Ethanol Battles Oil and EPA for Market Share

February 27, 2015 12:54 PM
Ethanol Battles Oil and EPA for Market Share

Despite lower oil prices, ethanol remains in a tight market share battle with big oil. It was a year ago that the Environmental Protection Agency (EPA) first announced its plan to reduce the amount of ethanol blended into U.S. gasoline. The ethanol industry has been fighting hard to convince the Obama administration to reverse the EPA proposal.

Meanwhile, the oil industry has launched an assault on the ethanol mandate that drives demand for the plant-based fuel, while the Senate recently confirmed an oil industry friend to head the EPA. Oil has never liked the mandate, as it adds to their costs. To counteract those costs, some oil companies, such as Valero, have invested in ethanol .

 “We all know that this is a battle – one over market share, and one that will not be accomplished overnight,” says Tom Buis, CEO of Growth Energy, a trade organization representing ethanol producers and supporters. Growth Energy held its leadership conference this week during Commodity Classic in Phoenix, Ariz.

By focusing on growing demand for ethanol, the industry has doubled the number of retailers offering E15 this past year, Buis says. “It’s only a matter of time before 2015 becomes the year of E15.” Buis believes that E15 is the “low-hanging fruit” we have to promote and get into the marketplace.

Jeff Broin, co-chair of Growth Energy’s Board of Directors, says this year is all about “moving ahead and moving faster” to bring clean, homegrown fuels to the American consumer. Broin noted how 2014 was a historic year for our industry, stating that producers have been selling a “clean, green, high-octane, homegrown product at a huge discount.”

Broin continued by thanking retailers who have started offering E15, noting that, “We are proud to support you and stand with you to bring American ethanol to our customers." Broin highlighted what is at stake – saying, “This is more than a war simply between ethanol and oil; it’s a war between agriculture and oil.” Broin concluded by saying, "This is a war we need to keep fighting, a war we cannot loose. The world is depending on us."

CEO Report

In his address, Buis told attendees, “We are winning this battle and we are winning because of you.” He outlined how oil “hates us, cause they ain’t us.” He highlighted the accomplishments of the industry this past year.  “We have always faced challenges, that’s life, but we focused on growing demand for our product," Buis said. "We have doubled the number of retailers offering E15 this past year; it’s only a matter of time before 2015 becomes the year of E15.” He explained that E15 is the “low-hanging fruit” we have to promote and get into the marketplace.

Food vs. Fuel Myth

Buis also attacked the so-called food vs. fuel myth, explaining how this fallacy cannot be substantiated by any facts and stated, “It’s time to stick a fork in this food vs. fuel debate.” Defending the Renewable Fuel Standard and expanding market access to E15 will be among the industry’s top priorities in 2015.

 “We must continue to educate consumers on the benefits of ethanol – it reduces our dependence on foreign oil, improves our environment and creates jobs that can be outsourced and ensures a robust farm economy,” Buis said.

This will not be an easy challenge, he added. “America has a can-do attitude, and that is what we have to get back to,” Buis said. He recalled how he called on President Obama to “tear down this blendwall” a year ago, continuing, “We are still waiting Mr. President.”

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