Governors' Biofuels Coalition

Former Iowa Governor Tom Vilsack, who was secretary of agriculture under President Barack Obama, is low-key in public and uses the word opportunity a lot. Those are characteristics that should serve him well in his new job as the CEO of the U.S. Dairy Export Council. Recently, Vilsack shared his vision of the opportunities and the challenges facing America’s farmers as his successor, a fellow governor from Georgia, Sonny Perdue, takes the helm at USDA. Here is a slightly condensed version of that conversation.

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Q. Regarding ethanol, what do you think may happen to the Renewable Fuel Standard? The head of EPA, Scott Pruitt, was no friend of the RFS when he was Oklahoma’s attorney general.

A. I think people need to be very wary… and need to continue to advocate for it and to point out the benefits to consumers, to the environment, to jobs, to the economy of the upper Midwest. Fortunately, we’ve got a lot of champions in Congress, but there’s a real keen desire on the part of many people to curtail, to eliminate, or to fundamentally change that Renewable Fuel Standard. I dealt with that for eight years. We finally got it on track to meet the statutory requirements with corn-based ethanol. That was not an easy lift, but we got it done, and now I think it’s clearly under a microscope. I think people have to be very, very concerned about this. And it’s not just the EPA administrator, it’s some of the special advisers that the president has appointed who have as a specific reason for participating in the White House: significant changes to the Renewable Fuel Standard. And there are members of Congress who would prefer to get rid of it altogether. It’s a constant battle. There’s no question about it.

Q. Who in the White House wants changes to the RFS?

A. Carl Icahn, who is interested in changing the system on the RINs. [Billionaire investor Icahn owns controlling interest in an oil refinery and wants to see trading of Renewable Identification Numbers shifted away from refiners to retailers.] That would be a pretty significant change that would make it very, very difficult for the industry to continue to grow.

Will this administration, for example, continue to promote infrastructure that allows for higher blends of ethanol? [Expanding installation of blender pumps was something Vilsack supported with USDA programs.] Will the EPA take a look at vapor pressure and things of that nature that could potentially make it easier to sell higher blends over a longer period of time during the year? There are other issues that could help the industry grow and expand in addition to basically preserving what you’ve got.

Q. If these things don’t happen, will ethanol be stuck at about 10% of the U.S. gasoline market?

A. Well, I think we’ve instructed the industry from the last determination by the Obama administration to get to 15 billion gallons of corn-based ethanol. That’s the statutory cap, so it is going to be important to determine what’s next, and I think it’s also important on the export side to think about export opportunities. There’s potential demand outside of the U.S. for ethanol.

Q. Are ethanol exports another area where Mexico plays a key role?

A. Right, or China. And certainly when [Iowa] Governor [Terry] Branstad becomes Ambassador Branstad [to China] there’s an opportunity there, as well.

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