calling the conference line: (877) 396-8104 (toll-free) and dialing the Entrance code: 298 346 87#.

The Iowa Biodiesel Board is a state trade association representing the biodiesel industry.