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April 29, 2013

Why the Renewable Fuels Standard Is a Good Thing

For more information on Newsline, contact: Kari Barbic, Media Specialist, American Farm Bureau Federation, karib@fb.org.

Question: would you rather be reliant on foreign countries for your fuel supply or our country’s own farmers and ranchers? The Renewable Fuels Standard helps the U.S. grow its own fuel and American Farm Bureau economist Matt Erickson says that’s something Congress needs to remember as it reviews the law. AFBF’s Johnna Miller has that story.
Miller:The House Energy and Commerce Committee is taking a long, hard look at the Renewable Fuels Standard. That’s the law that requires transportation fuel sold in the United States to contain an increasing amount of renewable fuel, like ethanol and biodiesel.
Erickson:I think on the horizon you could see some Renewable Fuels Standard reform discussions taking place. Overall Farm Bureau’s message to the House Energy and Commerce Committee is just to stay the course and continue these investments because they are becoming a reality and not just a science experiment.
Miller:American Farm Bureau economist Matt Erickson says the renewable fuels industry has come a long way thanks to the policy with plants coming online that produce fuel out of non-food crops, like woodchips. And many people don’t realize that you get livestock feed from ethanol production, too.
Erickson:For every bushel of corn – or 56 pounds - that we take to the ethanol plant, we can create two items. We can create about 2.8 gallons of ethanol but we can also create 17 to 18 pounds of dried distillers grains that livestock producers are using within their feed rations.
Miller:But many want to point the finger at ethanol for rising food prices. Erickson says, not so fast.
Erickson:It’s one small piece to a very large puzzle. Within every one dollar purchase of food about 11 cents goes to the farm and agribusiness share. 89 cents goes to the marketing, processing, energy, packaging, transport, trade, servicing, advertising, labor and anything else required to get that food onto your plate. So there are a lot of variables that need to be considered when we talk about food prices.
Miller:But Erickson says the bottom line is that the Renewable Fuels Standard is forward thinking and good for the country in the long run.
Erickson:The United States is very energy intensive. The Renewable Fuels Standard allows us to become energy independent from foreign sources that do supply the majority of the oil across the world. When you look at renewable fuels, it’s just that. It’s renewable. It can be grown year after year after year and having a farmer or rancher supply that energy source, it’s a great thing.
Miller:Johnna Miller, Washington.
Miller:Newsline is updated Mondays and Thursdays by 5pm Eastern. Thank you for listening.

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