Producers Panic as Ethanol Mandate Loses Support | OilPrice

GE Comment: It is high time that this asinine program be demolished. Like AGW and the carbon scare, the greens and sheeple were duped by corporate ag into believing that pouring topsoil, RoundUp and tractor fuels into the gas tanks on their Honda Accords would ‘save’ the planet. Facts are, indeed, stubborn things.

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Source: politicalclimate

Ethanol producers are panicking amid speculation that the ethanol mandate could be drastically reduced or scrapped entirely this year as the biofuel loses its allure and bipartisan allies and former friends team up against it.

December saw California Democrat Dianne Feinstein—a renewable fuel champion–coordinate efforts with Oklahoma Republican Tom Coburn to come up with a Senate bill to get rid of ethanol from the Renewable Fuel Standard (RFS), citing fears that corn-based fuel production mandates will harm livestock producers.

In November, Washington proposed cutting the biofuels mandate for 2014 by 16% to 15.21 billion gallons. This would be the first cut in biofuels requirements, which were ideally set to grow each year with incremental increases in renewable fuel targets laid out in a 2007 law.

For renewable fuel targets, this represents a major setback because not only is 15.21 billion gallons for 2014 much less than the originally intended 18.15 billion gallons, it is also less than this year’s mandate of 16.55 billion gallons.

Two years ago the Environmental Protection Agency (EPA) approved the E15 blend, which contains 15% ethanol and 85% gasoline, for vehicles manufactured in 2001 or later. There has been little progress towards widespread use of E15 though, and today’s blend is commonly E10.

The problem is that the RFS set its parameters too far ahead and predictions are a tricky thing. Flexibility is necessary and this is being learnt the hard way and will certainly have repercussions and this initial lack of flexibility—of RFS ranges—was a policy misstep on the part of the Environmental Protection Agency (EPA).

The problem is that the current and future ethanol mandates were created back in 2005 with the Renewable Fuel Standard (RFS), at a time when gas demand predictions were expected to be different. Now we have better fuel economy and demand for gas that is increasing slower than forecast.  In 2007, it looked like gas demand would continue to rise every year; instead, it peaked in 2008.

Beyond that, poultry companies are going bankrupt due to rising prices of feedstock as crops are diverted to ethanol. The rising costs of farming and egg production are taking their toll on states like Minnesota.

On the other side of this divide we have the biofuels producers for whom uncertainty is rising fast as a resolution on the ethanol mandate looms. States like Iowa are leading the lobbying here because they have been reaping the benefits of all that demand for corn. This has come along with new jobs. Iowa will certainly baulk at the proposed cuts because the bulk of US biofuels are made from corn, with soybeans, grasses, crop waste and Brazilian sugarcane playing lesser roles.

The Iowa Renewable Fuels Association is balking at the new bill before the Senate. The recent launch of a new wet mill and three cellulosic ethanol plants slated to begin production in 2014 had raised high hopes of further growth.

“Iowa ethanol production was up in 2013, but not enough to round the decimal point. With the record U.S. corn harvest in the bin and new production facilities coming on line, there is hope that Iowa can once again expand ethanol production,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association. “But hanging over that potential like a gray cloud is the EPA proposal to cut the RFS (Renewal Fuel Standard).”

By. James Stafford of Oilprice.com

3 thoughts on “Producers Panic as Ethanol Mandate Loses Support | OilPrice

  1. Brittius 01/03/2014 / 8:44 AM

    Reblogged this on Brittius.com and commented:
    I remember 29 cents per gallon for 101+ octane leaded gasoline. Today, ethanol is a scam. Politicians are bribed.

    Like

  2. thetinfoilhatsociety 01/03/2014 / 12:39 PM

    I agree it needs to go away. The EROEI was far too high for this to ever be anything but a give away to agribusiness via the subsidies. But there is a problem as well beyond the subsidy. GM corn has been so drastically changed from its original form as to be inedible to cattle. It used to be, as recently as when I was a child, that the farmer could effectively get two crops from corn – the corn itself, and the stalks as silage. That’s no longer true. Because it’s been fiddled with to be indestructible to the gigantic machines that harvest it, it’s so tough that it can’t be fed to livestock any more. It’s not edible. And that is so incredibly wasteful I can’t find the words to describe it. It won’t even compost into fertilizer for future crops, for cripes sake!

    Subsidies for agribusiness – but not necessarily agriculture – need to be done away with entirely. Yes, I know that would drastically raise the cost of food. The food however, would merely reflect the REAL costs involved with food production, as it is with organic agriculture presently. It would also create a lot of jobs in the form of farm workers – semi skilled workers with a knowledge of machinery and of livestock. You can’t do large scale traditional agriculture as we do agribusiness now, it requires human eyes and human management on a daily basis. Not a computer programmed apparatus. No, I don’t mean farming like the Amish – but growing corn that HAS to be harvested by a gigantic computer controlled combine just doesn’t make sense because of the waste involved, in terms of the damage to the topsoils, the amount of pesticides that must be applied, the compaction of the soil from the massive weight of the harvesters, the inability to use the silage for anything, the amount of fossil fuels involved in maintaining and running one of those beasts, and so on….

    Like

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