November 2, 2016
By Donelle Eller
Ethanol foes are expected to face off again over the federal mandate that requires ethanol and biodiesel to be blended into the nation's fuel supply later this month.
The U.S. Environmental Protection Agency is supposed to release its final Renewable Fuel Standard rule by the end of November.
The agency has been listening to arguments from oil, renewable fuel, environmental groups and others on where the standard should be set since May, when it released its proposed levels.
It's a decision that's critical to Iowa, the nation's largest producer of both biodiesel and ethanol.
The federal agency's proposed rule recommends increasing:
- Ethanol made from corn to 14.8 billion gallons in 2017, 300 million gallons more than this year. Still, it falls short of the 15 billion gallons outlined in the federal law, says Monte Shaw, executive director of the Iowa Renewable Fuels Association.
- Cellulosic ethanol made from grasses, wood chips and corn stalks to 312 million gallons, 82 million more gallons than this year. Iowa is home to three cellulosic ethanol plants, in Galva, Emmetsburg and Nevada.
- Biodiesel made from soybean oil, cooking oil and animal fat to 2.1 billion gallons in 2018, inching 100 million gallons higher than the levels required in 2017.
While most gasoline purchased nationally is E10 — 10 percent ethanol and 90 percent gasoline — Shaw said U.S. motorists are getting more comfortable buying higher ethanol blends, such as E15 and E85.
Ethanol's share of the U.S. gasoline market has pushed past 10 percent a couple of times this fall, according to the U.S. Energy Information Administration.
"We already exceeding the blend wall," Shaw said.
The blend wall is a threshold that occurs when the required blending volume exceeds the amount that can be added into most gasoline.
Congress created the Renewable Fuel Standard in 2005 and expanded it in 2007 as part of an effort to reduce the nation’s dependence on foreign oil and curb greenhouse gas emissions.
The EPA has said it has the legal authority to adjust the numbers to below what Congress intended.
The EPA said in 2011 that E15 is safe to use in cars and trucks built since 2001. E85 can only be used in flex-fuel vehicles.
Kum & Go's Kristie Bell said she was among those concerned about using E15, but decided to take advantage of the convenience store chain's promotion this fall offering the higher ethanol blend for $1.15 a gallon.
"People are hesitant to try something new," said Bell, adding that the West Des Moines-based company had employees available to answer questions. E15 is about a dime cheaper than E10.
Gov. Terry Branstad has been critical of the EPA and Obama administration over the Renewable Fuel Standard.
He's blamed part of the fall in corn prices on the EPA's failure to set the renewable fuel mandate to levels outlined in the 2007 federal law.
"This administration has really reneged on its commitment to a strong Renewable Fuel Standard," Branstad said recently.
Chad Hart, an Iowa State University economist, said the mandate's lower levels probably hasn't impacted corn and soybean prices much.
"What EPA has enforced has a relatively small reduction in prices for corn," he said.
The Environmental Working Group said the renewable fuel mandate "will make air pollution worse and push farmers to grow corn for fuel instead of food."
The proposed standard "continues a wrong-headed policy that promotes a fuel that is bad for the environment, rather than pushing the market toward better renewable fuel options,” said Emily Cassidy, a research analyst at the Environmental Working Group.
Read the original story: Ethanol Advocates, Opponents Brace for Ruling