The Hagstrom Report

Agriculture News As It Happens

Ethanol coalition optimistic for 2012

Leaders of Growth Energy, the ethanol coalition, painted a positive portrait of the industry going into 2012 in a call to reporters today, even though the ethanol tax break and protective tariff will expire on Dec. 31 and there are campaigns to get rid of the renewable fuel standard.

Tom Buis, Growth Energy
Growth Energy CEO Tom Buis noted that the ethanol industry had an all-time record on exports and has become more efficient, noting that there had been reductions in the use of water and energy and that corn productivity had risen.

Buis also noted that Growth Energy had proposed an end to the tax break because the benefits go more to the blenders and consumers than to producers.

Growth Energy failed to achieve its goal of convincing Congress to use some of the money from the tax break to subsidize blender pumps so that ethanol would be available in more markets, but Buis said that the ethanol industry was “in the same boat as everyone else” with Congress not acting.

Growth Energy President Jim Nussle, a former Republican House member from Iowa, was more critical, saying that Congress “blew it” by not adopting the industry’s proposal.

Although the industry is proud of its exports, particularly to Brazil, Buis described the importation of ethanol from Brazil to California as part of a “wacky system” of import and export. He noted that Brazilian ethanol from cane sugar is considered an advanced biofuel, while U.S. corn-based ethanol does not qualify for advanced fuels status “because we were given a phony number for international indirect land use.”

Going forward, Buis said the ethanol industry’s greatest challenge is “access to an open, fair, competitive marketplace.”

He noted that the Environmental Protection Agency had made “the first crack in the blender wall” by its January approval of E15, which contains more ethanol than E10, for vehicles built in 2001 or later, but that E15 still faces a number of hurdles. Buis said the next approval is based on a test of health effects, which is expected to show that E15 is less polluting than E10.