Local View: Time to give ethanol a boost

Source: By Dan McGuire, Lincoln Journal Star • Posted: Monday, November 30, 2020

With history as a teacher, we better not count on exports to China to save our farm sector. Recent trade wars prove that reality. The new Biden Administration is going to push for more renewable energy.

Ethanol is a perfect fit to help rebuild and modernize the U.S. motor fuel infrastructure.

An article in the Nov. 17 edition of World Grain, titled COVID-19’s lasting impact, cites a Rabobank report, “The Grain and Oilseed Sector in a Post-COVID-19 World” authored by Stephen Nicholson, a grain and oilseed analyst for Rabobank, should serve as a warning to corn growers, farm organizations and policymakers in Congress that it’s time to ratchet up ethanol blending under the Renewable Fuel Standard to 30% nationwide as soon as possible.

According to Nicholson, “working from home, less business travel, less vacation travel and more virtual events and meetings make for a grim long-term picture for the biofuels industry.” Nicholson’s report further states, “in recent years we’ve been seeing a slow decrease in corn demand for ethanol in the U.S. That’s been fueled by a couple things, including more fuel-efficient cars, more electric cars and an overall decrease in demand for gas and oil products. That trend was already in place, and it’s not going away. If anything, it might accelerate.”

America needs a 30% ethanol blend to offset that trend.

Ethanol is an environmentally friendly, octane-enhancing, job-creating economic superstar that offers massive benefits for the rural sector and the American economy overall. According to a May 2020 fact sheet from Growth Energy:

* Thanks to ethanol, there are fewer toxic, dirty chemicals in our fuel supply, water and air.

* Biofuels, like ethanol, play a major role in cleaning up our transportation sector and displacing harmful fuel additives like benzene, toluene, ethylbenzene and xylene that can be found in petroleum-based fuels.

* USDA data shows that ethanol reduces greenhouse gas emissions by 39% or more compared to traditional gasoline, with corn ethanol’s relative carbon benefits reaching as high as 70%.

* Research conducted in five global cities by the University of Illinois at Chicago found that E10 ethanol blends cut toxic emissions by 15.2%, while E20 blends reduce toxins by 31.7%.

* A study done by researchers at the Ford Motor Company found that ethanol blends above 30% cut particle emissions by as much as 45%.

An Nov. 18 article from World Grain cites the South China Morning Post as reporting a notice by China’s State Council encouraging all farmers to increase grain production with the planting of wheat, corn and rice. So, the large U.S. corn exports to China that have been in the news lately may not be ongoing, as some grain analysts might hope.

USDA’s November 2020 World Agricultural Supply Demand Estimate report projects that marketing year 2020-2021 corn use for ethanol is only at 5.050 billion bushels, a major drop from 5.5 billion bushels used per marketing year in recent years.

That same report projects 2020-21 corn year-ending stocks at 1.702 billion bushels and average farm prices of only $4. China is a major importer of U.S. corn in the near term due to a tremendous reduction in their domestic grain production and supply.

According to a Nov. 12 Reuters article, “China’s grain buying has accelerated since May as Beijing burned through once-huge stockpiles and as extreme weather damaged this year’s corn crop,” which explains why China is importing so much U.S. corn and U.S. prices have risen a little.

USDA’s Foreign Agricultural Service reports that China’s corn imports are estimated to hit 22 million metric tons (867 million bushels), demand met by the U.S., Ukraine and other suppliers. Even if China buys 500 million bushels of U.S. corn, it will only temporarily offset one year’s lost domestic U.S. ethanol demand.

The Biden Administration must reverse EPA’s RFS ethanol blending waivers for oil companies and push for a 30% ethanol blend in gasoline nationwide. No-till/low-till practices and cover crops make corn ethanol a value-added product of modern, regenerative farming. Ethanol is a pro-environment, renewable energy strategy.

Dan McGuire of Lincoln is policy director of the American Corn Growers Foundation.