For the past 30 years, the RFA has worked hard to foster good relations with every Administration that has come along, regardless of party. The Obama Administration is no different.
The RFA was honored that Deputy Assistant to the President for Energy and Climate Change Policy Heather Zichal chose to address RFA members at the association’s Annual Membership Meeting this week in Washington. Zichal made some key points that relate directly to the issues the ethanol industry is addressing in the very immediate future.
Specifically, Zichal underscored the Administration’s commitment to current policies that are effective in expanding this critical industry and the need to recognize that the White House and the industry share the same vision. Speaking in reference to the tax incentive for ethanol use, Zichal said:
“The message I want to bring to you today is that we want to and look forward to engaging with the industry and the Hill as we look at options for reform. We want to make sure that it’s guided by a recognition that the existing program does work – we’re certainly not looking to upend a program that works, as occasionally happens in Washington. We want to make sure that we are all on the same page as we move forward and have these discussions.”
Zichal also expressed appreciation for the thoughtful participation of the RFA and its members in constructively seeking to solutions to issues currently before the industry. “We certainly welcome RFA’s willingness to advance new ideas about how to tackle these policies,” Zichal said. “The administration has had a strong partnership with RFA and we certainly look forward to continuing that.”
Zichal’s entire remarks can be read below.
Thank you very much for that kind introduction and thank you so much for the opportunity to be here today.
As Bob said, I’m originally from the Midwest. I grew up in a small town in rural Iowa. And when I left for Washington, D.C., I knew I wanted to work on energy policy issues. I was on the hill for a number of years, through two presidential campaigns, and now, of course the White House.
Through all that time and in my years of work, I found that it always circles back – from the beltway to the heartland – not only to my home state of Iowa, but to the entire American Midwest and rural communities.
And I think that’s a really incredibly powerful testament to the important and growing role that rural America has in addressing our nation’s energy challenges. In their efforts to increase the national supply of homegrown renewable fuels, American farmers are leading a charge to break our dependence on foreign oil, catalyze greater economic vitality in rural communities, and reduce greenhouse emissions. In short, you understand better than most that our energy policies have profound and long-term implications for our economy, our national security, and our environment.
This administration has made that very same argument time and time again. And at every step of the way for the better part of the past two years, we have said that we need to change the way we do business when it comes to how we produce and consume energy. That has been a top priority for President Obama from the very beginning.
Less than a month after taking office, the President signed the Recovery Act, which included $90 billion for investments in clean energy. We invested across the board – in renewables, including biofuels, but also to build a bigger, smarter electrical grid, to invest in clean coal and a whole host of clean energy technologies. Because of those investments we are on a path to double our clean energy generation in just a few years.
We also proposed tough new fuel-economy standards and the first greenhouse gas emissions standards for cars and light trucks, standards which will save 1.8 billion barrels of oil over the life of the program. Now, we are engaging the truck industry to work on the first ever fuel-economy standards for heavy-duty trucks.
And to show that the federal government can lead by example, we are cutting energy consumption and boosting energy efficiency. Under an executive order that the President signed last fall, the federal government, which is the largest consumer of energy in the U.S. economy, will reduce greenhouse gas emissions 28 percent by 2020.
Already, we are starting to see the federal agencies radically rethink their approach to energy. A number of you in this room probably know that last October, Secretary of the Navy Ray Mabus issued an order requiring that by 2020, half of the energy the Navy uses come from alternative sources. The department is already taking the first steps – this spring, they successfully conducted a supersonic flight of an F/A-18 jet fighter known as the “Green Hornet” on a biofuel blend.
All of these steps – the historic investments in energy under the Recovery Act, the tough efficiency standards for cars and trucks, and the Executive Order on Federal Sustainability – represent real progress in our efforts to build a new clean energy economy. But they also only mark the beginning of the process. Much more work remains to be done.
Moving forward, as part of our comprehensive strategy on energy, the administration will continue to be an advocate for a robust biofuels policy. I mentioned earlier that I’m from Iowa, but I always like to remind people that before President Obama was the President, he came from Illinois. So he’s no stranger to biofuels. And now, like then, the President understands the tremendous potential of this industry, not only from an energy perspective, but from an economic and environmental perspective as well.
Just to underscore this administration’s commitment to the biofuels industry, I want to mention that the Recovery Act included $800 million in funding for ethanol fueling infrastructure, biorefinery construction, and advanced biofuels research. These investments were designed to help us reach the President’s ambitious goal of tripling America’s biofuel production by 2022. This plan calls for, and I know you all know this well, 36 billion gallons of biofuels in just 12 years.
Achieving this goal will be challenging. If we are going to meet this target, we will need to harness the innovation of our nation’s farmers, entrepreneurs, premier universities, and R&D facilities in the private sector, and many of you in this room. The President also created a Biofuels Interagency Working Group last year, which our office is part of, and it brings together top leaders from the USDA, EPA, DOE and others to tackle the tough issues around first generation of biofuels and also help deliver on the next generation of biofuels.
To be clear, this administration is working to provide continued support for first-generation corn ethanol, which we believe is a critically important renewable fuel source. At the same time, we’re also looking forward and are working to accelerate the creation and rapid deployment of advanced biofuels, which we think will ultimately become one of the nation’s most important industries in the years to come.
Now, I know there are a few issues, as Bob and I spoke about earlier this week, with respect to ethanol that are of particular interest to this group so I wanted to take a few minutes to talk about those issues. The first is the ethanol tax credit and the second is the pending E-15 waiver request.
We certainly welcome RFA’s willingness to advance new ideas about how to tackle these policies. The administration has had a strong partnership with RFA and we certainly look forward to continuing that. As you know, we support the extension of the ethanol tax credit and recognize how important that is to the industry.
There have been some recent discussions about how the tax credit might potentially be reformed. The message I want to bring to you today is that we want to and look forward to engaging with the industry and the Hill as we look at options for reform. We want to make sure that it’s guided by a recognition that the existing program does work – we’re certainly not looking to upend a program that works, as occasionally happens in Washington. We want to make sure that we are all on the same page as we move forward and have these discussions.
On the E-15 waiver request, I’ve spoken with many of you about this and heard your concerns. EPA has been working on the waiver and DOE has a rigorous testing process to ensure that a wide range of vehicles can accommodate higher ethanol blends. We expect very soon EPA will have a decision on vehicles with model years 2007 and younger.
If approved, we think this would be a very positive step for the industry and will help in our efforts to reach our biofuels goals.
Before I open this up for questions, I just want to emphasize, what I think you’ve all heard our President say on a number of occasions: when it comes to energy policy, our country faces a fundamental choice – it’s a choice between action and inaction; between clinging to the old ways of doing business and embracing the possibilities of a new clean energy economy; between leading the global race in clean energy or falling behind countries like China, Germany, and India.
This administration wants to see the biofuels industry succeed. After all, the American people have a stake in your success. Right now, roughly 95% of the fuel that powers our cars, trucks, trains, and planes comes from oil. Over half of this oil is imported from overseas and it accounts for over one-third of our carbon emissions.
With statistics like that, there’s no question that biofuels will continue to be a critical component of our energy policy – and along the way, it’s going to reduce our dependence on foreign oil, create jobs, and protect the environment, and invigorate rural economies
Thanks for having me today. I look forward to your questions.