The Environmental Protection Agency answered a question with its recent decision to maintain production requirements for corn-based ethanol, but it didn’t settle the debate.
The governors of 10 states, not including Nebraska and Iowa, and a coalition of livestock poultry and dairy organizations asked the federal agency to remove the Renewable Fuels Standard mandate that 13.2 billion gallons of corn-based ethanol be produced this year and 13.8 billion gallons in 2013.
Gasoline blenders are required to add that much ethanol to their fuel each year, most often in a 10 percent-90 percent ratio of ethanol to gasoline. Ethanol reduces dependency on imported oil, is a renewable fuel, is cleaner than petroleum and its production bolsters the economies of many Midlands communities.
The argument against the ethanol mandate cited the recent drought, suggesting that if short corn supplies continued to be turned into ethanol, some states’ economies would be damaged. Not, of course, the states that produce ethanol in quantity, such as Nebraska and Iowa, but states such as Utah, Maryland, Texas and North Carolina.
The contention behind that argument is that diverting corn to ethanol production in itself raises the per-bushel price of corn. The EPA disproved this notion by citing economic analyses by the U.S. Department of Agriculture, which showed that, on average, waiving the ethanol mandate would reduce corn prices by just 1 percent, according to statistics quoted in the High Plains Ag Journal.
Todd Sneller, administrator of the Nebraska Ethanol Board, noted that Nebraska ethanol plants produce byproducts that can be added to poor-quality grasses, hay or silage for cattle, pork and poultry feed. That actually helps mitigate the effects of the drought, he suggested.
“From a Nebraska standpoint,” he said, “it’s important we produce ethanol because it yields fuel and feed byproducts, which make Nebraska livestock more competitive.”
The Ag Journal also noted that the USDA conducted analyses of the energy sector in conjunction with the Department of Energy; those findings indicated that waiving the mandate would have no effect on household energy costs.
The ethanol industry supports more than 400,000 jobs nationwide, according to Pam Johnson, president of the National Corn Growers Association and an Iowa corn farmer.
The industry has already faced the challenge of a canceled tax credit implemented Jan. 1 of this year by the federal government. Before that, the government paid 45 cents per gallon of ethanol to the oil companies that blended the alternative fuel into gasoline. Removal of the credit shook up the ethanol industry — production fell 14 percent this year, according to Department of Energy data — and slowed its explosive growth but hasn’t killed it.
Both Nebraska and Iowa have benefited in numerous ways from the ethanol industry. The EPA’s decision was a welcome one in corn-ethanol country.