White House committed to ethanol, Agriculture Secretary Vilsack says

Source: By Gannett News Service • Posted: Friday, September 19, 2014

WASHINGTON — Agriculture Secretary Tom Vilsack on Tuesday offered support to ethanol producers facing challenges now, saying the White House is committed to boosting use of the fuel in the country’s gasoline supply.

Speaking before a friendly audience of biofuel producers in Washington, the former Iowa governor said he is confident the Obama administration will restore at least some of the proposed cuts that would have sharply reduced the amount of ethanol required to be blended into the fuel supply in 2014.

The proposed reduction rattled producers in Iowa, the country’s biggest producer of the renewable fuel, and others in the ethanol industry who feared the change would thwart future investment in the technology, hurting agriculture and rural communities that depend on the fuel for jobs and income.

“I’m very positive about this industry despite the challenges, despite the issues,” Vilsack said at a conference sponsored by Growth Energy, an ethanol trade group. “I want you to know that I’m committed, that the administration is committed. You cannot let one decision . . . slow the process down”

Vilsack, born in Squirrel Hill, said the White House has pledged to boost ethanol production to 15 billion gallons at some point, a figure that requires introducing higher ethanol blends into the fuel supply, boosting exports and expanding the use of the renewable fuel into the military and commercial aviation.

“We just have to figure out the best, most appropriate way to get there,” he said. “I continue to be bullish on this industry.”

The Environmental Protection Agency, which oversees the biofuels program, has proposed slashing ethanol produced from corn to 13 billion gallons compared with 14.4 billion gallons set by Congress for this year. The agency has said the market could not absorb the amount of ethanol required by law. The EPA has hinted it would increase the blending level above 13 billion later this fall, but the agency has not said by how much. Vilsack stopped short of disclosing the increase Tuesday.

Vilsack’s appearance was part of a three-day energy conference in Washington where ethanol supporters met with congressional lawmakers and White House officials to urge them to stay committed to the ethanol mandate known as the Renewable Fuel Standard. The law requires refiners to buy alternative fuels made from corn, soybeans and other products to reduce the country’s dependence on foreign energy.

“We’re not just sitting back waiting on the RFS,” Tom Buis, chief executive with Growth Energy, told reporters shortly after Vilsack’s remarks. “Our message is . . . don’t mess with a program that has been so successful.”

Matt Merritt, a spokesman with Sioux Falls-based ethanol producer Poet, agreed. He said any wavering by Congress or the White House on their commitment to the Renewable Fuel Standard would thwart efforts by his company and others to expand the development of cellulosic ethanol fuel made from crop residue, grasses and wood chips in the United States by chilling new investments.

Poet, which celebrated the opening of its $275 million cellulosic facility in Emmetsburg, Iowa earlier this month — along with its Dutch-based partner DSM — is looking to license its technology to make the next generation of renewable fuel. If the atmosphere is not conducive for growth in the United States, the ethanol giant may focus more attention on growing cellulosic ethanol overseas in Brazil, India and China.

“We’re going to operate in the market that makes the most sense,” Merritt said. “We’re hopeful we’ll be able to expand here in the U.S. but if the market doesn’t allow it we might have to look overseas for that (growth).”

The oil industry, an outspoken opponent of a law requiring ethanol to be blended into the gasoline supply, said the EPA should ignore pressure to increase the level in 2014. The American Petroleum Institute, which represents more than 550 oil and natural gas companies, has said there is not enough demand to justify increasing the amount of ethanol that must be blended this year.

“We remain concerned that, after first proposing to lower the ethanol mandate to better coincide with the realities of today’s gasoline consumption, EPA may raise ethanol requirements,” Bob Greco, API’s downstream director, told reporters on a conference call last week. “The administration must protect consumers and set the 2014 ethanol mandate low enough to allow for non-ethanol gasoline for consumers who want it. The consumers’ interest should come ahead of the ethanol producers.”

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