[Congressional Record Volume 159, Number 175 (Wednesday, December 11, 2013)]
[Senate]
[Pages S8773-S8774]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Mrs. FEINSTEIN (for herself, Mr. Coburn, Mrs. Hagan, Ms.
Collins, Mr. Toomey, Mr. Flake, Mr. Corker, Mr. Burr, Mr.
Risch, and Mr. Manchin):
S. 1807. A bill to amend the Clean Air Act to eliminate the corn
ethanol mandate for renewable fuel, and for other purposes; to the
Committee on Environment and Public Works.
Mrs. FEINSTEIN. Mr. President, I rise to introduce The Corn Ethanol
Mandate Elimination Act of 2013, a bill cosponsored by my distinguished
colleagues: Senators Tom Coburn, Kay Hagan, Susan Collins, Patrick
Toomey, Jeff Flake, Bob Corker, Richard Burr, James Risch, and Joe
Manchin.
This legislation would eliminate the Federal corn ethanol mandate
from the Renewable Fuel Standard, RFS, while leaving the requirement
that oil companies purchase and use low-carbon ``advanced biofuel'' in
place.
Let me briefly explain why this legislation is necessary.
The Renewable Fuel Standard, a statute enacted in 2007, requires oil
companies to use 16.55 billion gallons of renewable fuel in 2013. This
annual requirement increases to 36 billion gallons in 2022.
Every year, the law directs that an increasing portion of this
mandate be met using low-carbon ``advanced biofuel'' that is not
derived from corn starch and lowers lifecycle greenhouse gas emissions
by at least 50 percent. I strongly support this provision to lower the
carbon emissions from our fuel supply.
However, 14.4 billion gallons in 2014, and 15 billion gallons each
year after, of the RFS mandate established in statute is met using corn
ethanol, which amounts to a corn ethanol mandate.
There are two major problems with continuing to mandate the
consumption of more and more corn ethanol in the United States each
year.
First and foremost, the policy has led us to divert 44 percent of the
U.S. corn crop from food to fuel, about twice the rate in 2006.
As the Associated Press laid out in a recent detailed investigation,
the use of corn for ethanol is artificially pushing up food and feed
prices while damaging the environment. The investigation found
conservation lands are disappearing.
Before Congress enacted the corn ethanol mandate, the U.S. Department
of Agriculture Conservation Reserve Program grew every year for nearly
a decade. But in the first year after the corn ethanol mandate, more
than 2 million acres were removed. Since Obama took office, 5 million
more acres have been repurposed.
The AP also found that farmers have broken ground on virgin land,
which it described as ``the untouched terrain that represents, from an
environmental standpoint, the country's most important asset.''
Using government satellite data, the AP estimates that 1.2 million
acres of virgin land in Nebraska and the Dakotas alone have been
converted to fields of corn and soybeans since 2006.
Since 2005, the AP calculates that corn farmers increased their use
of nitrogen fertilizer by more than two billion pounds.
The nitrates from this fertilizer wash into our rivers and flow to
the Gulf of Mexico, where they feed algae. When the algae die, the
decomposition consumes oxygen, leaving behind a ``dead zone.''
This year, the AP reports the dead zone covered 5,800 square miles of
sea floor, about the size of Connecticut.
Using more and more corn for ethanol, in drought years as well as
years with bumper crops, has had economic consequences as well as
environmental effects.
Higher feed prices have cost our beef, poultry, restaurant, and dairy
industries dearly.
According to recent testimony in the House of Representatives, from
October 2006 to July 2013, poultry and egg producers have had to bear
the burden of higher feed costs totaling over $50 billion.
Joel Brandenberger, the President of the National Turkey Federation,
estimates that the RFS cost the turkey industry $1.9 billion in
increased feed expenses last year.
According to a recent Price-Waterhouse-Coopers study, the federal
mandate on corn-based ethanol substantially raised prices and costs
throughout the food supply chain. If the RFS mandate were left
unchanged, it would increase chain restaurant industry costs by up to
$3.2 billion a year.
But the damage has probably been greatest in California, where
dairymen are drowning under a combination of low milk prices and high
feed costs.
The milk producers' group Western United Dairymen reports that more
than 400 dairies have gone out of business in the past 5 years,
including 105 in the past year alone.
``California's remaining 1,500 dairies are fighting for survival,''
the group said in a recent statement.
The bottom line is increased feed prices associated with corn ethanol
have bent this industry to its breaking point.
But the corn ethanol mandate in the Renewable Fuel Standard also
presents an additional problem.
As Corporate Average Fuel Economy, CAFE, Standards required by the
Ten in Ten Fuel Economy Act drive down gasoline consumption, oil
companies face a ``blend wall'' as 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.
This blend wall is about 13.4 billion gallons of ethanol--well below
the 2014 corn ethanol statutory mandate of 14.4 billion gallons.
According to EPA: ``EPA does not currently foresee a scenario in
which the market could consume enough ethanol . . . to meet the volumes
. . . stated in the statute.'' This situation is likely to increase
gasoline prices.
While EPA has proposed using a creative statutory interpretation to
reduce the RFS volumes in 2014, unfortunately EPA's proposal would
reduce the advanced biofuel side of the RFS mandate by more than 41
percent, while it proposes to reduce the corn ethanol portion of the
mandate by only 10 percent.
The Corn Ethanol Mandate Elimination Act would address the blend wall
directly, thereby allowing EPA to continue increasing volumes of low
carbon advanced biofuel.
This legislation would eliminate the corn ethanol mandate, but it's
important to point out it would by no means eliminate the corn ethanol
industry. Refiners will continue to blend com ethanol into the fuel
supply in the absence of a mandate for two reasons.
First, ethanol is the preferred octane booster used to increase the
efficiency of gasoline.
Second, the wholesale price of ethanol is currently 65 cents per
gallon less than the wholesale price of unblended gasoline, meaning
blenders lower their costs and increase profits when they add ethanol
to gasoline.
[[Page S8774]]
The multi-billion dollar corn ethanol industry will compete directly
with oil based on price without a mandate, and the economic benefits of
mixing corn ethanol into gasoline would remain.
I am aware that the advanced biofuel industry is working to scale and
commercialize their technologies, and their investors seek regulatory
and economic certainty during this period.
I am also fundamentally committed to the vitally important public
health protections provided by the Clean Air Act.
That is why I would like to make it crystal clear that this
legislation is a narrow bill repealing the corn ethanol mandate.
Senator Coburn and I jointly made this clear when we agreed to the
following statement:
``We are opposed to a mandate on the use of corn ethanol and plan to
introduce the Corn Ethanol Mandate Elimination Act to repeal this
unwise policy. The bill's language will explicitly clarify that the
legislation has no effect on the low-carbon advanced biofuel provisions
in the Renewable Fuel Standard, and we are both committed to opposing
any amendment to the bill that would broaden its scope to amend, revise
or weaken the advanced biofuel provisions or other public health
protections provided by the Clean Air Act.
If provisions threatening public health were successfully added to
the Corn Ethanol Mandate Elimination Act, we would no longer support
the bill.
I also understand that some in the advanced biofuel industry argue
that legislative changes to the corn ethanol portion of the Renewable
Fuel Standard could reduce certainty for their industry.
Respectfully, I disagree. The current law is not providing this
industry with the certainty it needs.
While EPA has some flexibility under the RFS statute to adjust RFS
mandated volumes, most of that flexibility rests in EPA's power to
reduce the amount of ``advanced biofuel'' mandated under the RFS.
EPA's ability to reduce the corn ethanol mandate under current law
and current circumstances is far from clear. Its proposal to reduce the
corn ethanol mandate in its recently released draft rule for 2014 will
be subject to aggressive legal challenge.
EPA's lack of discretion has led EPA to propose a rule drastically
reducing volumes for advanced biofuels, including biodiesel, by 41
percent, while it proposes only a modest 10 percent reduction in corn
ethanol volumes.
Unless The Corn Ethanol Mandate Elimination Act is enacted, EPA will
likely carry forward its proposal to dramatically reduce ``advanced
biofuel'' volumes in order to address the blend wall. We believe
eliminating the corn ethanol mandate is a much more responsible
alternative.
This legislation has strong support from the prepared food industry,
dairy, beef, poultry, oil and gas, engine manufacturers, boaters,
hunger relief organizations and environmental groups. I would like to
list all the organizations that have expressed support for this bill:
ActionAid USA; American Bakers Association; American Frozen Food
Institute; American Fuel & Petrochemical Manufacturers; American Meat
Institute; American Sportfishing Association; Americans for Prosperity;
BoatU.S.; California Dairies, Inc.; California Dairy Campaign;
California Poultry Federation; Clean Air Task Force; Competitive
Enterprise Institute; Dairy Producers of New Mexico; Dairy Producers of
Utah; Environmental Working Group; Freedom Action; Georgia Poultry
Federation; Grocery Manufacturers Association; Idaho Dairymen's
Association; Indiana State Poultry Association; International
Snowmobile Manufacturers Association; Iowa Turkey Federation; Marine
Retailers Association of the Americas; Michigan Allied Poultry
Industries, Inc.; Milk Producers Council; Minnesota Turkey Growers
Association; National Cattlemen's Beef Association; National Chicken
Council; National Council of Chain Restaurants; National Marine
Manufacturers Association; National Restaurant Association; National
Taxpayers Union; National Turkey Federation; Nevada State Dairy
Commission; North American Meat Association; North Carolina Poultry
Federation; Northwest Dairy Association; Oregon Dairy Farmers
Association; Oxfam; South Carolina Poultry Federation; South East Dairy
Farmers Association; Southeast Milk Inc.; Specialty Equipment Market
Association; Taxpayers for Common Sense; Texas Poultry Federation; The
Poultry Federation; Virginia Poultry Federation; Washington State Dairy
Federation; Western United Dairymen; and the Wisconsin Poultry & Egg
Industries Association.
The Corn Ethanol Mandate Elimination Act of 2013 would fix both of
the problems with the current Renewable Fuel Standard.
First, it would eliminate the unnecessary pressure on corn prices and
corn production, allowing the multi-billion dollar corn ethanol
industry to compete directly with oil based on price, not mandates.
Second, it reduces RFS mandated volumes below the blend wall.
The bill addresses both problems while maintaining the RFS provisions
that encourage the development, deployment and growth of cellulosic
ethanol, algae-based fuel, green diesel, and other low carbon advanced
biofuels, maintaining a market for the innovative, nascent, domestic
industry that this statute was designed to build up.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 1807
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Corn Ethanol Mandate
Elimination Act of 2013''.
SEC. 2. ELIMINATION OF CORN ETHANOL MANDATE FOR RENEWABLE
FUEL.
(a) Removal of Table.--Section 211(o)(2)(B)(i) of the Clean
Air Act (42 U.S.C. 7545(o)(2)(B)(i)) is amended by striking
subclause (I).
(b) Conforming Amendments.--Section 211(o)(2)(B) of the
Clean Air Act (42 U.S.C. 7545(o)(2)(B)) is amended--
(1) in clause (i)--
(A) by redesignating subclauses (II) through (IV) as
subclauses (I) through (III), respectively;
(B) in subclause (I) (as so redesignated), by striking ``of
the volume of renewable fuel required under subclause (I),'';
and
(C) in subclauses (II) and (III) (as so redesignated), by
striking ``subclause (II)'' each place it appears and
inserting ``subclause (I)''; and
(2) in clause (v), by striking ``clause (i)(IV)'' and
inserting ``clause (i)(III)''.
(c) Administration.--Nothing in this section or the
amendments made by this section affects the volumes of
advanced biofuel, cellulosic biofuel, or biomass-based diesel
that are required under section 211(o) of the Clean Air Act
(42 U.S.C. 7545(o)).
(d) Regulations.--Not later than 180 days after the date of
enactment of this Act, the Administrator of the Environmental
Protection Agency shall promulgate such regulations as are
necessary to carry out the amendments made by this section.
(e) Effective Date.--The amendments made by this section
shall take effect on the date that is 180 days after the date
of enactment of this Act.
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