If farmers want to avoid a crisis from overproduction of corn, they and consumers need to urge fuel sellers to offer higher blends of ethanol.
That’s one message a group of biofuels experts offered at the 2017 Iowa Ag Summit in Des Moines on August 5.
“Every gallon we expand we’re taking away gallons from arguably the most powerful industry in the world,” said Brooke Coleman, executive director of the Advanced Biofuels Business Council, referring to the petroleum industry. That’s why the 2007 energy law that created the Renewable Fuel Standard was needed — to open up a market for biofuels.
“We are not blessed with a free market in motor fuels. We have OPEC controlling price,” he said.
Coleman is pleased with a court ruling that overturned an Obama administration EPA rule that limited expansion of biofuel blending on the basis of limited capacity to blend more. The Trump administration has returned the mandate for corn-based ethanol to 15 billion gallons for 2018 but has slowed incentives for advanced biofuels like cellulosic ethanol, he said.
When the RFS was created, it was meant to be an incentive for oil companies to blend ethanol into gasoline; it was viewed as a floor starting at 10%, said Dave VanderGriend, president of ICM, a company that builds ethanol plants.
“What it turned into is more of a celing,” VanderGriend said.
The future looks bright for ethanol, he said, “if we can get the people out there demanding higher blends of ethanol at the pump.”
Doug Berven, director of corporate affairs for ethanol producer POET, agreed on the need for higher blends.
One reason the ethanol industry faces opposition to them is that “our competitors have spent hundreds of millions of dollars casting doubt in the minds of consumers,” Berven said.
In Brazil, cars run on 27% ethanol blends, VanderGriend pointed out.
“If in fact, ethanol was so bad, Brazil should be a junkyard,” he said.
That blend is widely used in Brazil, even in small engines running weed trimmers, he said.
The panelists warned that U.S. corn farmers face greater competition from producers in countries like Brazil, as well as increasing yields in the U.S., trends that could bring another farm crisis.
“There’s one thing that can soak up surplus grain right now, and that’s biofuels,” said Berven.