Governors' Biofuels Coalition

About a year ago, an Iowa front group for Big Oil tried to trick former state legislators into signing letters to the editor that sounded “pro-ethanol” but actually advocated for a policy approach that was opposed by every state and national biofuels/agriculture group and would have harmed every farmer in Iowa.

It seems Big Oil is back at it with a new angle.

Mike Helland’s recent oped urging President Trump to allow exported ethanol gallons to count toward Big Oil’s domestic obligations under the Renewable Fuel Standard (RFS) reads like this would be a big boost for ethanol demand. I’m sure that’s why Mike agreed to have his signature affixed to the letter.

Mike Helland is a good man, good farmer, and good ethanol supporter. But he was sold a pig in a poke.

In truth, allowing exported ethanol to count toward the RFS would not really boost exports, but it would devastate ethanol demand here at home. The result would be less ethanol production, less corn demand, and lower corn prices. That’s why every ethanol and ag group strongly opposes this export scheme. About the only thing accurate in Big Oil’s letter is that this change would make life more comfortable for refiners.

The math is simple.  Today, the RFS requires that Big Oil use 15 billion gallons of ethanol in the United States. U.S. producers also will export more than one billion gallons. That means U.S. ethanol producers have a 16-billion gallon market – and a market that grows as we open up more export opportunities.

Under the export credit scheme, U.S. ethanol production would essentially be capped at 15 billion gallons.  Every gallon exported would equate to one less gallon Big Oil would use in the U.S. And every time we opened an export opportunity, it would simply allow Big Oil to avoid using even more ethanol in the U.S.

I understand that Big Oil prefers its old fuel monopoly over the RFS. But it should advocate for its position honestly.  Big Oil knows its letter was misleading. I think it says a great deal about the public benefit of its proposal when it has to resort to misleading people in order to promote it.

Iowans should beware. I’m sure this won’t be the last time Big Oil tries to mislead Iowans about their anti-ethanol schemes.

Monte Shaw is executive director of the Iowa Renewable Fuels Association.

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