Despite Legal, Legislative Turmoil, Ethanol Industry Remains Solid Contributor

The nation’s ethanol industry gathered for its annual conference in New Orleans this week in what may be considered volatile times for the sector. But whatever challenges corn growers, biofuel producers and value chain members may be facing, this week also underscored the economic and environmental value of ethanol.

Dominating the ethanol arena is a free-for-all battle of lawsuits now pending in the U.S. District Court of Appeals for D.C., all disputing from different angles the biofuel blending levels EPA set last November under the Renewable Fuel Standard (RFS). Biofuel groups are challenging the agency’s authority to set the 2014-2016 limits below those established in the 2007 law reauthorizing and strengthening the RFS. Oil and refiners trade groups have filed their own lawsuits arguing EPA set unrealistically high blending levels, particularly for cellulosic biofuels. The National Farmers Union, Delta Airline’s Monroe Energy LLC and Valero Energy, the nation’s largest oil refiner and third largest ethanol producer, have also joined the melee, filing suits that attack different aspects of EPA’s rule establishing the blending levels.

Meanwhile, the RFS and ethanol producers are continuing to face challenges in Congress where, in the most recent episode, a pending Senate energy bill has brought with it amendments seeking to eliminate the corn portion of the standard or kill the RFS outright.

And all of the legal and legislative skirmishes bring with them what has been over the past decade a constant refrain of criticism of ethanol, attacking its impact on food production and prices, questioning its energy balance and raising doubts about its environmental benefits. Of course, anyone paying just a little attention to the issue knows these criticisms have repeatedly been disproven, shown to be unsubstantiated and, in many cases, found to be trumped up by business groups desperately seeking to protect their own interests.

So, when the industry gathered in New Orleans, the conference served as a reminder to those attending that biofuels remain a viable and, in fact, necessary element in meeting the nation’s energy needs.

Welcomed were comments out of Washington from Agriculture Secretary Tom Vilsack on the latest USDA-supported research showing significant improvement in the efficiency of ethanol production and other trends, including one report the department’s Office of the Chief Economist and another study published by the University of Missouri.

Vilsack said the research demonstrates biofuels have heavily contributed to the vast expansion and evolution of the renewable energy industry, especially since the Obama administration embraced an “all-of-the-above” energy strategy beginning in 2009.

“Since then, we have more than doubled renewable energy production, and today we import less than half our oil,” Vilsack said in a statement. “Improved and expanded ethanol and biodiesel production have saved Americans money at the pump. Our national security has been bolstered because we are more energy secure and also because our nation’s military is a major commercial customer for U.S. biofuels.”

The reports also demonstrate that U.S. farmers continue to improve their efficiency in the production of corn for ethanol while the impact of ethanol production on corn production has become marginal. Nationally, energy is being produced from ethanol at twice the rate of that used to produce it; in the Midwest, the factor is 4 to 1.

Those attending the ethanol conference in New Orleans also heard of a new study showing the U.S. ethanol industry added $44 billion to the nation’s gross domestic product and supported nearly 360,000 jobs in 2015. Industry members were also told of the latest offensive measures aimed at advancing greater use of higher ethanol blends in the nation’s fuel supply through a campaign designed to generate greater consumer support for flex-fuel vehicles (FFVs). And they were given some tools based in behavioral science to develop strategic messages targeted at consumers that would assist them in promoting ethanol.

The 25x’25 Alliance is in full agreement with Vilsack’s assertion that there are many reasons to be optimistic about the future of the bio-economy and the role biofuels and advanced biofuels will play in that future. We are confident that biofuels will continue to demonstrate that they are a boost to the economy, particularly in rural America; that they enhance the nation’s energy security by providing a homegrown, stable supply of alternative fuels; and that they improve our environment by offering consumers a cleaner fuel option with significantly fewer carbon emissions..

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