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Jack Gerard's and other groups' remarks at press conference call on EPA's 2014 RFS proposal

Opening script for RFS press call, as prepared for delivery
Friday, November 15, 2013

Jack Gerard, President and CEO, American Petroleum Institute

“We’ve organized this joint press call with a variety of other groups that are concerned about the problems with the RFS, to demonstrate the broad impacts on our economy and consumers from the higher ethanol levels mandated by EPA.

“For the first time, EPA has acknowledged that the blend wall is a dangerous reality and must be addressed to avoid serious impacts on America’s fuel supply and harm to American consumers.

“While the agency took a step in the right direction, more must be done to ensure Americans have the choice of fuels they want and we are continuing our call for Congress to act now.

“Ultimately, Congress must protect consumers from this outdated and unworkable program once and for all.”

  • Left untouched, the mandate could cause severe fuel rationing, drive up the cost of diesel by 300 percent and the cost of gasoline by 30 percent by 2015, and lead to a $770 billion decrease in U.S. GDP and a $580 billion decrease in take-home pay for American workers, according to a study by NERA economic consulting.

Former U.S. Sen. Wayne Allard, Vice President for Government Relations, American Motorcyclist Association
CONTACT: Pete terHorst | | 503-567-9677

“The AMA is a consumer group that has been adversely impacted by higher blends of ethanol in gasoline. We’re glad to see that the EPA is taking this action today, though this is not a long-term solution for motorcyclists who worry that the use of E15 fuel could damage their engines and void their warranties.

“The American Motorcyclist Association remains committed to it’s members—and all motorcyclists—as we continue to support legislation that prohibits E15 fuel. The bottom line is that this decision certainly slows the unnecessary rush on bringing E15 fuels to market for at least the next year, but it doesn’t address the central issue that real-world motorcyclists face, and that is that no motorcycle currently on the road is approved for E15 use, and the risk of inadvertent mis-fueling is tremendous once it is available at the pump.

“Access to safe fuels for motorcycles remains an AMA priority, and we continue to be a watchdog for our members on this issue.”

Joel Brandenberger, President and CEO, National Turkey Federation
CONTACT: Keith Williams | | 202 -603 -1988

“We appreciate EPA and the administration lowering the RFS volume levels for the coming year. But for a permanent fix to the problem, you need to appreciate how corn prices hit hard and recede slowly:

“Our members are not yet feeding this crop year’s corn at the reduced prices; they’re still feeding corn from the 2012 harvest – corn they bought at high prices. Those high costs forced cutbacks (2 to 5% for the turkey industry) across all poultry and livestock.

“That reduces the total supply of protein available, and ripples through the poultry and livestock business for years or more. The price of corn doesn’t drop one day and food prices drop the next. Ethanol supporters know the solution is not that simple. The only way to avoid these cycles is for Congress to enact long-term RFS reform.”

Mike Brown, President, National Chicken Council
CONTACT: Tom Super | | 202-443-4130

“EPA’s announcement today is a good and welcome first step, but ultimately, Congress must act.
Congressional action to repeal the RFS remains the most viable pathway to allowing all users of corn to have equal standing in the marketplace.

“As corn comprises nearly 70 percent of the feed given to chickens, our single largest input cost, rising prices directly affect farmers’ and consumers’ bottom lines. Since the RFS was aggressively escalated in 2007, average annual feed costs have skyrocketed by $8.8 billion for poultry producers.

“Last year, the average U.S. family of four faced a $2,000 increase in food costs due to higher corn prices brought on largely by the RFS. We know all too well from last year that corn crop projections and inventories can be erased from Mother Nature’s wrath.

Mark Dopp, Senior Vice President of Regulatory Affairs and General Counsel, American Meat Institute
CONTACT: Eric Mittenthal | |202-587-4238

“The EPA decision to reduce the corn ethanol mandate is long overdue. While this is a positive action, the fact remains the RFS is a flawed policy that requires Congressional action. Even with a record corn crop expected this year, the damaging ripple effect of this defective policy has been moving through the meat and poultry complex for the past several years. The time for Congressional action is now.”

• Monthly Retail beef prices set successive new records in July and August. August retail Choice beef prices reached $5.39 per pound, and All-fresh beef reached $4.97. (Source: USDA Sept. Livestock Outlook)
• Food costs have outpaced other staple items (1.2%) during the past year, climbing 1.4% according to the consumer price index released October 30. However, meat prices – which include beef, pork, poultry, and eggs – rose 2.9% since September 2012. (Source: BLS Sept. CPI Report)
• December Corn prices this week (Nov. 4th) have been hovering between $4.20 – $4.29 (down nearly $4 from Nov. 2012).
• Ethanol production is expected to absorb nearly 4.7 billion bushels in the 2012-2013 marketing year.
• Ethanol use accounted for approximately 14 percent of total corn use in 2005-2006, and that percentage is projected to be more than 43 percent of US production in 2012-2013.
• While ethanol proponents argue that distillers grains or DDGs are an effective feed byproduct of corn that has been used for ethanol, it is inaccurate to consider DDGs as a one-for-one substitute for corn. While DDGs can be used as feed, livestock and poultry can only consume them at varying levels that are much lower than corn consumption. In addition, their nutrition value can fluctuate and is not equal to a kernel of corn.

Rob Green, Executive Director, National Council of Chain Restaurants
CONTACT: Stephen Schatz | | (202) 626.8119

“The Environmental Protection Agency’s adjustment to the Renewable Fuel Standard volume mandate is an implicit recognition that the ethanol mandate is out of sync and out of touch with current market realities.

The Renewable Fuel Standard has wrought havoc on food retailers, chain restaurants, franchisees and operators, as well as food producers, and suppliers. However, the ultimate losers are consumers. Study after study has shown that the corn ethanol mandate has artificially driven up commodity costs by billions of dollars annually, and with it, consumer prices.

“The EPA announcement does nothing to alleviate the economic distortions the corn ethanol mandate has inflicted on commodity and food costs paid by America’s small businesses and consumers. The EPA, in effect, is hamstrung by current law.

“Today’s announcement by the EPA reaffirms our steadfast belief that Congress needs to repeal the RFS mandate once and for all. The time has come to end the federal government’s failed experiment with the RFS and the corn ethanol mandate.”

John McKnight, Vice President of Government Relations, National Marine Manufacturers Association
CONTACT: Lauren Dunn | | 202-737-9752

“NMMA commends the EPA for announcing today that the 2014 Renewable Volume Obligations will be lowered. We appreciate the clear step that EPA has taken to not only acknowledge the unattainable mandates included in the Renewable Fuel Standard but to also leave room for consumers, manufacturers and industries including the recreational boating community, that rely on the continued availability of low-ethanol fuel blends.

“Understanding the need to explore other energy sources, NMMA and the recreational boating industry remain committed to exploring alternative biofuels and have invested in preliminary tests on isobutanol, a biofuel that is also derived from corn. And while today’s announcement marks an important step, there is more to be done. We have serious, well-documented and data-driven concerns with the safety of high ethanol fuel blends which have been proven to cause damage to marine engines.

“This damage puts consumers at risk and hurts manufacturers during a time of important economic recovery. The RFS is a broken law which sets unrealistic fuel mandates and requires a long term fix from Congress. NMMA strongly encourages Congress to address the issues of the RFS directly through legislation in order to protect consumers and US manufacturers.