Regulation of Fuels and Fuel Additives: Renewable Fuel Standard ...

5. Potential Water Quality Impacts
Expansion in the use of renewable fuels will also have other important impacts
which should be the focus of further study and evaluation. In particular, renewable fuels
such as ethanol and biodiesel produced from agricultural feedstocks raise important
issues with respect to the water quality impacts resulting from the increased production of
corn and soybeans. Due to competing demand, which includes livestock producers,
sweetener manufacturers, and foreign buyers among others, it is extremely unlikely that
the current corn crop would be devoted to ethanol production. USDA's Economic
Research Service predicts that current demand for feed and exports are expected to stay
constant or perhaps rise. 6 Additional corn-based ethanol production would have to come
from increased corn yields, increased acreage, and switching acreage to corn production
from other crops like soybeans and cotton. 7
Changes in agriculture as a result of increased use of renewable fuels can have
significant adverse effects upon water quality, either locally or on a more broad basis.
This has the potential to lead to increased runoff and delivery to water bodies of nutrients,
pesticides and sediments, as well as increased salinity of farmland resulting from
increased irrigation. The increased runoff of nutrients in turn can cause eutrophication of
small water bodies as a result of localized runoff or large water bodies as a result of
increased regional runoff such as currently occurs in the creation of the hypoxic zone in
the Gulf of Mexico, or eutrophication in the Chesapeake Bay. Some lands have been
retired (e.g., under the Farm Bill's Conservation Reserve Program, or simply at the landowner's
initiative) because those lands are highly erosive, steep, or adjacent to water
bodies. Therefore, farming these lands without appropriate mitigation measures would
pose a particularly great risk to water quality and threaten to erase some of the gains of
the last 20 years of Farm Bill and Clean Water Act implementation. Note that there may
be similar environmental implications in other countries depending on the extent that
either imports of renewable fuels or exports of agricultural commodities such as corn are
affected.
We have not conducted an analysis for this proposal of the impacts on water
quality that might result from the increased use of renewable fuels. However, this impact
could present important public policy issues as renewable use expands, with examination
required of both the possible benefits and detriments.
B. Program Structure
The RFS program proposed today requires refiners, importers, and blenders (other
than oxygenate blenders) to show that a required volume of renewable fuel is used. The
required volume is determined by multiplying their annual gasoline production by a
percentage standard specified by EPA. Compliance is demonstrated through the
6 "USDA Agricultural Baseline Projections To 2015," February 2006, Economic Research Service
7 For more discussion of agricultural sector effects, see Section IX.
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