Low-carbon ethanol industry has bright days ahead, expert says

Source: By Jerry Perkins, Successful Farming • Posted: Thursday, July 15, 2021

Two Iowa corn and ethanol association officials made that assessment on Tuesday at the Iowa Events Center here during the “Ethanol 101” conference held in conjunction with the 2021 Fuel Ethanol Workshop and Expo (FEW). This is the 37th annual FEW and the first time it has been held in Iowa, the largest ethanol producing state in the United States.

Victoria Butt, marketing development manager at Iowa Corn Growers Association, recalled that Iowa’s ethanol industry was founded when 6,000 Iowa farmers “rolled the dice” and invested in ethanol plants. The farmer-owned plants formed the roots of Iowa ethanol industry. Iowa has 41 ethanol plants that produced 5 billion gallons of ethanol, including cellulosic ethanol, a year.

There are 209 ethanol plants located in 25 states in the U.S. that produce a total of 17 billion gallons, said Butt, who was raised on a fourth-generation Iowa farm near Ackley, Iowa.

The Iowa Corn Growers Association has 7,500 members, she said, and lobbies for Iowa’s corn growers.

The ethanol industry is vital to Iowa’s corn producers. Iowa ethanol plants consume 60% of the state’s corn crop. About a third of that corn is processed into dried distillers’ grains, a high-protein livestock feed. When dried distillers’ grains are accounted for, Butt said, ethanol production accounts for about 30% of the state’s corn crop. Nationally, ethanol plants consume approximately 40% of the nation’s corn crop.

Butt cited statistics from the U.S. Department of Agriculture that, since 2001, ethanol plants have consumed 73.2 billion bushels of corn to produce 205 billion gallons of ethanol and more than 500 million metric tons of dried distillers’ grains.

Ethanol plants have revitalized Iowa’s rural communities by creating jobs at the plants and in auxiliary businesses, such as trucking. Taxes paid by ethanol plants have helped finance rural community schools and local governments, she added.

At the gas pump, Butt stated, ethanol has given consumers more choices for fueling their vehicles and also has contributed to lowering carbon emissions and carcinogens found in gasoline.

State Associations

Monte Shaw, executive director of Iowa Renewable Fuels Association since it was founded in 2005, said that there are nine state associations that promote ethanol and other biofuels, including biodiesel. The Iowa Renewable Fuels Association (IRFA) has recently added renewable natural gas to its portfolio of biofuels that it advocates for, Shaw said.

State associations work on issues such as state regulations concerning fuel specifications and air and water permits.

He cited an example of problems raised by the Iowa Department of Natural Resources (DNR) during the governorship of Tom Vilsack, who went on to serve as Secretary of Agriculture in the Obama administration and is once again serving in that position in the Biden administration. During Vilsack’s stint as governor, the Iowa DNR proposed stringent rules for water discharge permits required for the state’s ethanol plants, Shaw recounted. The proposed regulations were opposed by the IRFA and were eventually discarded by the DNR, which saved each of Iowa’s ethanol plants millions of dollars, Shaw said.

The IRFA also lobbies for legislation at the Iowa General Assembly that will benefit the state’s ethanol plants, Shaw noted. The IRFA succeeded when it supported state legislation that provided cost-share funds for gasoline retailers who installed fuel pumps that could dispense higher blends of ethanol.

However, the IRFA and other Iowa biofuels associations didn’t succeed in promoting legislation supported by Iowa Governor Kim Reynolds that would set a minimum amount of biofuels that would be contained in the Iowa fuel supply. The legislation, which failed to pass the Republican-controlled Iowa legislature, would have mandated higher biofuel blends such as B11 (11% biodiesel) and E15 (15% ethanol). The legislation will be reintroduced in the Iowa legislature at its next session, Shaw said, in answer to a question from Successful Farming after his presentation.

Shaw said that states such as Iowa often serve as the proving ground for biofuel legislation at the federal level that promotes ethanol use. Legislation that promotes biofuel use can be tested in Iowa and adopted nationally when it proves successful, he noted.

Politically, the IRFA also has benefitted the ethanol industry by introducing the many presidential candidates from both political parties who campaign in the state’s first-in-the-nation caucuses held every four years. For example, the IRFA reaches out to all candidates and makes sure they are aware of the importance of biofuels to Iowa’s economy and will set up ethanol plant tours to acquaint the candidates with the industry’s impact on the state.

Shaw pointed to Donald Trump’s and Joe Biden’s promises made during the Iowa caucuses as examples of how candidates who go on to become president can be influenced to support biofuels during their campaigns. “Elected officials like photo ops and good headlines,” Shaw stated, “and we are the boots on the ground that can make that happen.”

FEW Opens

The Fuel Ethanol Workshop and Expo opened this morning and runs through Thursday at the Iowa Events Center in downtown Des Moines. For more information, go to fuelethanolworkshop.com.

At the opening session, Renewable Fuels Association President and CEO Geoff Cooper said that low-carbon ethanol’s “brightest and sunniest days remain ahead” despite the two recent judicial setbacks and a growing policy push on electric vehicles.

On June 25, the U.S. Supreme Court struck down the U.S. 10th Circuit Court decision in January that found that oil refiners can only apply for an extension of an exemption from the Renewable Fuel Standard (RFS) volume obligation if they have continuously received refinery exemption extensions every year. The granting of Small Refinery Exemptions had reached a peak during the Trump administration and had cost the U.S. ethanol as much or more than an estimated 4 billion gallons in annual ethanol demand.

On July 2, the D.C. Circuit Court of Appeals vacated a 2019 rule by the Trump Administration’s Environmental Protection Agency (EPA) that had withdrawn EPA restrictions on the summertime use of E15, a 15% blend of ethanol with gasoline. National ethanol groups like the Renewable Fuels Association, Growth Energy, and the American Coalition of Ethanol and state groups like the IRGA had, for many years, lobbied the EPA to approve the use of E15 during the summer.

Today (July 14), a bipartisan group in the U.S. House of Representatives introduced the “Year-Round Fuel Choice Act,” that seeks to ensure the continued availability of E15 at fuel markets all year. The same legislation has been introduced in the U.S. Senate, too.

Shaw noted that President Biden has pledged to boost ethanol use during his administration and ethanol advocacy groups are proposing Congressional action to make E15 available at the pump year-round.

Despite the recent setbacks in the courts, Cooper stated that “the ethanol industry is still in a stronger position today than we’ve been in for years. Our outlook remains bright, despite what the headlines and our opponents would like us to believe.”

Cooper stressed that there is strong support for ethanol in Washington, from Congress to the White House to the EPA. “Renewable fuels continue to enjoy strong support from both political parties and in both chambers of Congress,” he said. “This support is something RFA has been cultivating since our organization was founded 40 years ago. We are so incredibly fortunate to have so many elected officials who truly understand the benefits and advantages of producing and using renewable fuels. They know that the people in this room play a critical role in creating jobs and improving rural livelihoods, diversifying and securing our energy supply, and cleaning up the air we breathe.”