Collin Peterson remembers the first ethanol boom in the 1970s. The Arab oil embargo and resulting long lines and high prices at the gas pumps prompted a number of entrepreneurs to jump into corn-based renewable fuels.
But when unexpected energy conservation measures by the U.S. public reduced the demand for oil, gasoline and ethanol prices plummeted and the plants were shuttered. Peterson has said ethanol producers in his state of Minnesota never recovered.
So you might understand why Peterson was visibly angry when EPA released its proposed rule for implementing the Renewable Fuels Standard earlier this month. The proposal includes calculations of greenhouse gas emissions for all fuels covered by the standard.
Peterson was still seething when he and Rep. Frank Lucas, the ranking member on the House Agriculture Committee Peterson chairs, introduced legislation aimed at correcting the “flawed provisions” in EPA's proposed rule.
“The unreasonable restrictions placed on the biofuels industry in the 2007 energy bill were never debated by Congress, and I've spent the past two years trying to undo the damage that we're seeing now that EPA has published its proposed regulations,” Peterson said.
Those comments were mild compared to his reaction when EPA released the rule May 5. Peterson claimed the EPA's plan for measuring the impact of biofuels on land use would “kill off” corn-based ethanol.
“You can't trust them. I no longer have any confidence in the EPA,” he said, adding that the proposal was prompting him to reconsider whether he would support any climate-change legislation the Congress might consider.
These last few months haven't been the best of times for renewable fuels. After gasoline rose above $4 a gallon as demand for energy grew in China and India in 2006 and 2007, ethanol manufacturers saw prices and margins drop as the economy faltered in 2008.
Lately, a rash of negative publicity generated by environmentalists, livestock producers and food manufacturers has caused even more heartburn. A vote by the California Air Resources Board to adopt a controversial Low Carbon Fuel Standard was another blow.
Both EPA and the CARB are basing their rules on what the Renewable Fuels Association has called flawed analyses regarding the carbon impact of producing ethanol and biodiesel feedstocks.
The EPA, for example, said certain methods of corn-based ethanol production don't meet requirements they emit 20 percent less greenhouse gas than gasoline. The average was 16 percent less, according to the EPA.
Peterson's legislation eliminates the requirement that EPA consider such indirect land use when calculating the greenhouse gas emissions, including the impact of clearing of Brazilian rainforest for increased soybean production.
Biodiesel producers, who were already struggling because of high vegetable oil prices, are furious over the EPA's findings that soy biodiesel produces 22 percent fewer greenhouse gas emissions than petroleum. The 2007 energy bill requires the figure be close to 50 percent less.
“It is inaccurate to call what EPA is using as science,” said the National Biodiesel Board's Joe Jobe, adding that without indirect emissions, soy diesel accounts for 80 percent fewer emissions than petroleum.
Jobe, officials with the Renewable Fuels Association and other alternate fuel advocates question why oil companies aren't being held to the same standards. That should include not only greenhouse gases, but all the political strife that has occurred to protect U.S. oil supplies in the Middle East, they say.
But that probably makes too much sense.