Biden ethanol waiver a boost for area farmers, ethanol plants

Source: By Tim Krohn, Mankato Free Press • Posted: Monday, April 18, 2022

President Joe Biden’s move to trim gasoline prices by about a dime a gallon by waiving rules that restrict how much ethanol goes into gasoline is good news for the Mankato region, where cornfields and ethanol plants abound.

“We’re excited. It was a great announcement,” said Shane Roby, general manager of the POET ethanol plant in Lake Crystal.

He said Biden’s decision to allow a 15% blend of ethanol rather than 10% during the summer months has many benefits.

Roby said it reduces the need for foreign oil, creates more jobs, is better for the environment and reduces greenhouse gas emissions.

Jeanne McCaherty, the CEO of Guardian Energy, which has a plant in Janesville, said being able to sell E15 year-round is also a benefit for gas stations that have had to bag pumps and stop selling E15 on June 1 and then start up again in September.

While some have said E15 produces more volatile emissions in the summer months, McCaherty said that is a fiction.

“All signs and studies say E15 does not have higher volatility than E10 and, in fact, is even a little bit better than E10.” She said the only reason E10 but not E15 was initially approved for year-round sales in the 1990s was because no one at that time envisioned having an E15 or higher ethanol blend.

Biden has used a variety of tools to try to bring down gas prices, which in the Mankato area have been around $3.80 a gallon.

“I’m doing everything within my power by executive orders to bring down the price,” Biden said when making his announcement in Iowa this week. “It’s not going to solve all our problems, but it’s going to help some people.”

Roby said the move gives consumers more choices at the pump.

“Having E15 year-round lets consumers choose if they want E10 or E15 or premium.”

Kent Thiesse, farm management analyst at MinnStar Bank in Lake Crystal, said the announcement is a win for the region.

“It’s good news for the area and the ethanol plants and the farmers.”

He doesn’t expect the move will necessarily increase corn prices much if at all. Corn prices, at $7.46 a bushel, are already very strong. But it will probably stabilize prices and keep them from falling.

Corn is either sold to make ethanol, to make livestock feed or is exported.

Thiesse said that if corn prices go too high, ethanol plants often reduce production and livestock farmers seek alternate feed sources.

He said strong corn prices are the product of fairly tight supplies and strong demand.

“Exports have been strong. China has bought a lot of corn. And once we got out of COVID, demand for fuel grew, so that was good for ethanol.”

Most gasoline is blended with at least 10% ethanol and is cheaper than gas.

But Roby said there are still too few service stations that sell E15. The biofuels industry has been pushing for more E15 fuel pumps.

Nationwide only about 2% of U.S. gas stations offer it. In Minnesota 20% of gas stations offer E15.

Biden said the government will invest $100 million to build more biofuel pumps at gas stations across the nation.