WASHINGTON, Feb. 17, 2016 - Despite challenges that continue to plague the ethanol industry, eternal optimism abounds at the 21st National Ethanol Conference in New Orleans this week.
“At a time when margins are slim, the din from our detractors deafening, and the policy framework for biofuels threatened again by an Environmental Protection Agency that ignores the law – I can say with confidence that the state of the ethanol industry remains strong,” said Renewable Fuels Association president and CEO Bob Dinneen in his state of the industry address on Tuesday.
Nearly 1,000 ethanol industry representatives are attending the conference, which is focused on the theme of “Fueling a High Octane Future.” The latest economic report shows that the U.S. ethanol industry added $44 billion to the nation’s gross domestic product and supported nearly 360,000 jobs in 2015. “Margins may be tight, but you remain committed to your communities and are making an immeasurable difference in the lives of your neighbors and the pocketbooks of all Americans,” Dinneen told the attendees.
Keynote speaker John Hofmeister, former president of Shell Oil Company and founder of Citizens for Affordable Energy who wrote a book called Why We Hate the Oil Companies, helped increase the level of optimism with some straight talk from an energy insider.
“Oil is a contrived market,” Hofmeister said, talking about the current state of low oil prices and how Iran and Russia are impacting the situation with Saudi Arabia. “This is a contrived situation that has been created because of geopolitical considerations…and which can’t last very much longer.”
“What does this have to do with ethanol?” asked Hofmeister. “I think it has everything to do with the United States’ absolute requirement to become fully energy independent to not be the victim of a contrived oil market.”
Hofmeister questioned why the United States imports seven million barrels of oil a day instead of developing “the alternative fuels we have in this country that can dismiss any dependency on foreign oil forever.”
A very bright spot in the ethanol industry right now is the expansion of availability for higher ethanol blends, especially E85, thanks in a large part due to the USDA’s Biofuel Infrastructure Partnership (BIP) grant program which is expected to nearly double the number of fueling pumps nationwide that offer higher blends. That, however, is tempered by the fact that automakers have begun to limit the number of Flex Fuel Vehicle models it produces as the government phases out CAFE credits for producing FFVs, which are the only vehicles that can use ethanol blends up to 85 percent.
As a result, RFA has launched a new campaign to help consumers and the industry voice support for FFVs. RFA vice president of industry relations Robert White says the “Flex my Choice” campaign “will send a clear signal to the automakers, their auto dealerships, and the EPA that there is a real demand on the part of consumers for more vehicle choices, more choices at the pump and increased access to higher ethanol blends.”
Agriculture Secretary Tom Vilsack, making his fourth appearance at the conference, was asked about the situation. “We’ll be happy to work with the EPA to encourage Detroit to continue to produce these flexible fuel vehicles, which creates the demand and the opportunity,” he said, during a press availability at the conference.
“And I think if we educate consumers, they will also put the pressure on Detroit to continue to make cars that will take advantage of this lower priced fuel.”
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