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Senators seek USDA aid for biofuel producers

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GAS PRICE IMPACT: In recent weeks, E10 has sold for 35-50 cents per gallon less than gasoline with no ethanol as ethanol industry asks for support to for industry still recovering from pandemic.
Biden administration asked for support in seeing renewable fuels as part of the clean energy plan.

It’s been months since Secretary of Agriculture Tom Vilsack promised the COVID assistance for biofuel producers was coming. Now a group of Republican senators want answers for the delay.

On June 15, 2021, the USDA announced $700 million in aid to biofuel producers as part of the USDA Pandemic Assistance for Producers initiative. In USDA’s press release, the agency indicated that this assistance would be implemented within 60 days.

“We are concerned about the delay in financial assistance for our nation’s biofuel sector during the unprecedented economic circumstances brought on by the COVID-19 pandemic. … It is simply unacceptable that it has been over 120 days since your announcement and biofuel producers are still waiting. …It is past time our hardworking biofuel producers receive the critical aid that you promised,” write the senators.

The letter explains the pandemic continues to negatively affect biofuel producers. “As feedstocks have experienced historic highs, margins to produce biofuel have risen, and many plants remain offline or are operating at reduced rates,” the senators explain.

The Renewable Fuels Association thanked the senators for reaching out to USDA on long-overdue COVID relief for ethanol producers.

“We are glad Sec. Vilsack has made biofuels a priority for COVID-19 relief after the previous administration continually overlooked the need for emergency relief in the biofuels space. And now, we are glad these senators are looking for answers on why this aid continues to be delayed,” says Ken Colombini, RFA communications director.

Sen. Chuck Grassley, R-Iowa, signed onto the letter and also spoke on the Senate floor Monday to again remind President Joe Biden of the need to support biofuel production.

“President Biden has called on the OPEC cartel to drill for additional crude oil and discussed potentially opening up our domestic Strategic Petroleum Reserve. With rising energy prices, it is common sense to promote additional development of energy. But with the Biden administration’s sole focus seemingly being on climate change, I would think more attention would be paid to promoting clean energy,” Grassley says.

“Enhancing energy security while lowering emissions was the exact reason why Congress created the Renewable Fuel Standard. The Midwest has the potential to provide a solution to the multi-faceted problems that this Administration faces,” Grassley says. “Instead, President Biden and his White House continue to turn to big oil companies to solve the energy crisis.”

RFA noted in a tweet that oil prices hit a seven-year high on Oct. 18, as OPEC continues to “play games with the U.S. economy.”

Recent rumors in the press are saying that the administration is considering gutting the RFS with massive cuts to required volume obligations. Grassley notes this is strange considering President Biden campaigned on supporting the RFS. In Iowa, President Biden said, “The RFS marks our bond with our farmers and our commitment to a thriving rural economy.”

“Increased drilling for crude oil and increasing our dependence on OPEC is not a solution to higher prices at the pumps,” Grassley says. “Americans need immediate relief, and it is past time for the Administration to look to the heartland for the answer.”

The Renewable Fuels Association reminded President Biden in a letter that efforts to encourage more use of high-carbon fossil fuels, including imported oil, to stem higher gasoline prices are “clearly antithetical to your administration’s objectives regarding clean energy development, climate change resilience, domestic job creation, and energy security.”

“Instead of pursuing actions that will lead to increased crude oil production, we again urge your administration to pursue a real and immediate solution to higher pump prices—increased production and use of low-carbon renewable fuels like ethanol,” says RFA President and CEO Geoff Cooper in a letter sent to the President Oct. 13. “Using more domestically produced ethanol would not only result in lower fuel prices for consumers, but it would also support your goals related to clean energy, climate change, and jobs.”

Additional senators besides Grassley who signed the letter to Vilsack include Sens. Joni Ernst, R-Iowa, Jerry Moran, R-Kan., Deb Fisher, R-Neb., Michael Rounds, R-S.D., Roger Marshall, R-Kan., Ben Sasse, R-Neb., and John Thune, R-S.D.

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