Reuters reported that President Joe Biden may lower biofuel blending mandates. (Creative Commons photo via Pxhere)
Gov. Kim Reynolds’ plan to boost the Iowa biofuels industry by setting new requirements appears to be running on fumes.
Reynolds’ proposed biofuels standards passed the Senate Transportation Committee on Wednesday, but not before lawmakers from both parties suggested the bill should not be debated on the Senate floor in its current form.
Agriculture groups lined up again to say the measure, now Senate File 481, would be a $500 million boost to one of Iowa’s centerpiece industries. Lobbyists from convenience stores repeated their view that the measure amounts to a mandate that will end up sending fuel sales to truck stops in surrounding states. Trucking groups also opposed the bill.
After Jan. 1, 2025, the bill generally would require retailers to sell E-15 or higher blends of ethanol. One pump could offer regular gas or lower ethanol blends.
Sen. Dan Zumbach, R-Ryan, who is managing the bill, said the issue is complicated.
“This bill is not ready for debate on the floor,” Zumbach said. “It needs a lot of the nearly 40 components of this bill to be moved around the board as such, to bring these folks together. It involves production agriculture, it involves the renewable fuels folks, it involves retailers and it involves the customers.”
Zumbach said he believes the bill can be amended to make it to the floor for debate, but it was unclear if that will be this session. “I don’t want to hide anything. I want to be transparent as can be. I think most of us know this bill is not ready for the floor, but I believe it can be and it will be,” he said.
Sen. Tony Bisignano, D-Des Moines, agreed that the bill needs work. But, he added: “I think we can resolve this.”
Iowa leads the nation in production of corn and ethanol.
The bill is designed to require higher blends of ethanol and biodiesel, which is made from soybeans. It would change the tax credit system to favor improvements that would allow upgrades of tanks and pipes at fuel outlets to allow that.
Reynolds aide Logan Shine said the changes would boost Iowa’s gross domestic product by more than $500 million.
The bill has locked several of the state’s most powerful lobbies in debate: agricultural groups, biofuels interests, and the trucking industry.
The Iowa Motor Truck Association and convenience stores formed the Fuel Choice Coalition to argue that the bill would reduce consumer’s choice. While Minnesota’s mandate reduced biodiesel demand, Iowa’s has risen with no mandate, they noted. They suggested the mandate would increase fuel costs for truckers.
Proponents, including the ag groups, said fuel costs should fall because higher blends of ethanol cost less at the pump.
Ethanol blends have less energy content than straight gasoline. According to the U.S. Department of Energy, a vehicle using 10% ethanol blend, the most common in Iowa now, will cover 3% to 4% fewer miles than it would with straight gasoline. Vehicles burning E-15, the blend at the center of Reynolds’ plan, would cover 4% to 5% fewer miles.
The U.S. Energy Information Administration notes that ethanol use can reduce pollution.
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