The Senate Must Act Fast

  • Wednesday, 27 May 2020 15:19

ED Column Web

When the US Senate returns from its one-week Memorial Day break, it will begin discussions for a fifth coronavirus relief bill.

With unemployment at record highs and the economy contracting at unseen rates, there is little time for discussions. Relief is needed now and this time around, the Senate should follow the lead of its colleagues in the House and include the ethanol industry in any aid package.

More than 130 ethanol plants across the nation have partially or fully shutdown operations as a result of the COVID-19 pandemic which has led to a plunge in fuel demand. In Minnesota, the traffic volume in the Twin Cities metro area was 67.1 percent below a baseline for 2016-2019. 

Since then, as the state economy has slowly reopened, the traffic volume has increased. But as of May 20, it was still 15.5 percent lower than the baseline. As such, the ethanol industry in Minnesota is still in serious distress, putting in jeopardy the 18,000 jobs it supports. 

The Senate does not need to look too hard to find a way to help the ethanol industry. 

Two of its members, Sen. Chuck Grassley and Sen. Amy Klobuchar, introduced the Renewable Fuel Feedstock Reimbursement Act last week. 

Advocates for the ethanol industry like MN Biofuels have in the past month suggested to both Sen. Klobuchar and Sen. Tina Smith that cash payments for bushels of corn processed by an ethanol plant during a specific timeframe would help keep them financially viable for a few months. 

This bill does that. 

Under the act, the USDA will use the Commodity Credit Corporation to reimburse ethanol producers 75 percent of the price of feedstock purchases made from Jan 1, 2020 to March 31, 2020. 

The Senate could also take a page out of the HEROES Act that was recently passed by Congress. 

The HEROES Act includes the Renewable Fuel Reimbursement Program which would require the USDA to make payments to renewable fuel or advanced biofuel producers that experienced unexpected market losses due to the pandemic. 

The program will pay ethanol producers 45 cents per gallon of ethanol produced from Jan 1, 2020 to May 1, 2020. Minnesota’s Rep. Collin Peterson and Rep. Angie Craig were both instrumental in including aid for the ethanol industry in the HEROES Act. 

The ethanol industry, and to a larger extent the agriculture industry, cannot wait for the Senate to drag its feet during the deliberations for the upcoming relief package. 

Both the Renewable Fuel Feedstock Reimbursement Act and the Renewable Fuel Reimbursement Program would significantly help the ethanol industry. Either one would provide the industry with a much-needed shot in the arm. 

Members of the Senate who like talking about homegrown industries and American jobs should act fast to save America’s ethanol industry. 

Unlike those senators, the industry doesn’t have the luxury of taking a one-week Memorial Day break.