Minnesota May Lose $610 Million In 2014 Due To Proposed RFS Rollback

MINNEAPOLIS, Dec 30 - The Environmental Protection Agency's (EPA) proposed rollback of the Renewable Fuel Standard's (RFS) biofuel requirements for 2014 may lead to a $610 million shortfall to Minnesota's economy and a loss of 1,532 jobs next year.

Estimates by the Minnesota Department of Agriculture indicate that the EPA's proposal, which calls for lowering the RFS' statutory levels for ethanol-based biofuels in 2014, will lower ethanol production and in turn have an adverse impact on the economy in Minnesota.

In light of these developments, the Minnesota Bio-Fuels Association (MBA) recently launched a campaign that provides Minnesotans with a platform to communicate their opposition to the EPA's proposal. The campaign is available on www.mnbiofuels.org and directs comments from the public to the EPA, White House as well as the state's senate and congressional representatives in Washington, D.C.

"It takes just a minute to send a message to the EPA and Washington to stick to the original statutory levels stipulated by the RFS. Biofuels have boosted our economy, reduced our consumption of foreign oil, produced fewer greenhouse gas emissions than gasoline and saved consumers money at the pump," said Tim Rudnicki, executive director at the MBA.

The EPA has stated that all comments regarding its proposed 2014 RFS requirements must be received by Jan 28, 2014.

The RFS, which was implemented in 2005 and expanded in 2007, had set the production and consumption volume for ethanol-based biofuels in 2014 at 14.4 billion gallons. However, the EPA has proposed to reduce that level by 10 percent to 13.01 billion gallons.

In fact, the EPA's proposed level for 2014 is even lower than the volume for 2013, which is 13.8 billion gallons.

Moreover, Rudnicki said rolling back the RFS requirements means consumers could stand to lose out on potential savings at the pump in 2014.

Under the RFS, the availability of cheaper fuels with higher blends of ethanol such as E15 (which contains 15% ethanol) were expected to increase in tandem with the rise in ethanol production and consumption.

E15, which was recently introduced in Minnesota at select gas stations, is on average 10 to 15 cents cheaper than regular gasoline. The EPA has stated that E15 can be used in all light duty vehicles manufactured from 2001 onwards.

However, the supply and availability of E15 and other higher ethanol-blended-fuels will be limited should the EPA scale back on ethanol production in 2014.

"What's most puzzling under the EPA's proposal is that the biofuels volume for 2014 is even lower than 2013. Producers in Minnesota will have to scale back on production, which in turn will lead to adverse consequences to the economy," Rudnicki said.

There are 21 ethanol producers in Minnesota.

Should the EPA reduce ethanol consumption in 2014, the Minnesota Department of Agriculture expects the state's economic contribution from the biofuel industry, which averages $5 billion annually, to drop $610 million in 2014 as well as an expected loss of 1,532 jobs.

In addition, Minnesota is expected to lose $101 million next year in value-added processing such as production of distillers dried grains, which are used as high protein livestock feed.

Ethanol production is expected to fall 110 million gallons to 970 million gallons next year while Minnesota's annual corn use for ethanol would be reduced by 49 million bushels.

Minnesota is the fourth largest ethanol producer in the country. There are ethanol plants located in Atwater, Benson, Bingham Lake, Buffalo Lake, Claremont, Fairmont, Fergus Falls, Glenville, Granite Falls, Heron Lake, Janesville, Lake Crystal, Lamberton, Little Falls, Luverne, Marshall, Morris, Preston, Welcome, Winnebago and Winthrop.