Grain Bins


Ethanol industry is in ongoing battle

Posted on June 24, 2020

Things never come easy for the ethanol industry.

Even in a time when there’s more awareness than ever about the need for clean and renewable energy, being friendly to the environment and supporting domestic economies, our nation’s policies aren’t very friendly to ethanol.

It seems like every victory is followed by another roadblock.

A little more than a year ago, things were looking up when the Trump administration approved year-round sales of E15. However, a couple of months later, the Environmental Protection Agency (EPA) offset that gain by granting waivers to exempt 31 oil refineries from biofuel blending obligations. That was a slap in the face to the entire agriculture industry, which has been going through challenging times.

The National Corn Growers Association (NCGA) and the ethanol industry appealed the EPA’s decision and fortunately the 10th Circuit Court of Appeals ruled that the EPA’s awarding of waivers to refineries was inappropriate. That was an extremely significant victory.

But just as things were taking a positive turn again, the COVID-19 pandemic struck, crushing demand for fuel both domestically and globally. More than 100 ethanol plants, including a number in South Dakota, were forced to either shut down or cut production.

Now that states, cities and businesses are reopening, people are driving more and ethanol demand is gradually rising. However, a new threat comes in the form of requests from oil-state governors who want the EPA to waive refineries’ blending obligations, arguing that the pandemic is harming the oil industry. That, incidentally, is the very same pandemic that is harming the biofuels industry. This demand by Big Oil is outrageous, nothing more than a backdoor attempt by oil companies to get around the court ruling that denied exemptions. Any waivers would seriously hurt rural economies that have already been hammered.

The oil industry continues to look for ways to bypass federal law. That’s the nature of the beast. Convincing the oil-friendly EPA to grant waivers is the current strategy. In this latest threat to ethanol, the EPA disclosed June 18 that it has received 52 petitions for retroactive refinery exemptions. The agency hasn’t taken any action on those yet.

We say enough is enough. The South Dakota Corn Growers Association (SDCGA) has joined other state corn associations and ethanol organizations in a coalition that is urging President Trump to support the biofuels industry and reject any waiver requests.

The nation’s Renewable Fuel Standard mandates that 15 billion gallons of ethanol must be blended annually. Oil companies must not be allowed to undermine the RFS and that’s what refinery waivers would do. Fifteen billion gallons is 15 billion gallons and we won’t settle for anything less.

This is a critical issue in South Dakota, which has 16 ethanol plants capable of producing more than 1 billion gallons annually. Those plants are vital not only to farmers, but also to rural communities, the workforce and the state’s economy. The state’s ethanol industry employs more than 11,000 people and adds more than $980 million to the gross domestic product, according to a study by ABF Economics conducted for the Renewable Fuels Association.

The SDCGA is fighting for the state’s farmers and ethanol plants. Our congressional delegation is working with us, and we thank them for their support. Our battle against Big Oil and the EPA continues. It’s apparent that this is going to be a long-distance race with hurdles along the way, but we won’t give up.

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