The EPA is proposing to reduce the Renewable Fuel Standard from 14.4 billion gallons to 13 billion gallons.
It’s a drop that Governor Terry Branstad fears could have major consequences for Iowa.
“This industry provides good paying jobs for people in community all across the state,” said Branstad.
At the Lincolnway Energy plant in Nevada, Branstad, joined by fellow Republicans Senator Charles Grassley and Congressman Steve King, spoke about the impact of the proposal.
Their fear is that less demand for ethanol will drive down corn prices taking money out of the pockets of Iowa farmers.
Continued growth of the renewable fuel industry could also be in jeopardy.
The state currently has more than 50 ethanol and biodiesel plants and produces two billion gallons of corn based ethanol each year.
“Iowans depend on agriculture and renewable fuels,” said Branstad.
According to Bruce Babcock, an economics professor at Iowa State University, the EPA scaled back its proposal based on reduced demand for gasoline nationwide.
“The 13 billion gallons is how much ethanol can be easily used in the gasoline supply,” said Babcock.
While unpopular with many Iowans, Babcock says the EPA’s proposal is likely popular in states that produce the most petroleum and livestock.
“You think about Texas and maybe North Dakota,” said Babcock.
Here in Iowa, corn is king.
The fight to keep it as a viable fuel source is on. “This is a war on corn. Our own EPA has started a war on corn,” Branstad claimed.
Leaders from both sides have expressed support for the Renewable Fuel Standard.
Senator Tom Harkin’s statement is below.
“Up until now, the Renewable Fuel Standard has support development of a strong, domestic bio-refinery industry. I will work with my colleagues to increase the EPA’s recently announced biofuels targets and thus reaffirm the purpose of this renewable fuel standard.”