EPA Approves MORE Ethanol Use... (Sorry, No Corn for the People...)

Submitted by SadInAmerica on Sun, 01/23/2011 - 6:12pm.

The U.S. Environmental Protection Agency Friday approved the use of 15 percent blend ethanol for automobiles and light trucks of model year 2001 and newer.  The decision expands on a ruling in October that allowed the increase in blend of ethanol with unleaded gasoline to rise from ten percent to 15 percent.~ Dan Piller

The ethanol industry and corn growers hailed the long-awaited announcement.

National Corn Growers Association chairman Darrin Ihnen of South Dakota called the decision “welcome news,” and said “we are pleased to see the EPA also realized what our industry has know for a long time; that that use of higher blends of ethanol in vehicles is safe.”

Ethanol use is estimated to consume about one-third of the 13 billion bushels of corn grown in 2010. The percentage of corn use for ethanol is higher in Iowa because of the concentration of production plants in the state.

The E15 decision was supposed to be made by mid-2010 but was delayed several times for more testing as automobile and small engine manufacturers raised various concerns and objections. Several lawsuits, including one by the automobile industry, already have been filed to block the EPA’s earlier decision.

Iowa Senator Charles Grassley said “I’ve been frustrated with the amount of time it’s taken the EPA to reach these decisions and I’d still like to see a waiver for E15 use in all vehicles, but I appreciate that the EPA Administrator has made certain to base the decisions on sound science.”

The immediate impact of the EPA decision is likely to be modest because of t he pending lawsuits and also the fact that most retailers will  have to reconfigure their pump and storage tank systems to accommodate another fuel blend.

The commodity markets were less excited about the E15 decision than than they been earlier on U.S. Department of Agriculture reports of smaller crops. At noon the March contract for corn was up 6 cents per bushel to $6.60.

The environmental group Friends of the Earth called the EPA decision “a New Year’s gift to corporate ethanol interests that is bad for consumers and bad for the environment.”

Even so, the decision will be a victory for the ethanol industry, which is coming off a strong year in which it produced 13 billion gallons of corn-fed fuel for U.S. motorists.

Ethanol producers had decried what they called the “blend wall,” or the allowable limit the earlier ten percent limit imposed against annual U.S. gasoline consumption of about 130 million gallons.

About three-quarters of all unleaded gasoline now sold in the U.S. is blended with ethanol. Some states have mandated ethanol use, although the Iowa Legislature last year declined to impose a mandate here.

Ethanol is boosted by other government policies, such as a stair-step requirement that ultimately 36 billion gallons of gasoline sold in the U.S. must come from biofuels. The EPA also mandates special blends for use in large urban areas during summer to lessen thermal inversions, and ethanol currently is the only such non-fossil fuel additive.

The executive secretary of the Iowa Renewable Fuels Association, Monte Shaw, said the wider application of E15 “will put the higher blend in about 65 percent of the gas tank capacity in the U.S.”

Iowa is the nation’s largest producer of ethanol, with 41 plants that last year produced 3.7 billion gallons of the 13 billion gallons of ethanol produced nationally. About half of Iowa’s 2.3 billion bushel corn crop is expected to be used for ethanol production.

The economic value of ethanol to Iowa, including the sale of the byproduct distiller grains used as cattle feed, is estimated to be at least  $10-$12 billion annually.

The decision is also likely to touch off a renewal of the debate over the use of corn, the nation’s biggest grain commodity crop by dollar, as a feedstock for motor fuels.

The rise in the price of feed grains and livestock since mid-2010 has renewed predictions of higher food costs this year. U.S. agriculture has received criticism in recent years for being on the wrong side of the “food versus fuel” debate, and in 2008 the U.S. grocery industry added its voice to critics of use of corn for fuel.

Iowa is the nation’s largest producer of corn, with a crop that this year carries a cash paper value of almost $15 billion, nearly double the $8.5 billion value it bore in mid-2010 before the corn price boom.

Opposition to E15 has been included livestock feeders, who already have seen their feed corn cost rise from less than $4 per bushel last summer to $6.50 this week because of tight supplies in the U.S. and shortages worldwide.

“Livestock feeders had a good year in 2010, but things will be more difficult for them in 2011 because of the higher feed costs,” said Chad Hart, agricultural economist at Iowa State University.

Ethanol producers know they have their work cut out for them to create a retail pump infrastructure and consumer acceptance for E15.

Bob Dinneen, president of the Renewable Fuels Association’s national group, said “EPA’s decision today is a sound one, but it doesn’t address the issues that still remain regarding a segmented market place and the introduction of a new fuel,” said Dinneen.

The National Marine Manufacturers Association, which had opposed the E15 expansion, said much the same thing, saying “while both partial waivers exclude marine engines and other onroad engines such a snowmobiles, lawn and garden equipment, we continue to be concern that the EPA does not plan to take significant steps to address anticipated problems with consumer confusion and the risk of misfueling.

Similarly Poet, a major ethanol plant manager out of Sioux Falls, S.D., said “significant hurdles remain before consumers can start using E15.”

Poet and the new ethanol  advocacy group it help found, Growth Energy, last year suggested that the 46-cent tax credit for ethanol blenders (which goes to refiners and pipeline companies, not to producers) be abolished in favor of support for a new ethanol infrastructure of storage tanks, pipelines and fuel dispensers.

 

Dan Piller - January 21, 2011 - DesMoinesRegister

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Submitted by SadInAmerica on Sun, 01/23/2011 - 6:12pm.

Comments

Anonymous (not verified) | Wed, 01/26/2011 - 11:24am

If you take the corn that has been used for making the alcohol and let it dry then feed it to the cattle. This makes the cattle gain weight and the meat more tender if used for that. This is propaganda that the Rockefeller has been promoting because of their stocks in the oil market. Fermenting just uses the starch of the corn and tenderises the rest.

You can also use sugar and molasses to make alcohol and if you buy it from Mexico for 2 cents a pound then no one loses nothing except "big oil".

Do a little research and get off the fluoride :(