Good morning and welcome to today's "Hearing in the Heartland" to discuss the Renewable Fuel Standard, otherwise known as RFS.
My name is Kim Reynolds and I'm proud to serve as Iowa's Lieutenant Governor. First, let me begin my official remarks by welcoming you to Des Moines.
Midwesterners are passionate about the RFS. From our farm fields to our Main Streets to our Legislative Chambers, Iowans understand how important it is to maintain a strong RFS.
That's why we were deeply committed to organizing this "Hearing in the Heartland" that gives Iowans and other Midwestern citizens an opportunity to directly engage on this important policy discussion.
As many of you know, there are tremendous benefits that currently flow from the RFS, including:
Diversifying our nation's energy portfolio and reducing our reliance on overseas oil.
Giving consumers lower cost choices at the fuel pump.
And, raising family incomes and driving growth in rural America.
Today, we must stand together and let the policy makers in Washington, D.C. hear our collective voices.
Today, we must firmly tell them that taking a step backward on the RFS is unacceptable.
We should be continually moving forward to grow the production and use of ethanol, biodiesel and cellulosic biofuels.
Today, we must share the facts and address the misperceptions related to the RFS.
We cannot afford to have misunderstandings or muddled policies when it comes to the RFS. As citizens, who have seen first-hand the positive impacts that the RFS has had in Rural America, we believe we have an obligation to help educate others.
We need to let people know that the ethanol industry supports more than 38,000 jobs and the biodiesel industry supports 62,000 jobs.
We need to let people know that this one proposed rule by the EPA would directly jeopardize an estimated 37,400 ethanol jobs and 7,500 biodiesel industry jobs.
That one purposed rule would place an unnecessary hardship on families throughout rural America.
These are important jobs that cannot be lost and we must continue to fight for them.
Iowans know since Governor Branstad and I were sworn into office, our focus has been on revitalizing our economy, creating good jobs and growing family incomes. When we came into office, unemployment was at 6.1 percent. Unemployment is now at 4.4% and we are proud of the careers that have been established through record employment.
We have worked hard to recruit companies to locate or expand in Iowa. We've seen more than $7.5 billion dollars in private investment.
Many of these projects are directly tied to Iowa's leadership in renewable fuels and agriculture, such as CJ Bio America which is co-locating at the Cargill facility in Ft. Dodge, and the Valent Bio Science Facility in Osage.
What's so exciting to me is that these investments are happening across Iowa , in counties, both large and small, urban and rural.
The EPA's proposal could have a very negative impact on families and communities throughout the United States. Here are just a few examples:
Farmers and individuals involved in agricultural production and the biofuels industry could take a direct hit on family incomes.
Consumers who prefer to choose lower cost biofuels over petroleum-based products will not be able to stretch family incomes.
Today, regular gasoline in Des Moines is selling for $3.29 per gallon. E10 is selling 30 cents cheaper at $2.99. And E-85 is selling for $2.85.
Communities from North Dakota to Nebraska, and from Iowa to Indiana have experienced growth and revitalization thanks, in part, to a thriving agricultural sector.
That's why we believe future growth would be jeopardized by the current EPA proposal.
So, let's talk about a few of those communities.
In Southeast Iowa, there is an ethanol facility in West Burlington that can annually produce 110 million gallons of fuel and currently employs 46 individuals.
In Emmetsburg and Nevada there are 2 cellulosic ethanol plants that will soon begin production. These plants will be key innovators in the biofuels industry and key employers in their communities.
Algona has a biodiesel facility that can produce up to 60M gallons of fuel each year and provides good-paying jobs for 37 Iowans.
These are real people, real plants and real communities who are counting on us to keep rural America strong.
That's why our goal today is to provide you with an opportunity to amplify the voices of these workers, their families and their communities.
To ensure that they will not be negatively impacted by the EPA proposal.
This Forum also will provide individuals and organizations with updated information so that the EPA can make their decision and refine their proposal.
If you haven't done so yet, I encourage all interested citizens across the Midwest to submit official comments to the EPA before the January 28th deadline to ensure your voice is heard in Washington, D.C.
Today, you will hear from a variety of interested citizens about the importance of the RFS. From farmers and agriculture producers to employees at renewable fuel production facilities, there will be a series of 30-minute panels throughout the day.
I am looking forward to joining the other senior leaders in hosting those discussions.
We are extremely pleased with the bipartisan engagement on this issue throughout the Midwest.
Today, we are joined by key agricultural leaders from the Midwest, including five secretaries of agriculture.
We also are pleased that Lieutenant Governor Sue Ellspermann from Indiana is here to actively participate in this important hearing.
Thank you again for your participation today .
And, please give a warm welcome to the hardest-working Governor in the United States, who has been a steadfast supporter of Iowa renewable fuels from the very beginning, Governor Terry Branstad.
The following are Gov. Branstad's remarks, as prepared for delivery:
Good morning and thank you for that kind, introduction, Lt. Governor Reynolds.
As you can see, I've truly met my match in terms of energy, enthusiasm and passion to serve the people of Iowa in our Lt. Governor.
It's an honor to host today's "Hearing in the Heartland" to discuss the Renewable Fuel Standard and gather your comments on the EPA proposal that would lower the volume obligations.
Many of you traveled from across the Midwest to join us for this policy discussion in the beautiful World Food Prize Borlaug Hall of Laureates.
Let me begin by thanking the elected officials who joined us today:
From Iowa, we have:
Lt. Governor Kim Reynolds
Sec. of Agriculture Bill Northey
Congressman Steve King
Also joining us later today will be:
Congressman Tom Latham,
Senator Chuck Grassley,
Iowa Economic Development Authority Director Debi Durham,
Iowa Department of Transportation Director Paul Trombinio and
Iowa Department of Natural Resources Director Chuck Gipp.
I also appreciate the leadership of Lt. Governor Ellspermann [Els -- Per -- Men] from Indiana and the agriculture secretaries from:
South Dakota who are with us today.
I've been a relentless supporter of biofuels dating back to the 1970s, when we called it "gas-a-hol".
It's truly incredible to see how the industry has grown and provided diverse benefits to agriculture and created thousands of quality jobs across America.
With a state that has over 92,000 farmers, dozens of thriving international agri-business companies, and a large variety of bio-science leaders, it's easy to see that the growth is a result of the hard work and innovation of our farmers and the technology advancements in the use of corn, soybeans and other biomass products.
There are many benefits that flow from the Renewable Fuel Standard and the use of biofuels, including:
Diversifying our nation's energy portfolio and reducing our dependence on foreign oil.
Reducing air pollution.
Giving consumers choices at the pump.
And helping grow family incomes in rural America.
In fact, biofuels have enabled value-add opportunities for a variety of biostocks including corn, soybeans, woody biomass, and even corn stalks. And, renewable fuels have created high-paying jobs and rewarding careers in rural America.
The EPA's proposal on the RFS would have devastating effects on this growth and on job creation.
Since the EPA proposal was released, there has been a strong bi-partisan opposition from Midwest leaders
I was one of several Midwesterners who traveled to Arlington, Virginia, to testify at the EPA's only hearing on the RFS proposal. I also met with EPA Administrator Gina McCarthy and reaffirmed the negative impacts the administration's proposed rule would have on job creation, agriculture and rural America.
A bi-partisan group of governors joined me in sending a letter encouraging the EPA not to reduce the RFS.
The Iowa Legislature unanimously passed resolutions encouraging the EPA to reverse course and reaffirm support for a robust Renewable Fuel Standard.
We also hosted a rally at the LincolnWay Ethanol Facility in Nevada with over 300 Iowans -- and leaders from other states have also hosted events at facilities in their communities.
Minnesota Sen. Amy Klobuchar shared with me that she and Minnesota Agriculture Commissioner Dave Fredrickson toured Minnesota's ethanol plants and heard strong opposition to the EPA's proposal.
These efforts show the tremendous importance of the RFS on our nation's agriculture and biofuels industries -- and how the EPA proposal would have a damaging effect on jobs and farm income.
The proposed rule by the EPA would have a direct impact on the 41 Iowa ethanol plants, 13 Iowa biodiesel plants and the scores of facilities across the Midwest.
It is estimated that this single EPA proposal would cost nearly 45,000 jobs nationally. That's thousands of families who would face undue financial hardship and stress.
In 2012, during the drought, corn prices were $8 a bushel, but now they are actually close to $4 a bushel.
The EPA's proposed rule would result in corn prices below the cost of production and a reduction in agriculture land values. In addition, the misguided proposal would hurt farm equipment dealers, manufacturers and would cause significant loss of jobs throughout rural America.
I was Governor of Iowa during the Farm Crisis of the 1980s, a time which brought incredible hardship to farm families and rural communities. I will never, ever, forget the challenges endured during those times -- and the last thing that we ever want to see again in our nation is another Farm Crisis.
The EPA has been a strong supporter of efforts to bolster renewable fuels from the beginning.
I see no reason why the EPA should not continue to support the Renewable Fuel Standard, which has been instrumental in reducing dependence on foreign oil, lowering air pollution and increasing farm incomes.
The federal government passed the 1990 Clean Air Act which required the use of oxygenated fuel in certain areas of the U.S. Iowa and other Midwestern states embraced ethanol as the best additive to enhance octane and oxygenate fuels.
Unfortunately, Big Oil convinced many areas of the country, especially on the East and West Coast to use a product called MTBE, which they controlled. It became evident after a number of years that MTBE was creating massive groundwater pollution and it was banned from use.
At that time, oil companies said that ethanol could not replace the use of MTBE -- they were wrong.
Since MTBE was banned and the RFS adopted, the use of ethanol has been increasing steadily for years.
Big Oil is delighted that the EPA has recommended weakening the Renewable Fuel Standard. But their real goal is to repeal the Renewable Fuel Standard.
They're wrong again.
It's time the EPA use common-sense and reverse its ill-advised proposed rule that weakens the Renewable Fuel Standard.
Critics claim that the RFS has driven more acres into production and increased fertilizer demand. However, the truth is quite the contrary.
Fertilizer use has significantly declined in recent decades thanks to improved technology and precision in farming, and
Total cropland planted to corn in the US in the 1930's was 103 million acres and in 2013 it was 97 million acres.
The use of co-products, such as DDGs are also important to livestock production. Big Oil and its allies refuse to acknowledge this quality, high-protein byproduct goes directly into the food chain.
In fact, a modern ethanol refinery produces 17.5 pounds of highly valuable DDGs from one bushel of corn. This has helped increase cattle feeding in Iowa.
I believe Big Oil is wrong about the use of higher blends of ethanol, just as we've proven time after time over the years. The RFS has helped our nation make steady progress since 2005 and our dependency on foreign oil has dropped from 60% to 40%, but the EPA proposal would reverse that progress.
E15, E85 and Blender Pumps can all be part of achieving the important growth envisioned by the RFS.
In Iowa, we recently launched a new program called Fueling Our Future. This program, through the use of CMAQ funding from the US Department of Transportation, provides financial incentives for retailers to install blender pumps with higher blends of biofuels at their stations.
E-30 appears to be the sweet spot for the greatest fuel efficiency.
Retailers in Iowa know the importance of biofuels to our state and have installed several blender pumps, which result in lower cost ethanol blended fuels to consumers. In some cases in Iowa, E85 can be anywhere from fifty cents to a dollar cheaper per gallon than regular gasoline. When consumers have the choice, like they do in Iowa, they choose ethanol and other biofuels. The oil companies are preventing fuel choice in other parts of the country and consumers lose, paying much more for fuel.
Since the EPA proposal was first released, there have been encouraging studies and data provided that I believe gives the EPA an opportunity to reverse their approach on this proposal. Including:
Data that shows that there is more capacity to integrate biofuels into our nation's fuel supply, and Data that shows that RIN activity did not affect prices at the pump.
Today we will have a chance to hear from farmers, business leaders, consumers who embrace choices at the pump, and elected officials who support the benefits of biofuels.
The EPA's decision will affect their lives and their futures. I know it will have a big impact on Iowa and other states in our region.
I urge President Obama, Administrator McCarthy and the EPA to listen to the people of Iowa and the Midwest, and continue to support a robust and strong Renewable Fuel Standard -- as they have in the past.
Thank you all for participating in today's forum and we look forward to hearing your comments throughout the day.