It's been a tough week for ethanol.
On Saturday, Republican would-be presidential candidates did their best to dance around the question of ethanol during the Iowa Agricultural Summit.
On Tuesday, the Manhattan Institute for Policy Research released an anti-ethanol report on the renewable fuel standard’s hidden costs to consumers, along with an op-ed in the New York Times. (The assertion: Blending ethanol into gasoline caused American drivers to pay nearly $11 billion more for fuel in 2013 compared to buying gasoline alone.)
Then, on Wednesday, the Advanced Biofuels Association declared that it was time for Congress to rework the RFS to provide greater support to cellulosic ethanol and other biofuels.
“Eight years after its passage, it is easy to see that the RFS may be working for some, but it is only minimally helpful to advance the promise and potential of next-generation renewable fuels. We need to acknowledge the simple fact: that the RFS is not equally helpful to all sectors of the biofuels industry,” said Michael McAdams, the group’s president, at the Advanced Bioeconomy Leadership Conference.
He added: “After working with EPA since 2009 to attempt to get pathways approved, feedstocks approved, annual volume requirements released on time, only to frequently be told from the agency that they do not have sufficient legal authority to get the job done, it has become clear that statutory changes need to be made to the RFS.”
McAdams’ comments soon rippled through the cornfields of Iowa.
“The call for change was the first sign of a fissure between ethanol producers,” the Des Moines Register noted. “Until now, they have been unwavering in their message to jointly defend the RFS, a law that requires refiners to buy increasingly larger amounts of ethanol and other fuels through 2022 and mix them into the motor fuel supply. Iowa produces more ethanol than any other state.”
Corn growers and ethanol producers, which have already been wondering when the EPA would address the ongoing RFS uncertainty, did not embrace McAdams’ proposal.
“Going back to the drawing board will undoubtedly give Big Oil an opportunity to eliminate their only real competition,” said Chip Bowling, president of the National Corn Growers Association. “Any attempt to restructure the RFS will start a chain of reactions that will lead to what America doesn't need: dirtier air, more foreign oil, a declining economy, and an oligopoly in charge of our energy future. That's the future that awaits when the RFS is reopened and all the benefits of the biofuels revolution are lost."
The attention comes at a challenging time for ethanol. The industry is coming off an extremely profitable year, thanks to low corn prices and solid export demand for ethanol. But margins are slipping fast, making a potential rewrite of the renewable fuel standard especially unappealing. "In particular, the RFS, regardless of current uncertainties, represents a safety-net for domestic ethanol demand at least at the level of the E10 blend wall,” said Scott Irwin and Darrel Good, agricultural economists at the University of Illinois.
What do you think should happen with ethanol and the RFS? Share your opinion with fellow farmers on the AgWeb discussion boards.