Ethanol, corn leaders in Nebraska optimistic about federal support

Source: By NICK BERGIN, Lincoln Journal Star • Posted: Monday, March 13, 2017

While farmers might be experiencing some heartburn over the future of the federal Renewable Fuels Standard, Nebraska’s corn and ethanol leaders say they’re optimistic President Donald Trump and Congress will support ethanol, an important pillar of the state’s agricultural industry.

Several years of bin-busting harvests have driven row-crop prices below the break-even mark for farmers, and corn stocks have reached a 30-year high of 12.4 billion bushels as of December, according to the most-recent U.S. Department of Agriculture figures.

Government forecasters expect net farm income will roll in at $62 million in 2017, which is nearly half what America’s farmers made in 2013.

Now imagine what Nebraska’s farm economy would look like without an ethanol industry to buy up to 40 percent of its corn crop and turn the kernels into fuel, oil and a nutritious feed for animals known as distillers grain, Todd Sneller, administrator of the Nebraska Ethanol Board, said in a recent interview.

“One of the public-policy drivers that is a very real deal right now is making sure that agriculture has a chance to compete and stay healthy. The ethanol sector is one way to make sure that happens,” Sneller said.

Several issues with the potential to massively impact ethanol have the industry abuzz as the Trump administration and Scott Pruitt, the new head of the Environmental Protection Agency, begin to mold ethanol’s future.

“When an administration changes, I think we’re always looking at how do we continue to play to our strengths? How do we identify what the public policies are that are most important to that administration? How do we make the case that we need to support these policies,” Sneller said.

Mixing it up

Confusion and outcry erupted in recent weeks when Bloomberg and other media outlets reported billionaire investor Carl Icahn and the Renewable Fuels Association, the nation’s largest biofuel trade group, negotiated a deal presented to the Trump administration that would shift who is responsible for mixing renewables into fuels in exchange for allowing E15 gas to be sold year-round instead of only in the winter.

The news prompted an immediate response from Fuels America, a coalition that includes the likes of Archer Daniels Midland and Monsanto, which cut ties with the Renewable Fuels Association over the controversy.

“Despite our opposition, the Renewable Fuels Association has elected to lend its support to Mr. Icahn’s efforts. Accordingly, RFA’s position is no longer aligned with America’s biofuel industry, and the Fuels America coalition has resolved to sever ties with the group,” Fuels America said in a statement.

The White House later said no executive order on the issue would be forthcoming.

Despite that, the ethanol industry hasn’t seen the end of discussions over who is responsible for blending renewables into America’s fuel supply, Sneller said.

Several organizations last year asked the EPA to shift the responsibility for blending — known as the point of obligation — from refineries and importers of fuel to the businesses that hold it just prior to sale at the pumps.

The EPA under President Barack Obama proposed denying the requests but also took comments from the public, a process that has pushed the final decision, which has yet to be made, into the Trump administration.

“It’s going to be an ongoing debate. It’s really in the hands of the Environmental Protection Agency,” Sneller said.

Renewable Fuels Nebraska, formerly the Association of Nebraska Ethanol Producers, has issued a statement opposing the change.

“Since its inception in 2005, the Renewable Fuels Standard has been a pillar of our domestic-energy policy,” Renewable Fuels Nebraska Executive Director Mark Palmer said in the statement.

“RFN remains strongly opposed to any change in the Point of Obligation if it would undermine the integrity of that important program.”

Growth and E15

President Trump in February issued a letter of support for ethanol and reiterated his campaign promise to reform regulations that impede growth or increase consumer costs without sufficient environmental or public health benefit.

“Rest assured that your president and this administration values the importance of renewable fuels to America’s economy and to our energy independence. As I emphasized throughout my campaign, renewable fuels are essential to America’s energy strategy,” Trump’s letter said.

“As important as ethanol and the Renewable Fuel Standard are to rural economies, I also know that your industry has suffered from overzealous, job-killing regulation. I am committed to reducing the regulatory burden on all businesses.”

Trump’s promise to do away with job-killing regulations could work in ethanol’s favor, Sneller said.

Ethanol supporters have renewed a push to change EPA regulations to allow E15 to be sold during the summer.

Reps. Adrian Smith, R-Neb., Dave Loebsack, D-Iowa, recently reintroduced legislation in the House that would allow gas stations to sell E15 blends year-round.

In the Senate, Sens. Deb Fischer, R-Neb., teamed with Joe Donnelly, D-Ind., and Chuck Grassley, R-Iowa, to introduce similar legislation — the Consumer and Fuel Retailer Choice Act.

Advocates say it would increase market access for higher blends of ethanol year-round, increasing regulatory certainty and make it easier to market the product by eliminating confusion that happens when it disappears from pumps several months out of the year.