April 08, 2020

Duckworth, Durbin, Grassley, Ernst Call on USDA to Allocate Funds to Biofuel Industry During COVID-19 Pandemic

 

[WASHINGTON, D.C.] – U.S. Senators Tammy Duckworth (D-IL) and Dick Durbin (D-IL) joined Chuck Grassley (R-IA), Joni Ernst (R-IA) and 11 of their Senate colleagues this week in sending a bipartisan letter requesting additional funds be allocated to the biofuel industry during the unprecedented economic circumstances brought on by the COVID-19 pandemic. The members called on U.S. Department of Agriculture (USDA) Secretary Sonny Perdue to allocate these funds through the USDA’s Commodity Credit Corporation, which was provided an additional $14 billion to help stabilize, support and protect farm income and prices through the Coronavirus Aid, Relief, and Economic Stabilization (CARES) Act.

“As the country follows the advice of local and state governments and remain at home, motor fuel use has rapidly decreased,” the Senators wrote. “We have seen a significant drop in the price of corn and soybeans because of the decline in demand. Keeping plants open is vital for our states and we ask that you use the authority given by Congress to assist the biofuel industry during extremely difficult times. We are supportive of the proposals the biofuel industry has put forward to reimburse feedstocks and also believe that adding additional CCC funds to the Higher-Blends Infrastructure Incentive Program will drive future biofuel demand.”

Duckworth, Durbin, Grassley and Ernst were joined in sending the letter by Senators Tammy Baldwin (D-WI), Roy Blunt (R-MO), Sherrod Brown (D-OH), Deb Fischer (R-NE), Josh Hawley (R-MO), Amy Klobuchar (D-MN), Jerry Moran, (R-KS), Mike Rounds (R-SD), Ben Sasse (R-NE), Tina Smith (D-MN) and Jon Thune (R-SD).

A full copy of the letter is available below and online here.

Dear Secretary Perdue,

We are concerned about our nation’s biofuel sector during the unprecedented economic circumstances brought on by the national pandemic of COVID-19.

As the country follows the advice of local and state governments and remain at home, motor fuel use has rapidly decreased. This dynamic comes on top of EPA’s failure to implement the RFS in accordance with the law, including the issuance of illegal small refinery waivers and the recent failure to enforce ethanol blending requirements. As the consumption of motor fuel continues to decrease in response to COVID-19, it is important to note that most U.S. gasoline contains at least 10 percent ethanol.

We are concerned for the many farmers and producers who will bear the impact of this decrease in consumption, further damaging an already hurting rural economy and resulting in the closing of production facilities that employ many people in rural communities in our home states.

As the U.S. Department of Agriculture (USDA) considers the allocation of additional funds provided to the Commodity Credit Corporation (CCC) by the Coronavirus Aid, Relief, and Economic Stabilization (CARES) Act we ask that you use the authority provided to assist the biofuel industry.

The decrease in fuel consumption has left production facilities little choice but to idle production or close completely. Since March 1, industry sources show more than four billion gallons of ethanol production has ceased production. The CCC was created to stabilize, support, and protect farm income and prices while also maintaining balanced and adequate supplies of agricultural commodities and aids in their orderly distribution.

Farm income and prices for corn and other crop commodities are directly linked to the health of the renewable fuel industry. Ethanol plants use 40 percent of all corn grown in the United States. Among other feedstocks, biodiesel and renewable diesel producers currently use over 8 billion pounds of soybean oil a year, creating demand that adds 13 percent to the cash price of a bushel of soybeans. We have seen a significant drop in the price of corn and soybeans because of the decline in demand. Keeping plants open is vital for our states and we ask that you use the authority given by Congress to assist the biofuel industry during extremely difficult times. We are supportive of the proposals the biofuel industry has put forward to reimburse feedstocks and also believe that adding additional CCC funds to the Higher-Blends Infrastructure Incentive Program will drive future biofuel demand.

Thank you for considering our request and for your dedication to rural America. We look forward to working with you on deploying the additional resources that Congress gave you in the CARES Act.

Sincerely,