[Congressional Record Volume 161, Number 8 (Friday, January 16, 2015)]
[Senate]
[Pages S235-S236]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  CORN ETHANOL MANDATE ELIMINATION ACT

  Mrs. FEINSTEIN. Mr. President, I wish to submit an amendment with my 
colleagues, Senators Toomey and Flake to correct a major problem with 
the current Renewable Fuel Standard: the mandate for corn ethanol. We 
see two major problems with continuing to mandate the consumption of so 
much corn ethanol each year. The statute currently mandates more corn 
ethanol than can be used by the current vehicle fleet and gas stations. 
Roughly 40 percent of the U.S. corn crop is now used to produce 
ethanol, artificially pushing up food and feed prices while damaging 
the environment. This amendment offers a simple fix that addresses both 
problems: elimination of the corn ethanol mandate.
  Also, the amendment leaves in place the requirement that oil 
companies purchase and use low-carbon advanced biofuels, including 
cellulosic ethanol and biodiesel. This allows the program to focus on 
the fuels that best address climate change and do not compete with the 
food supply.
  Let me highlight a few of the unintended consequences of the corn 
ethanol mandate. The policy has led us to use roughly 40 percent of the 
U.S. corn crop not for food but for fuel, nearly twice the rate in 
2006. Using more and more corn for ethanol--in drought years as well as 
years with bumper crops--places unnecessary pressure on the price of 
corn.
  The Congressional Budget Office estimated in June 2014 that 
escalating the volume of corn ethanol as currently required by statute 
would raise the average price of corn about 6 percent by 2017. That 
would increase food expenditures by $3.5 billion per year by 2017, the 
equivalent of about $10 per person, which most directly affects 
families living on the margin.
  Internationally, according to Tufts University researchers, the corn 
ethanol mandate has cost net corn importing countries $11.6 billion in 
higher corn prices, with more than half that cost, $6.6 billion, borne 
by developing countries. Higher corn prices also raise prices 
throughout the food supply chain by raising the cost of animal feed. 
For the turkey industry alone, the Renewable Fuel Standard raised feed 
expenses by $1.9 billion in 2013, according to the President of the 
National Turkey Federation. For the restaurant industry, a recent 
Price-Waterhouse-Coopers study projects that the corn ethanol mandate 
would increase costs by up to $3.2 billion a year. For the milk 
industry, the Western United Dairyman reported in 2013 that a 
combination of high feed costs and low milk prices put 105 dairies out 
of business in one year alone.
  The corn ethanol mandate also has unintended environmental 
consequences. In 2013, an investigative report from the Associated 
Press found using government satellite data that 1.2 million acres of 
virgin land in Nebraska and the Dakotas alone were

[[Page S236]]

converted to fields of corn and soybeans since 2006. Putting virgin 
land under cultivation has environmental consequences, including 
greater runoff, greater use of fertilizer, and less land available for 
conservation.
  Another consequence of the corn ethanol mandate is that it places a 
regulatory requirement on oil refiners that cannot actually be 
satisfied--it requires more ethanol than the auto fleet and existing 
gas stations can accommodate, a concept called the blend wall. Under 
the RFS, oil refineries are required to blend 15 billion gallons of 
corn ethanol into the fuel supply in 2015. This far exceeds the roughly 
13.5 billion gallons that our current infrastructure can accommodate. 
According to the Environmental Protection Agency's final 2013 rule, the 
``EPA does not currently foresee a scenario in which the market could 
consume enough ethanol to meet the volumes stated in the statute.'' The 
Congressional Budget Office confirmed this judgment in its June 2014 
report, saying that the statutory goal of escalating corn ethanol 
volumes would be ``very hard to meet in future years.''
  Chevron, which operates oil refineries in my home State, is also 
concerned that the statutory mandate requires too much ethanol. It is 
Chevron's judgment that ``the required volume of renewable fuel exceeds 
the amount that can be safely blended into transportation fuels used by 
consumers.'' Facing this difficulty, the EPA has been unable to 
finalize the volume requirements for 2014 or 2015. This leaves the 
businesses seeking to develop advanced biofuel ventures without any 
certain prospects to guide their investments and undermines the primary 
purpose of the Renewable Fuel Standard.
  The Corn Ethanol Mandate Elimination Act would address the blend wall 
directly, thereby allowing EPA to continue increasing volumes of low 
carbon advanced biofuel.
  The corn industry, by contrast, does not depend on the RFS for its 
livelihood. In fact, the Congressional Budget Office predicts that 
refiners will continue to blend corn ethanol into the fuel supply in 
the absence of a mandate, because ethanol is the oil refiner's 
preferred octane booster and oxygenate.
  Ultimately, I believe that this bill would better serve the advanced 
biofuel industry by removing the blend wall as an obstacle to the 
industry's expansion, and providing the regulatory certainty that they 
need to guide their investments. These advanced biofuels have none of 
the same problems as corn ethanol. They do not compete directly with 
food, and they reduce greenhouse gas emissions by at least 50 percent 
compared to petroleum.
  I am also fundamentally committed to the vitally important public 
health and climate 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. The bill's language 
explicitly clarifies that the legislation has no effect on the low-
carbon advanced biofuel provisions in the Renewable Fuel Standard, and 
I would oppose any bill that would amend, revise or weaken the advanced 
biofuel provisions or other public health protections provided by the 
Clean Air Act.
  The elimination of the corn ethanol mandate is a smart, simple reform 
with support from the prepared food industry, the dairy, beef, and 
poultry industries, the oil and gas industries, hunger relief 
organizations, and environmental groups.
  The bill solves the problems of the Renewable Fuel Standard while 
maintaining the provisions that encourage the development, growth, and 
deployment of cellulosic ethanol, algae-based fuel, biodiesel, and 
other low-carbon advanced biofuels.
  I urge my colleagues to support this legislation.

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