BLOOMINGTON, Ill. — The Illinois Corn Growers Association
hosted a telephone town hall meeting to convey concerns over the impact of the
proposed Renewable Fuel Standard reduction in ethanol levels.
The U.S. Environmental Protection Agency proposal reduces
the Renewable Fuel Standard statutory levels for ethanol to 13 billion gallons
from the 14.4 billion-gallon goal previously set for 2014.
“The (RFS) and ethanol is under attack. Therefore, your corn
demand and farm profitability is at risk,” said Gary Hudson of Hindsboro,
The 10 percent reduction of ethanol in the U.S. gasoline
supply equates to 500 million bushels of lost corn demand.
“In a year when we have such a large carryout and the corn
price is already depressed below the cost of production — down over 40 percent
the last year — that just bad news,” Hudson said.
“The RFS has been a huge success, and it has created a lot
of jobs and driving a lot of investments in our rural areas and sparks new
businesses across our state.
“Ethanol is being produced right here in Illinois from corn
grown by local farmers. That means that the money we spend producing ethanol
stays right here in Illinois instead of being sent overseas to pay for foreign
Reducing Oil Imports
Bob Dinneen, Renewable Fuels Association president, said
when the RFS was passed by Congress in 2005, more than 60 percent of U.S. oil
“Today, in large part because of the Renewable Fuel
Standard, we’re only 35 percent dependent and getting better with each new
ethanol plant that opens up,” he said.
A study conducted by an oil industry analyst concluded that
ethanol also has reduced the price of gasoline by at least 50 cents per gallon.
Dinneen cited an independent analysis that suggested the
impact of reducing the RFS level would reduce corn prices between 25 to 40 cents
“That could be the difference between profit and loss for
many farmers because it could potentially drive the price of corn below the cost
of production. That’s not right,” he said.
“We’re coming off the single-largest corn crop in history.
You folks have done your job and it is more important than perhaps it has ever
been to maintain the value-added market for farmers, to keep the (RFS) in place,
and I would ask you to please let EPA know that this is a program important to
U.S. corn for grain production in 2013 was estimated at a
record 13.9 billion bushels, and Hudson addressed a question regarding the
impact of taking 500 million bushels out of ethanol production.
“I can look around our neighborhood and find piles of corn
lying on the ground. That means the bins are already full,” he said.
“At some point in time we’re going to have a find a place
for that corn, and we may have to let it sit around for a year and use it the
next year. Eventually farmers are going to have to quit growing corn.”
Food Price Hike Disputed
Claims that ethanol is related to higher food prices were
rebuffed by Hudson, noting corn prices spiked last year due to the drought yet
there were no large increases in grocery prices.
“Now that the price of corn is basically the same price it
was back in 2007 when the RFS was put in place, the price of corn has had no
affect whatsoever on the price of food,” he said.
“The price of food is made up mostly from the processors and
the transportation. The transportation has mostly fuel (costs) in it. So, in
essence, by producing ethanol and reducing the price of fuel, we’re actually
decreasing the price of food.”
“The World Bank did a report last summer that said most of
the cost of food is attributable to the skyrocketing price of oil. So the notion
that ethanol in increasing the price of food is simply not accurate,” Dinneen
One caller asked why the EPA is making this move and if it’s
“a kickback for oil.”
“It’s hard to believe that this administration would cater
to the oil company in this fashion. I believe the administration is still
committed to the rural economy benefits of ethanol,” Dinneen said.
“I think they’re still committed to the environmental
benefits of biofuels. This is the only program that we have that is reducing
greenhouse gases today.
“I think they’re still committed to biofuels, but they seem
to have gotten scared by oil companies that believe there’s a cost to this
program, that somehow using ethanol in gasoline was going to drive up the price
of fuel, and any administration is hypersensitive to gasoline costs.”
The Renewable Fuels Association continues to work with the
Obama administration to demonstrate that the current RFS is driving down
“The (RFS) was really progressive and thoughtful
legislation. It put the United States on a course to reduce our dependence on
oil, to innovate our transportation fuels, to give consumers options, and has
been working just fine,” Dinneen said.
“That’s why many of us are bewildered for EPA suddenly
deciding ‘No, we don’t want to recognize the success that this program has been
and want to roll it back.’”
The environment also has benefited from increased ethanol
use by reducing carbon monoxide, hydrocarbons that form ozone, particulate
matter and other criteria pollutants, as well as the corn plant’s absorption of
“The amount of ethanol that was produced last year was the
equivalent of taking some 36 million vehicles completely off the road,” Dinneen
“If EPA succeeds in rolling back on biofuel use and succeeds
in reducing the amount of ethanol that’s put into gasoline, we’ll be backsliding
on the environment. There will be more (carbon dioxide) in the air next year
compared to this year, and that doesn’t make any sense.”
“Production of renewable fuels has been growing rapidly in
recent years. At the same time, advances in vehicle fuel economy and other
economic factors have pushed gasoline consumption far lower than what was
expected when Congress passed the (RFS) in 2007,” the EPA stated in its
“As a result, we are now at the E10 blend wall, the point at
which the E10 fuel pool is saturated with ethanol. If gasoline demand continues
to decline, as currently forecast, continuing growth in the use of ethanol will
require greater use of higher ethanol blends such as E15 and E85.”