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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

Conflicting Submissions to EPA by RFA and NCC

05/06/2019

Predictably, the Renewable Fuels Association (RFA) has submitted comments to the Environmental Protection Agency (EPA) to support a waiver to allow E-15 to be used throughout the year. Currently, a 1-psi Reid Vapor Pressure waiver applies to E-10 during summer months.

Comments opposing the waiver were submitted to the EPA by the National Chicken Council (NCC). The president of the association representing broiler producers, Mike Brown stated “As corn users, our industry faces potential impact by changes in biofuels policies such as modifying the volatility requirements for E-15 fuel blends during the summer season”. Brown emphasized the potential effect of higher corn usage on availability and price which should be considered in addition to the environmental effects.

The NCC submission quoted Section 211(o)7(a) of the Clean Air Act which requires the Secretaries of Agriculture and Energy in consultation with the Administrator of the EPA to consider petitions by one or more states to grant a waiver. Historically petitions referred to as the “off ramp” were denied in 2008 and 2012.

The NCC has proposed a new standard to be considered in granting waivers relating to availability of corn. It is evident that in a drought year or in the event of unseasonable wet weather producing acreage planted to corn consistent with an El Nino event, stocks-to-use-ratio would be affected. The NCC proposed that waivers should be based on the June stocks-to-use-ratio as published in the World Agricultural Supply and Demand Estimate report. Waivers would be disallowed when the ratio exceeds 10 percent and applying a sliding scale would take effect at the 25 percent level with a 5 to 6 percent stocks-to-use-ratio.

For a number of years, the volumes of ethanol to be produced from corn under the Renewable Fuels Standard have been lower than requirement based on optimistically inaccurate projections of future fuel requirement. This has required the renewable fuels industry to export excess ethanol which at the present time is constrained by market factors and tariffs imposed by China.

The ethanol industry is operating at low or negative profitability as evidenced by the recent quarterly report of the Archer-Daniels-Midland company. Less-efficient ethanol plants have been mothballed and the industry is understandably applying spurious environmental considerations to force government support.

When the biofuels industry was initiated, the U.S. was dependent on foreign oil creating vulnerability. Over the past two decades, the U.S. has achieved energy independence, but the livestock industry and other users of corn are forced to subsidize both growers and refiners.

CHICK-NEWS has consistently maintained that the need for biofuels represents a diversion of food to gasoline and is an indirect tax on all who drive or eat. If the NCC is looking for an “off-ramp” it should in fact be a gradual reduction in the so called renewable fuel standard allowing market factors to determine the availability and price of corn.

In centuries to come, archaeologists will ponder the remnants of excavated metal tanks and piping and wonder what cult worshipped these installations.


 
Copyright 2019 Simon M. Shane