Gov. Pete Ricketts among those touting higher ethanol blends at industry conference in Omaha
Source: By Russell Hubbard, Omaha World Herald • Posted: Thursday, August 17, 2017
Ready or not, higher ethanol blends appear destined for a gas station near you, a development touted by Nebraska Gov. Pete Ricketts Wednesday at a major industry conference being held in Omaha.
“The ethanol industry is a prime example of how we can add value to the agriculture commodities that we grow right here,” said Ricketts, who gave the keynote address Wednesday at the American Ethanol Coalition’s annual conference in Omaha. “This is the type of value-added agriculture that helps create jobs, increases demand for locally grown commodities and attracts new businesses, which are all part of growing Nebraska.”
Packing more ethanol into the nation’s motor fuel supply is a key hope for the industry, which is aiming beyond the 10 percent blend now common at the pump. E15 — or a blend with 15 percent ethanol — is the future, supporters say.
About two dozen plants produce ethanol in Nebraska, providing corn farmers with a buyer with a voracious appetite for the grain.
Also, it is frequently pointed out, ethanol distillation produces a leftover grain byproduct that is a high-protein cattle feed, useful particularly in Nebraska, the largest cattle-feeding state.
“I like to call it the golden triangle of Nebraska agriculture,” Ricketts said of the nexus of corn, ethanol, cattle and cattle feed. “They are great synergies with the commodities we produce.”
Speakers at the conference included retailers adopting E15 in conjunction with grants from the U.S. Agriculture Department that help pay for new pumps capable of dispensing the fuel.
Charlie Bosselman, head man at Grand Island convenience store operator Bosselman Enterprises, said his chain of 44 Pump & Pantry locations are going all-in for E15, which sells for less per gallon than lower blends.
Detractors point out that the savings is a mirage, that the lower energy content of ethanol offsets the lower price. But retailers say the price on the signboard out front draws in the drivers, along with their demand for diet Mountain Dew, unfiltered Camels, Honey Buns and Slim Jims.
“Our big push is the promotion of E15,” Bosselman said. “The simple reason is to make money.”
Bob O’Connor, operator of a four-store chain in Milwaukee called Jetz, said he, too, is converting to pumps capable of supplying motorists with E15 and even E85. He said that costs for replacing older pumps and related equipment can top $300,000 but that grants can add up to $130,000, making the payoff for the investment come five or six years down the road, not 10.
O’Connor said his chain has been selling E15 since November, and despite warnings from ethanol detractors that it is not safe for some cars on the road, there have been no problems.
“Zero complaints,” O’Connor said.
The Renewable Fuels Association says almost a dozen chains, including Iowa-based Hy-Vee and Kum & Go, offer E15 at 2,000 locations nationwide, and that the number is growing.
Ricketts said in his remarks at the conference Wednesday that keeping up with that demand secures the almost 1,500 Nebraska jobs ethanol plants provide, while spurring innovation and further Nebraska job creation at companies working on everything from seed genetics to novel enzymes that allow ethanol producers to squeeze more energy from each kernel.
The whole business has its skeptics, of course, those who say it is an industry built on a mirage of economy and sustained by government support. They point to the federal Renewable Fuel Standard, the effort passed by Congress last decade with bipartisan support that as of this year requires about 14 billion gallons of ethanol to be blended into the nation’s motor fuel supply.
“Our feeling is that E15 will be a great benefit for the producers of ethanol,” said Thomas Pyle, president of the Washington-based Institute for Energy Research, a nonprofit that describes itself as nonpartisan, science-based and an advocate of free markets.
It is highly likely that it can, Pyle said, calling it the preferred oxygen booster at present for gasoline companies, federal requirements or not. The demand is so high that Texas-based Valero Energy, a traditional oil refiner, now ranks as the nation’s third-largest ethanol producer, behind No. 2 Green Plains, based in Omaha.
Still, the petroleum industry remains against much of what ethanol is after. Michael Tadeo, a spokesman for the Washington-based American Petroleum Institute, said 85 percent of the cars on the road aren’t built for E15, the gas mileage advantage is an illusion and the whole shebang is a creation of government policy.
“E15 is simply not ready for prime time,” Tadeo said. “We believe a better direction is to allow people the freedom to use the fuels they truly want like E0.”
Not so fast, says Ricketts, who was elected last time around on a platform that included a big embrace for ethanol as an economic engine (proponents also say it burns cleaner than clear gas, helping the environment).
The governor said at the conference Wednesday that the government requirements around ethanol are a reasonable accommodation for an emerging industry that reduces reliance on imported oil, aids the environment and spurs scientific breakthroughs via research and development.
“Companies must have some degree of certainty before making those investments,” Ricketts said.