Corn debate grinds on
Ethanol continues to spark controversy. For many, it represents a means to move away from our nation’s dependency on fossil fuels. Others consider the acres of “fuel corn” wasted, when the land could be used for food crops instead. In addition, production costs could sometimes outstrip what farmers earn for their crops, fueling further controversy. Currently, field corn is subsidized. Under new proposals, it may not be.
Among the fuels being debated are ethanol, biodiesel, renewable diesel, biogas, and bio-heating oil.
Currently, the Environmental Protection Agency (EPA) is accepting comments after the American Petroleum Institute and the American Fuel & PetroChemical Manufacturers requested a waiver from the Renewable Fuel Standards on the basis of an “inadequate domestic supply of renewable fuel.”
The oil industry petitioners claim the current production of renewable fuel will lead to an inadequate supply of gasoline and diesel, increasing fuel prices. These groups ask the EPA to “exercise its waiver authorities” and reduce the required national volume of renewable fuel and advanced biofuel.
The petitioners ask the EPA to reduce the corn ethanol blend to 13 billion gallons in 2014, down from the mandated 14.4 billion gallons.
“This is the first time the U.S. government has bowed to petroleum industry pressure and cut renewable fuel targets, setting a dangerous precedent for the global biofuels industry,” said Bliss Baker, a spokesman for the Global Renewable Fuels Alliance. “... You can not remove over 1.3 billion gallons of fuel from a fuel pool without it having an impact on fuel prices.”
In defense of ethanol
During a Nov. 21 webcast, Renewable Fuels Association President and CEO Bob Dinneen and University of Illinois Clinical Assistant Professor of Law and Policy Jonathan Coppess briefed reporters and answered questions about the requested waiver.
A waiver for adjusting the volume of renewable fuels can be approved for:
•Severe economic causes
•Inadequate domestic supply.
Coppess, who served as chief counsel of the Senate Committee on Agriculture, Nutrition and Forestry and was administrator of the Farm Service Agency at the U.S. Department of Agriculture, questioned Congress’ intent when determining “inadequate domestic supply.”
Dinneen said the waiver would discourage investment in biofuels infrastructure, such as tanks and pumps at service stations. This will limit, even deny, access to renewable fuels by consumers, especially E15 fuel (gasoline with 15 percent added ethanol).
The Renewable Fuels Association estimates infrastructure improvements would be delayed, saving the oil companies $200 million to $400 million to upgrade facilities for ethanol use.
National Corn Growers Association President Martin Barbre agreed with Dinneen’s concerns about infrastructure investment, saying it will “send the wrong signals to automakers who want more direction on where they should be spending millions of targeted investments on research and development.”
The Corn Growers cited the U.S. Energy Information Administration, that “U.S. oil imports have decreased from 60 percent of our total usage to 45 percent. This was due to increased efficiency in our automobile fleet, the recession, and the increased use of biofuels.”
One argument against ethanol is the number of acres of “virgin land” being plowed up for crops, such as corn and soybeans. According to the Renewable Fuels Association, the “2008 Farm Bill cut funding for the Conservation Reserve Program by 20 percent and required farmers to decrease Conservation Reserve Program acreage.”
The association continued, “Congress clearly prohibits cultivation of native, non-agricultural lands ... for making biofuels.” The 384 million acres planted in 2012 is the lowest level since 2007’s level of 402 million baseline acres.
The U.S. corn crop is rebounding from significant losses last year, with record crops of 14 billion bushels estimated.
Only 22 percent of the U.S. field corn will be used for ethanol, said the Renewable Fuels Association, adding that the U.S. ethanol industry uses just 2.95 percent of the world grain supply.
For every bushel of field corn used for ethanol, one-third will be processed into high-protein, high-energy animal feed. Livestock feed is the top use of corn. When distillers’ grain is included, livestock will consume approximately 46 percent of the corn supply. Human consumption involves sweet corn, not field corn.
The Corn Growers Association addressed the 2013 bumper crop, saying the price is comparable to when the Renewable Fuel Standard was first enacted in 2007.
Currently, corn prices are projected at $4.10 to $4.90 per bushel. Last year, the price inched close to the $8.50 record high in 2008.
The Corn Growers Association estimates that farmers need $4.25 per bushel, based on this year’s projected yields, just to cover production costs. “If corn prices dropped to $3.50 a bushel, farmers and the rural economy would lose more than $10 billion,” according to the Corn Growers.
The Renewable Fuels Association said if the proposed plan is approved, U.S. ethanol producers in the United States and the rural American economy would lose $2.1 billion to $3.6 billion in revenue. They also said fuel prices will increase by 5 to 9 cents per gallon or a total increase of $6.8 billion to $11.3 billion.
The Renewable Fuels Association said Nov. 6 that “slashing these RFS [Renewable Fuel Standard] requirements would result in a $9-$14 billion giveaway to Big Oil.”