Renewable fuels on the line
Iowa’s new ag secretary listens to concerns
Farmers and agriculture leaders from Webster County met with the state’s new agriculture secretary Friday afternoon to discuss a Texas senator’s plan to alter the Renewable Fuels Standard, which they say would cripple the state’s ethanol industry.
Iowa Secretary of Agriculture Mike Naig met with about 15 farm and economic leaders at the Iowa Central Community College campus Friday to discuss the proposal that U.S. Sen. Ted Cruz, R-Texas, has come up with.
Speaking via telephone, Bill Horan, a retired farmer from Knierim who is active with the Iowa Renewable Fuels Association and the Iowa Corn Growers Association, summarized what’s been happening.
Horan said Cruz’s proposal would put a cap on the price of renewal identification numbers, or RINs.
Horan went on to say that the oil industry is against renewable fuels.
“Their opposition is to put this cap on the price of the RIN, which means that if RINs are artificially held at a low price, then blenders will just buy RINs instead of buying ethanol,” Horan said. “Well, if that happens, then the ethanol demand will go down dramatically, and ethanol companies will slow down production of ethanol because they’re not selling it.”
This, Horan said, will mean that those in opposition to renewable fuels can come back and say the Renewable Fuel Standard isn’t working, which, he added, would lead to corn and soybean prices going down.
Naig, who just became state agriculture secretary on Monday following the confirmation of Bill Northey to a position in the United States Department of Agriculture, said now is the time for farmers to let President Donald Trump know of the impact this would have on the agriculture industry.
“I think it’s critically important that we send a clear message to the administration on where we are on this,” he said. “To once again remind them of promises made and that we expect those promises to be kept. The president has been clear, many times, about stating his support for the RFS.”
As recently as Tuesday night, Naig said, Sonny Perdue, the federal secretary of agriculture, had said that both he and Trump supported RFS, “and we could put that in the bank,” according to Naig.
“If RFS goes away, you don’t have to study economics to know what that does to our rural communities and our economy,” Naig said. “It’s a critically important piece here.”
He added that the goal of RFS is to create domestic energy.
“This is a good thing,” he said. “Cleaner, burning fuel. Better for our air. This is a good thing. It’s about jobs in our communities. Those are three things that are critically important.”
Dennis Plautz, chief executive officer of the Greater Fort Dodge Growth Alliance, provided some statistics on the economic impact of the biofuels industry on Fort Dodge and Webster County.
He also highlighted Iowa’s Crossroads of Global Innovation, the ag park just west of town that features CJ Bio America, Cargill and Valero Renewables.
“They’ve got over 600 jobs out there, counting embedded employees,” Plautz said, adding that there has been about $935 million in capital investments over the past few years.
Naig said the RFS not only impacts Iowa, but the entire Midwest as well.
Horan said there will be a meeting at the White House on Monday to figure out how to work out the issues between the oil and renewable fuels industries.
“We need to get our brethren in these other states up to speed and on board and phone calls into the White House, phone calls into Sen. (Joni) Ernst, Sen. (Charles) Grassley,” Horan said. “Sen. Grassley is rock solid for us and it was obvious from the minute I went there into the White House that the president really, really respects both of our senators’ opinions. He constantly asks them their opinions and if they thought that would work and if they thought that was the solution.”
Mark Thompson, a farmer from Badger, said the ethanol industry was basically started because farmers needed to get rid of surplus corn, and this offered them a way to do that.
“This is a tremendous blessing we’ve been able to utilize,” he said.
Jay Lynch, a farmer from Humboldt County, agreed, saying because of the ethanol industry, there are more trucks on the road delivering corn, when it used to be a few trains that would transport them.
“There are some major economic impacts when you add it all together,” Lynch said. “From a farmer’s perspective, we can’t afford to lose. Especially right now.”