Transcript Iowa Renewable Fuels Association

Renewable Fuels:
Ready for the Fight
Iowa Renewable Fuels Summit
January 30, 2013
The Drought of 2012
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Iowa’s Ethanol Industry
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41 operating ethanol plants with capacity of
3.7 billion gallons
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1.35 billion bushels of Iowa corn
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57% of Iowa’s 2.36 billion bushel 2011 corn crop
Converted to ethanol and high-protein animal feed
~30% of nation’s ethanol production
High Protein Livestock Feed
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Iowa’s Biodiesel Industry
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12 biodiesel plants with capacity of nearly
315 million gallons
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10 operated in 2012, producing 184 million
gallons
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Nearly 18% of US biodiesel production
Economic Impact of Renewable Fuels
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State of the Iowa Renewable Fuels Industry
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Ready to Fight!
Iowa RFS Coalition
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DuPont
Fagen, Inc.
GROWMARK, Inc.
Iowa Biodiesel Board
Iowa Biotechnology Association
Iowa Corn Growers Association
Iowa Farm Bureau Federation
Iowa-Nebraska Equipment Dealers Association
Iowa Renewable Fuels Association
Iowa Soybean Association
Monsanto
POET, LLC
Syngenta
Baseless Attack #1
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Renewable fuels raise food prices and starve
the world’s poor.
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Food AND Fuel Fun Fact
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More tons of distillers grains are produced each
year by US ethanol plants than tons of feed are
fed to every cow in every US feed lot.
Food AND Fuel Fun Fact
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US ethanol plants produce more tons of
nutritious animal feed than all US soybean crush
plants.
Food AND Fuel Fun Fact
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Food price inflation has been lower during the
RFS/ethanol era than in years prior.
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Average Annual US Food Price Inflation
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2005-present: 2.95 percent
1980-2004: 3.47 percent
Food AND Fuel Fun Fact
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Since the RFS was expanded in 2007, energy
price inflation has been THREE times the rate of
food price inflation
Food AND Fuel Fun Fact
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The 2012 Drought
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Inflation: October 2011 – October 2012
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Food: 1.7 percent
Energy: 4 percent
Food AND Fuel Fun Fact
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US ethanol producers use just 2.9% of the
global grain supply.
World Grain Uses
Ethanol
Other
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Food AND Fuel Fun Fact
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World farmers are responding to the higher grain
prices and production and rural incomes are up.
UN Food and Agriculture Organization
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“…investment in bioenergy could spark muchneeded investment in agricultural and transport
infrastructure in rural areas and, by creating jobs
and boosting household incomes, could alleviate
poverty and food insecurity.”
Baseless Attack #2
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All livestock producers hate the RFS.
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WHEREAS, the production of renewable fuels
and their co-products in the state of Iowa is
beneficial to the Iowa cattle industry.
THEREFORE, BE IT RESOLVED, the Iowa
Cattlemen’s Association support renewable fuels
production; and legislation that promotes growth
in renewable energy and supports initiatives that
maximize access to co-products for Iowa’s cattle
industry.
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Baseless Attack #3
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Renewable fuels/higher corn prices cause
farmers to rape the land and ruin the
environment.
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Iowa CRP Acres
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2000
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2011
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Ethanol Production: 440 million gallons
CRP Acres: 1.599 million
Ethanol Production: 3.7 billion gallons
CRP Acres: 1.664 million
Higher Farm Income Reinvested
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According to a survey of farmers invested
in ethanol plants, since 2005 farmers have
reinvested their higher income:
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63 percent purchased precision farming equipment
61 percent instituted conservation practices like strip
tilling or no tilling
71 percent installed environmental protections like
buffer strips or wetlands
“The oil and gas industry gets no subsidies, zero,
nothing…What we get are cost recovery
measures.”
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Oil Industry Specific Subsidies
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Percentage depletion allowance
Marginal oil well incentives
Enhanced oil recovery credits
Intangible Drilling Costs expensing
Deduction for tertiary injectants
Exception from passive loss limitations for oil
and gas
Oil and gas excess percentage over cost
depletion
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Western Capital Energy Development
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“The immediate deduction of the intangible
drilling costs is very significant, and by taking
this up front deduction, the risk capital is
effectively subsidized by the government by
reducing the participant's federal, and possibly
state income tax.”
Investopedia.com
“No other investment category in America
can compete with the smorgasbord of tax
breaks that are available to the oil and gas
industry.”
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Big Oil’s Century of Subsidies
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Federal Petroleum Mandate
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Federal Support for Fuels
Big Oil
Renewable Fuels
Permanent:
100 years
Temporary:
12 months
Federal Pipeline Loan
Guarantees
Yes
No
Fuel Distribution Monopoly
Yes
No
Federal Use Mandate
85%
10%
Master Limited Partnerships
Yes
No
Tax Subsidies
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RFS2 Volumes
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Advanced Biofuel: Unspecified
Advanced Biofuel: Biomass-Based Diesel
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Advanced Biofuel: Cellulosic Biofuel
Conventional Biofuel
Billion Gallons
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Linn Co-op Oil Company
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B10 and E15 in the Fuel Tax Debate
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Web-Site & Contact Information
www.IowaRFA.org
515-252-6249
[email protected]
5505 NW 88th Street
Johnston, IA USA
50131-2948
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Phone (515) 252-6249
Fax (515) 225-0781
E-mail [email protected]