Industry insiders look at the state of ethanol
Jeff Broin is CEO of Poet, the largest U.S. ethanol producer, with a network of 26 plants in seven states.
> Encouraging Prospects
Our nation is awash with grain, we have idle ethanol production capacity and energy prices are skyrocketing. Although our industry has only just emerged from some difficult times, clearly the pieces are in place for ethanol to make tremendous strides in the U.S. fuel market in the future.
The only thing preventing the ethanol industry from making a large dent in petroleum's dominance in the fuel market is regulation—specifically, the 10% ethanol blend cap that is current law in the United States. However, the Environmental Protection Agency is now considering allowing blends of up to 15% ethanol. That would allow us to meet the government's renewable fuel goals under the Renewable Fuels Standard (RFS2) and begin the commercial production of cellulosic ethanol.
The Farmer Politician
Bill Northey is Secretary of Agriculture for Iowa, the nation's top ethanol-producing state.
> Regulatory Uncertainties
I expect that existing ethanol plants will continue to operate, but with tight margins in the industry, I don't expect many new plants to be constructed in the short term. Plants are investing in new technologies to make production even more efficient. It is important that any new regulation of carbon take this increased production efficiency into account. I have concerns about some of the indirect land-use proposals that have been made because they use outdated information regarding efficiencies.
These regulatory uncertainties, including indirect land use, have the potential to seriously undermine the development of cellulosic ethanol. My concern is that private investors will shy away from next-generation biofuels if they see corn ethanol being undermined by questionable science and misguided policy.
Bob Dinneen is president of the Renewable Fuels Association, an ethanol trade association.
> Artificial Barriers
Despite the economic turmoil that has riled the nation, I am pleased to say that the state of the ethanol industry is strong. Biorefineries are reopening, new ones are opening and demand for ethanol continues to grow. This is all positive news, but work remains. The EPA must correct the numerous errors and inconsistencies in its proposed rule for the RFS2—as it stands, EPA's proposal would stymie the growth of cellulosic ethanol.
Likewise, EPA must remove artificial barriers limiting the amount of ethanol in the market. EPA is considering allowing blends of up to 15% ethanol. It should approve that and, in the meantime, it should approve blends up to 12% ethanol. This would mean billions of gallons in the marketplace and ensure the goals of the RFS2 are realized. We simply can't afford for EPA to get this wrong.
Darrin Ihnen, a Hurley, S.D., grain producer, is the new president of the National Corn Growers Association.
> Good Reasons for Support
At a time when we're producing more corn than ever before, ethanol provides a crucial market for U. S. corn growers. As a farmer who has become active in the ethanol industry, I see its great value in helping farmers and improving the rural economy. Ethanol also is important for our environment—it helps reduce greenhouse gas emissions. It's also good for our country, by expanding energy independence. Not only are there no good reasons to oppose ethanol, there are plenty of good reasons to support it. That's why we need all farmers—and anyone else who wants to help improve the environment and our national economy—to join us in support of ethanol. Just as we farmers meet our challenges with ingenuity and resilience, America needs innovations like biofuels to move forward, and upward.
Top Producer, October 2009
- OCTOBER 2009