On Wednesday House Agriculture Committee Vice-Chairman Bob Goodlatte, R-Va., and Representative Jim Costa, R-Calif., announced that they were bringing two pieces of legislation that would change the Renewable Fuels Standard.
The first bill, the Renewable Fuels Standard Elimination Act would quite simply end the RFS. Goodlatte says this would make ethanol compete in a free market and that the government should not be creating a market to sustain the industry.
"While I believe that we should completely eliminate the RFS I recognize that there may not yet be the political will in Congress to complete this mandate," Goodlatte said. "There may not be enough political will to eliminate the mandate, but we have to address the reality that we are being confronted with; tightening corn supplies and our livestock producers, our food producers and our consumers need relief now."
Therefore Goodlatte says he has joined with colleagues to introduce a bill to reform the RFS. The Renewable Fuels Standard Flexibility Act will link the amount of ethanol required for the Renewable Fuels Standard to the U.S. corn supply.
"This legislation would provide a mechanism that when the USDA reports that U.S. corn supplies are tight based on the ratio of corn stocks to expected use, there would be a corresponding reduction of corn ethanol made to the RFS," Goodlatte said. "For example, if this policy was in place now, the legislation would trigger a 25% reduction in the renewable fuels mandate."
Reaction to Goodlatte's announcement came quickly, some positive and some negative. The National Cattlemen's Beef Association stood with Goodlatte in support of the legislation. Kevin Kester, president of the California Cattlemen’s Association, an affiliate of NCBA, said this legislation will provide relief from tight corn supplies.
"Cattlemen are not opposed to ethanol and we're not looking for cheap corn. We simply want the federal government to get out of the marketplace and allow the market to work," Kester said during the news conference. "USDA has projected this year's corn crop will be more than 400 million bushels smaller than last year. Supplies are already tight due to drought, floods and rising demand, driven partially by the mandate. A smaller corn crop will put even further strain on corn stocks. We commend Congressmen Goodlatte and Costa for their leadership on this issue and we urge all members of Congress to support this bill."
Meanwhile the National Corn Growers Association voiced their opposition to the proposed legislation that was announced Wednesday. NCGA President Garry Niemeyer says this would put progress made by the ethanol industry in jeopardy, potentially costing jobs and economic opportunity throughout rural America.
Other organizations also spoke out against the legislation, saying that using arbitrary, predetermined thresholds for corn demand and supply ratios could lead to higher prices at the pump. Among the organizations throwing their weight against the legislation were the American Coalition for Ethanol, the American Farm Bureau Federation, Growth Energy, the National Corn Growers Association, the National Farmers Union, the National Sorghum Producers, and the Renewable Fuels Association.
"We need policy that continues to transition our economy away from imported fossil fuels and towards homegrown biofuels," NFU President Roger Johnson said. "American farmers have met, can and will continue to meet our domestic and international commitments for food and feed while still making a significant and growing contribution to lessening our dependence on imported oil."