How new biofuel bills can impact consumers at the gas pump

Source: By Taylor Deckert, Siouxland News • Posted: Wednesday, March 23, 2022

As senators try to expand production and availability of biofuels in America, operations in Siouxland say they are giving their full support to get Iowa’s ethanol to consumers all over the nation.

The Home Front Energy Independence Act was just introduced on Monday, March 21st, by several Midwest lawmakers, including Representative Randy Feenstra.

The new bill goes hand-in-hand with the bill introduced by Senator Joni Ernst, with a goal of lowering gas prices nationwide, boosting the economy in rural parts of Iowa and providing more fuel options to consumers.

The effect is being felt at the gas stations, but the ethanol process starts at plants like the Siouxland Energy Cooperative in Sioux Center, Iowa, which produces 65 million gallons of ethanol annually, equating to 21 million bushels of corn.

That’s up to 20 semi loads a day of ethanol.

As of now, 98% of the fuel being produced is getting used in other states, like California.

“We’re running about wide-open,” said Jeff Altena, with Siouxland Energy Cooperative.

Operations are at full capacity and Altena says, with these new biofuel bills, the industry is ready for more support to get the product to the consumer.

“Instead of blending E-10, you move that up to E-15, that’s another 60 million gallons a year of ethanol. That’s a big deal. That’s 95.4 million dollars in Iowa alone,” said Altena.

US Representative Randy Feenstra says the bill introduced Monday can give more options at the pump.

“The bottom line is reducing the costs at the pump to get gas below that four and five dollar rage,” said Rep. Feenstra. “We want to see it below the two dollar range and this is using the Midwest’s biofuels,”

The Home Front Energy Independence Act would:

  • Make E-15 available year-round
  • Establish an E-15 tax credit
  • Direct the Environmental Protection Agency to finalize the labeling rule
  • Provide funds for biofuel infrastructure at gas stations

In an interview for Siouxland News’ “Proud to be a Hometown Farmer,” local farmer and former board member at Siouxland Energy Cooperative Kelly Niewenhuis claimed that E-15 can also lower carbon index scores.

“Biofuels are here now and they’re known to lower carbon emissions by 50%,” Niewenhuis said.

Sioux Center’s plant has been adding a boost to the local economy for 21 years, working with more than 800 farmers year-round.

“I think for Iowa as the largest producer of ethanol, it just makes sense to say ‘hey, carry as much E-15 as possible at the station level and leave it up to the consumer,'” said Altena.

So, what does this mean for the gas stations?

A big change in the bill signed by Senator Ernst, compared to the one that was tried in 2021, was wording – not making these changes a mandate, but rather an option for gas stations.

“It’s not a mandate. It’s something that, if they’re compatible with these proposals, we’ll help them with the cost. If they’re not compatible, then they’re not required to do anything,” Altena said.

It’s an attempt by Congress to try and help families save where they can, starting in the gas tank.

“When you look at inflation, when you look at interest rates rising, families on a budget, it’s a big deal,” said Altena. “And all that extra 10-to-15 cents a gallon is a big deal.”

The bill starts with the impact at the gas stations nationwide and in the infrastructure, giving them an option to have additional funding to get more E-15 at their stations if they are compatible.

“It really comes down at the station level. The owners of the stations are the ones that determine what’s being offered to the public and that’s to their pumps. They have blender pumps that are E-10, E-15, 20, 30. There’s a cost with that. If you’re a station owner and you can put tankage in, you have to put new equipment and there’s a cost to that,” Altena said.

Any bill may have to provide money to these gas stations to handle the higher blend of E-15.

“What this bill is doing, allows the station owners, and find out if they’re compatible to handle the E-15. If they’re not compatible they get a waiver to have some additional funding to put in the new tanks and give consumers the option to have E-15, as opposed to what is already offered there,” Altena said.