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Renewable Fuels: Ready for the FightIowa Renewable Fuels SummitJanuary 30, 2013
Iowa’s Ethanol Industry • 41 operating ethanol plants with capacity of 3.7 billion gallons • 1.35 billion bushels of Iowa corn • 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
Iowa’s Biodiesel Industry • 12 biodiesel plants with capacity of nearly 315 million gallons • 10 operated in 2012, producing 184 million gallons • Nearly 18% of US biodiesel production
State of the Iowa Renewable Fuels Industry • Ready to Fight!
Iowa RFS Coalition • 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 • Renewable fuels raise food prices and starve the world’s poor.
Food AND Fuel Fun Fact • 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 • US ethanol plants produce more tons of nutritious animal feed than all US soybean crush plants.
Food AND Fuel Fun Fact • Food price inflation has been lower during the RFS/ethanol era than in years prior. • Average Annual US Food Price Inflation • 2005-present: 2.95 percent • 1980-2004: 3.47 percent
Food AND Fuel Fun Fact • 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 • The 2012 Drought • Inflation: October 2011 – October 2012 • Food: 1.7 percent • Energy: 4 percent
Food AND Fuel Fun Fact • US ethanol producers use just 2.9% of the global grain supply.
Food AND Fuel Fun Fact • World farmers are responding to the higher grain prices and production and rural incomes are up.
UN Food and Agriculture Organization • “…investment in bioenergy could spark much-needed 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 • All livestock producers hate the RFS.
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.
Baseless Attack #3 • Renewable fuels/higher corn prices cause farmers to rape the land and ruin the environment.
Iowa CRP Acres • 2000 • Ethanol Production: 440 million gallons • CRP Acres: 1.599 million • 2011 • Ethanol Production: 3.7 billion gallons • CRP Acres: 1.664 million
Higher Farm Income Reinvested • According to a survey of farmers invested in ethanol plants, since 2005 farmers have reinvested their higher income: • 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.”
Oil Industry Specific Subsidies • 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
Western Capital Energy Development • “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.”
Web-Site & Contact Information www.IowaRFA.org 515-252-6249 mshaw@IowaRFA.org 5505 NW 88th Street Phone (515) 252-6249 Johnston, IA USA Fax (515) 225-0781 50131-2948 E-mail email@example.com