Ethanol industry battles Big Oil for market share

Source: By St. Joseph News-Press • Posted: Tuesday, December 15, 2015

Despite a recent setback, supporters of ethanol — including one St. Joseph company — pledge to renew efforts at persuading the public of the fuel’s viability for their vehicles.

In late November, the Obama administration announced — via the Environmental Protection Agency — that it will boost the amount of corn-based ethanol and other renewable fuels added to the nation’s gasoline supply. The decision came amid opposition from oil companies, environmentalists and some Republican presidential candidates.

The EPA’s final rule aims to increase ethanol-blended gasoline through 2016. The requirement calls for the manufacturing of more than 18 billion gallons of renewable fuel, primarily ethanol, next year.

The amount falls short of a level set by an eight-year-old renewable fuels law, but it’s still more than what the EPA proposed in May. An executive with a local ethanol firm said that’s acceptable, but he vows to raise public consciousness in the future about ethanol.

“The numbers weren’t quite as high as what the law said they could’ve done,” said Dave VanderGriend, chief executive officer of ICM Inc., a 20-year-old business that’s been producing ethanol locally since 2014. VanderGriend — who is based with the firm’s home office near Wichita, Kansas, — stopped in St. Joseph on Thursday.

“We are right at the range of what we expected it to be,” VanderGriend said, referring to the federal Renewable Fuel Standard program, which sets annual targets for ethanol. “We always would like to have more opportunity for a bigger market. But they also could’ve made it less.”

For now, ICM is content to join with others in the ethanol industry to focus on promoting the renewable fuel’s benefits.

“The real value is the octane that you get” from ethanol as its best source, VanderGriend said. Octane is the flammable hydrocarbon obtained by oil refining, with higher ratings perhaps serving as a barrier to engine damage and increasing performance.

VanderGriend said ethanol’s advantages include its place as a distinctively domestic and local product.

“It’s good for agriculture. It’s good for the environment. It’s good for air quality, for people’s health. So we’re excited about the industry,” he said. “We are a clean-burning product.”

The fuel has admittedly plateaued from its initial popularity, due to the federal standard’s lower-than-expected rise. Yet companies such as ICM aren’t giving up on its future.

“We’re in a stable, no-growth mode today,” VanderGriend said. “We think that our industry will continue to grow, albeit a little bit slower than it was in the past.”

Competition with the oil industry, which is struggling with weaker demand amid a high supply, remains a factor for ethanol.

“The petroleum industry doesn’t want to lose market share, either,” VanderGriend said. “Every gallon of ethanol (sold) is a gallon of oil not sold.”

Missouri Corn Growers Association President Morris Heitman — who lives in Holt County — said the EPA’s decision fell short of the statutory level.

“Anything else is a win for the oil industry at the expense of family farmers and consumers,” he said. “Consumers, the economy and our environment will pay the price.”

The EPA has said the standard as set out by law cannot be adequately met, in part because of the limits on the amount of renewable fuels other than ethanol that can be produced. Next-generation biofuels have not risen in popularity as fast as required by Congress and expected by the administration. The National Farmers Union is among groups pressing for a higher standard.