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Grassroots Voice: Summer Brings Opportunities for Ethanol
by Brian Jennings

A year after oil and corn prices hit record highs and the resulting unprecedented market volatility and credit crisis harmed the U.S. economy, including the ethanol industry, we’re beginning to see “green shoots” of a recovery now – and some opportunity for ethanol.

First, blending economics are driving demand for ethanol. As of this writing, gas prices have climbed for nearly 50 consecutive days, bolstered by oil prices that have risen to about $70 per barrel. This has helped create profit opportunity for ethanol producers.

Second, President Obama has issued a White House Directive to, on a very aggressive timetable, make biofuels a greater priority for his Administration. This includes creating a cabinet-level Biofuels Working Group which will make retail market development a priority for the first time, and will force EPA to make its recent predictions about the carbon intensity of biofuels subject to scientific peer review and scrutiny. ACE has reached out to the President, calling for blender pumps to play a central role in the market development program.

Third, the President declared that ethanol is the most effective way to reduce gas prices and oil dependence, and he importantly said that artificial barriers to the market must be removed so both corn ethanol and next generation biofuels can succeed. This point was reinforced by an unlikely source – Lamar MacKay, Chairman of BP America – who was quoted as saying, “We’ve reached peak demand for gasoline. Part of it is efficiency and part of it is biofuels penetration.”

The President’s statement that artificial barriers must be removed speaks directly to our collective request to EPA for approval of up to E15. I have great confidence the Administration will approve something above E10 by the end of the year, a step that will provide both a psychological and economic boost for ethanol. ACE is fully engaged on these issues, meeting with EPA on higher blends and testifying before Congress on “international indirect land use changes.”

While testifying recently before a Congressional committee, I exposed the flaws in the theory of international indirect effects, particularly that the predictions of ethanol causing deforestation are not corroborated by real-world measurements. ACE also pointed out that EPA should more carefully consider that distillers grain replaces corn and soybean meal in livestock feed rations, and that if proper credit is given to distillers grain and increasing corn yields, it mitigates the need to expand the global crop base through land use changes. A full copy of ACE’s testimony can be found at Ethanol.org.

ACE remains focused on strategic grassroots advocacy this summer in addressing these significant issues, and I encourage you to help us stand up and fight for what we know is right.

 
© American Coalition for Ethanol, all rights reserved.
The American Coalition for Ethanol publishes Ethanol Today magazine each month to cover the biofuels industryís hot topics, including cellulosic ethanol, E85, corn ethanol, food versus fuel, ethanolís carbon footprint, E10, E15, and mid-range ethanol blends.
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