The executive director of the Iowa Renewable Fuels Association says a just-revealed oil industry study shows a proposal by Texas Senator Ted Cruz could have a devastating impact on the ethanol and biodiesel industries in Iowa.

IRFA president Monte Shaw says the plan would give waiver credits to oil refiners for the Renewable Fuels Standard. “That they could use for compliance with the program without actually blending the 15 billion gallons. And out point was…if you are not blending the 15 billion gallons — then you are not protecting the 15 billion-gallon RFS,” according to Shaw. He says the plan goes against the purpose of requiring a set amount of renewable fuel use.

“It’s just a scheme,” Shaw says, “so, anything that reduces blending below 15 billion gallons even though you are quote-unquote complying with the R-F-S because you have these artificial waiver credits, still undermines the RFS.” Shaw says President Donald Trump needs to know what the impact of the plan will be.

“The president needs to hear these facts, he needs to be aware of this study that was apparently made public — I doubt that they wanted it made public — because it undercuts all of their arguments that they’ve been using,” Shaw says. “And he needs to stand firm behind his promise to the Iowa voter and the Iowa farmer to protect the RFS.”

The Executive Director of the Iowa Biodiesel Board, Grant Kimberley, says the plan would cut biodiesel production by 300 million gallons.

“This happens to be exactly or almost exactly what the state of Iowa produced for our entire biodiesel industry this past year,” Kimberley says. “So basically, you are talking about wiping out the entire Iowa biodiesel industry by doing this.” Kimberly says there would be other impacts.

“We’d see a 185 million dollars more in feed costs for livestock producers around the country — likely leading to an increase in food costs for consumers,” he says. And he says there would be other impacts on commodities.

He says soybean farmers would see a reduction of prices by at least 15 cents a bushel. The White House has scheduled a meeting for Monday morning (March 12th) to discuss the future of the RFS. Shaw says if the Cruz plan is adopted, Iowa State University has determined that corn prices would drop an additional 25 cents per bushel from already low levels.