WHY ETHANOL?

I’d be lying if I said that I’d never heard THIS question before.  Why ethanol?  What’s the point?  Why is our government pushing it?

1. Our government isn’t pushing it.

no ethanol mandateThere’s actually no mandate for ethanol, despite everything you’ve ever heard in the media and the internet.  The Renewable Fuels Standard (RFS) does not mandate the use of corn ethanol or any other type of ethanol.  The RFS does require that oil companies blend increasing volumes of renewable fuels, but does not specify the type of renewable fuel.  Corn-based ethanol has been ready to take on the increasing demand for renewable fuel and was well-poised to grow, when other types of renewable fuel just aren’t there yet.  They are more expensive to produce and don’t net nearly enough volume to meet the renewable energy requirements.

2. What’s the point?  High octane, low carbon fuel.

It’s good for the environment and it’s good for your car.  Auto manufacturers like it because it provides the power they need for the features you want, while also meeting the environmental requirements the government and the public has asked for.    And it’s cheaper than gasoline and many other options.

3. Why ethanol?  It makes sense.

renewable fuel, E85, corn based ethanolForget everything you’ve heard about ethanol.  Forget the “energy balance” argument (which isn’t true).  Forget the “bad for the environment” argument (which isn’t true).  Forget the “heavily subsidized” argument (which isn’t true). Forget the “food vs. fuel” argument (which isn’t true).

Ethanol is a great, environmentally friendly, high octane fuel that makes sense for our country.  And as a bonus, it is Made in America and creates economic activity for rural America.

Mitchell_LindsayLindsay Mitchell
ICGA/ICMB Marketing Manager

5 THINGS ABOUT THIS PHOTO: WHAT IT MEANS TO DRIVE A FLEX FUEL VEHICLE

We’ve got some great photos in the IL Corn library – photos that speak volumes about what we do and who we are as an organization as well as who the farmers are that we serve! This week, we’ll feature a few of those photos as well as share the lessons you can glean from them!

What it means to drive a Flex Fuel vehicle

IMG_00561.This is a photo of a Ford F-150 Flex Fuel truck that one of our board members currently drive. Flex Fuel means the vehicle can run on an array of combinations of gasoline and ethanol. The blends you will most likely see at your local fuel station range from E10 to E85. This acronym indicates the percentage of ethanol blended with the gasoline, 10% to 85%.

2.What is ethanol? Ethanol is an alcohol made from renewable resources such as corn and other cereal grains, food and other beverage wastes and forestry by-products. The corn-based substance is added to gasoline to reduce oil imports, reduce emissions, increase performance and reduce overall costs of transportation fuels.

3.Illinois Corn supports higher blends of ethanol in our gasoline because the higher blends create a higher demand of corn ethanol. Ethanol is made in the USA. Because ethanol is homegrown, every time you purchase it, you are buying local and supporting our farmers right here in Illinois.

4.One bushel of corn produces 2.8 gallons of ethanol in addition to several valuable food and feed co-products. Using only the starch from the corn kernel, the production process results in vitamins, protein, corn oil fiber and other by-products that can be used for food, feed and industrial use.

5.Ethanol is also cleaner burning and environmentally friendly. It reduces pollution risks for the environment and since ethanol has cleaner emissions, there are less greenhouse gases in the atmosphere that are responsible for climate change.

ALL WE WANT FOR CHRISTMAS: FUEL PUMP STANDARDIZATION

dear santa

 

 

It’s become a tradition and we aren’t stopping now!  Want to know what’s on IL Corn’s Christmas list this year?  We’re hoping Santa brings us …

 

 

4. Fuel Pump Standardization

Ethanol, and the policy changes we want related to ethanol are so complicated, huh?

But not this time.  This time, what we want is pretty straightforward.  This time, all we want is fuel pumps that are able to pump higher blends of ethanol.

ethanol ghg emissionsYes, the pumps at the gas stations.  The pumps that you pull your car up to when you fuel up.  Those are all certified to pump various fuels – the diesel pump to pump diesel and the gasoline pump to pump gasoline with up to 10% ethanol.  What we really want is for every pump to have the capability to pump gasoline with higher percentages of ethanol.

It isn’t such an extreme request, is it?

What we want is for fuel pumps to have the capability to pump more ethanol.  We want higher blends of ethanol to be a choice for consumers who care about the environment.  We want more ethanol to be an option for Americans who want or need cheaper fuel.  We want service men and women to be able to fill up with more of the fuel that doesn’t send them overseas into wars over oil.

Our fuel pump standardization plan is simply to begin now installing pumps that can handle higher blends of ethanol so that when and if retailers want to sell higher blends of ethanol, we’re ready.

Is that such a crazy request?

It seems really logical to me and something that Santa should have no problems delivering.  What do you say, big guy?

Mitchell_LindsayLindsay Mitchell
ICGA/ICMB Marketing Manager

 

 

We also want:

5. Better relationships with our customers – overseas and domestic

3. A Functioning State and Federal Government

2. More Stable Farm Profitability

 

IN RESPONSE TO THE EPA’S ANNOUNCEMENT YESTERDAY …

If you didn’t hear, the EPA announced the final RVO (Renewable Volume Obligation) numbers yesterday.  The numbers indicate the amount of ethanol we have to use in 2014, 2015, and 2016.  In reality, the RVO numbers are a bit more complicated than that, but for the sake of simplicity, we’ll move on.

The numbers the EPA released still fall short of the numbers Congress approved in 2007.  For those that don’t understand, it might feel like the EPA knows something you don’t know – like that ethanol is really bad for the environment or that ethanol hurts American pocketbooks.  

That couldn’t be further from the truth.  

Read on to my previously posted “Why Ethanol Mandates” to help you understand the politics behind the EPA’s decision.  

WHY ETHANOL MANDATES?

Most Americans don’t like mandates.

As Americans, we typically believe in capitalism and a business model that sends products out into the world and asks them to stand on their own two feet or die trying.  Yet, farmers have continuously asked for ethanol mandates and I know that’s confusing.

It’s a complex issue – aren’t they all?  You’ll have to stick with me, but I know we’ll come out at the end much smarter …

1. Gas Stations are largely owned by or on contract with “Big Oil.”

rfs lowers costs at the pumpThere are a few locally owned gas stations – in Central Illinois a company called Qik N EZ is popular and those stations do not apply here – but most stations are owned or on contract with the big oil refiners like BP, Shell, or Mobil.

BP, Shell, and Mobil have a significant interest in petroleum-based fuels.  I think we can all agree on that.  And if they don’t own the station, they spell out the terms in a contract that ties the hands of the local owner and doesn’t allow him to make all his own decisions regarding the fuels he can offer.

2. “Big Oil” wants to protect its market.

Of course.  This makes sense.  If I’m a company in the business of refining and retailing petroleum-based fuel, then I obviously want to protect my market and continue making money off petroleum-based fuel.

No one begrudges the oil industry for their self-preservation.  It’s the American way and exactly what we’d expect any other industry to do.

FYI – Exxon Mobil made $4.9 billion in the first quarter of 2015 for reference.

3. But “Big Oil” has little interest in the ethanol industry.  Anything more than 10% ethanol is a competitor.

In a different world, if we were writing a different story, the oil industry would have seen the potential for corn-based ethanol and invested heavily.  If that were the case, we’d be fighting some other battle right now because “Big Oil” would want to see ethanol succeed.  But that didn’t happen.

As it stands, we have a corn-based fuel and a petroleum-based fuel fighting for market share.  Cost of production and cost to the consumer ends up being a huge player in who will succeed.

Ethanol is cheaper and cleaner with better performance so we are poised to win.  But …

4. All those gas stations are owned or contracted with “Big Oil” so they won’t allow ethanol* to be sold.

flex fuel pumpYou know what?  This makes sense too.  It’s sort of like asking Kroger to sell Wal-Mart products out of the goodness of their heart when we all know that the Wal-Mart prices are going to be cheaper.

Selling cheaper corn-based fuel is not in the best interest of the oil industry who wants to protect its market and profit, even though selling corn-based fuel is in the best interest of Americans who want to save money, protect the environment, and not send their sons and daughters overseas to fight for oil.

5. Here’s where the mandate comes in.

It’s not the best option, but America isn’t a Utopian society.  Since selling ethanol* doesn’t make sense for the oil industry and they won’t do it just to be nice (who would?), we have to make them sell it because it’s better for the country.

By the way, the “mandate” is more commonly referred to as the RFS – the Renewable Fuel Standard.  It’s a piece of legislation that forces retailers to sell increasing amounts of ethanol every year because Congress understands that ethanol is good for America.

6. And all those negative things you hear about ethanol?  Those are stories spun by a very wealthy oil industry that doesn’t want to lose market share.

Questions?  Comments?  Let’s chat in the comments …

Mitchell_LindsayLindsay Mitchell
ICGA/ICMB Marketing Manager

 

 

*beyond 10% blends

WHAT FACTS ARE REALLY FACTS?

(This guest blog is provided by Matt Reese who writes for Ohio’s Country Journal and was originally posted here.)
It can be really hard to know which way to feel about some issues because these days it seems everyone has their own set of “facts” that conclusively proves their point. The problem, of course, is that as soon as you conclusively prove a point, you run into someone else who has an entirely different set of facts that definitively proves their point, which happens to be the opposite view of the first point that was proven. Confused yet? I know I am.

One only has to sit and listen to a political debate on any issue between any candidates of any party to get all caught up in a muddled mess of my-facts-versus-your-facts. Then there is often a behind-the-scenes reporter who does a fact check on the aforementioned facts to clarify the situation. Unfortunately, more often than not, these fact checks often just compound the problem by providing another opportunity to spin the issue with a set of suspect facts about the facts.

ethanol ghg emissionsOf course, in my line of work I see this all the time in great detail with the wide variety of complicated issues facing food and agriculture. This is certainly true in the current debate over the Environmental Protection Agency’s impending decision about the levels set in the Renewable Fuel Standard (RFS). The recent story by Joel Penhorwood on this issue highlights the divergent facts in the RFS debate. Here is an excerpt:

ACCF (an anti-ethanol group) Executive Vice President Dave Banks responded strongly to the outcry by Ohio ag and pro-ethanol groups.

“I think these guys sometimes get lost in this weird, parallel universe in which they actually convince themselves that this mountain of damning, definitive science and data about corn ethanol’s environmental impact doesn’t exist, or that folks don’t actually know about it,” Banks said in a statement.

That environmental impact Banks spoke of is one of negative consequence. The ACCF points to research that they say shows the production of ethanol doubles greenhouse emissions when compared to gasoline over 30 years, making it a dirtier fuel in the end — a highly disputed claim. 

“It’s just misinformation,” said Ohio grain farmer Chad Kemp about the anti-RFS ads. “The things they’re saying there is no scientific backing for. They’re trying to get the people to jump on board with it and basically, their idea is to kill renewable fuels in this country.”

The heated debate over the RFS really ramped up in recent weeks with dueling ad campaigns in Ohio and Washington, D.C. highlighting very different sets of facts pertaining to ethanol’s impact on the environment, the economy and so forth. So whose facts are right?

In the end, the complexities of these various issues generally boil down to some basic truths. The key for me is getting down to those basic truths and sorting out how I feel about those. So, here are some facts about the RFS (that are really facts) that helped me to form my opinion.

  1. Congress created and approved the RFS.
  2. Businesses planned their investment strategies based upon the RFS.
  3. The RFS was implemented and businesses responded as they saw fit.

While there are many more nuances to the RFS debate, for me this set of indisputable facts is reason enough to support it. The government made a deal. Regardless of whether you like the deal or not, it was made and I believe it should be upheld and seen through to fruition. Maybe this set of facts doesn’t address your primary concerns about he RFS. Here are more real facts.

  1. Ethanol offsets the purchase of foreign oil.
  2. Ethanol is made from corn produced by American farmers.

I would rather support farmers in the U.S. with my energy dollar than who knows who I am supporting when I use petroleum.

In the end, there is usually at least some kernel of truth in either side of these debates. Which facts matter to you? The way I sort through them is by identifying the key (and real) facts of the matter that really matter to me.

Either way, the RFS is a no-brainer in my book.

Matt reeseMatt Reese
Ohio’s Country Journal

PROTECT THE RFS VIDEO RELEASED

Protect the RFS. We feel like we’re beating a dead horse.

To summarize for anyone that hasn’t read Renewable Fuel Standard details here before, the RFS is about forcing the oil industry to give ethanol “shelf space” in their retail stations. For a company to sell a cheaper, more environmentally friendly fuel THAT COMPETES WITH THEIR OWN PRODUCT is not something they do willingly.

If this is all news to you, read this article. But you’ll also want to watch today’s feature video below.

WHY ETHANOL MANDATES?

Most Americans don’t like mandates.

As Americans, we typically believe in capitalism and a business model that sends products out into the world and asks them to stand on their own two feet or die trying.  Yet, farmers have continuously asked for ethanol mandates and I know that’s confusing.

It’s a complex issue – aren’t they all?  You’ll have to stick with me, but I know we’ll come out at the end much smarter …

1. Gas Stations are largely owned by or on contract with “Big Oil.”

rfs lowers costs at the pumpThere are a few locally owned gas stations – in Central Illinois a company called Qik N EZ is popular and those stations do not apply here – but most stations are owned or on contract with the big oil refiners like BP, Shell, or Mobil.

BP, Shell, and Mobil have a significant interest in petroleum-based fuels.  I think we can all agree on that.  And if they don’t own the station, they spell out the terms in a contract that ties the hands of the local owner and doesn’t allow him to make all his own decisions regarding the fuels he can offer.

2. “Big Oil” wants to protect its market.

Of course.  This makes sense.  If I’m a company in the business of refining and retailing petroleum-based fuel, then I obviously want to protect my market and continue making money off petroleum-based fuel.

No one begrudges the oil industry for their self-preservation.  It’s the American way and exactly what we’d expect any other industry to do.

FYI – Exxon Mobil made $4.9 billion in the first quarter of 2015 for reference.

3. But “Big Oil” has little interest in the ethanol industry.  Anything more than 10% ethanol is a competitor.

In a different world, if we were writing a different story, the oil industry would have seen the potential for corn-based ethanol and invested heavily.  If that were the case, we’d be fighting some other battle right now because “Big Oil” would want to see ethanol succeed.  But that didn’t happen.

As it stands, we have a corn-based fuel and a petroleum-based fuel fighting for market share.  Cost of production and cost to the consumer ends up being a huge player in who will succeed.

Ethanol is cheaper and cleaner with better performance so we are poised to win.  But …

4. All those gas stations are owned or contracted with “Big Oil” so they won’t allow ethanol* to be sold.

flex fuel pumpYou know what?  This makes sense too.  It’s sort of like asking Kroger to sell Wal-Mart products out of the goodness of their heart when we all know that the Wal-Mart prices are going to be cheaper.

Selling cheaper corn-based fuel is not in the best interest of the oil industry who wants to protect its market and profit, even though selling corn-based fuel is in the best interest of Americans who want to save money, protect the environment, and not send their sons and daughters overseas to fight for oil.

5. Here’s where the mandate comes in.

It’s not the best option, but America isn’t a Utopian society.  Since selling ethanol* doesn’t make sense for the oil industry and they won’t do it just to be nice (who would?), we have to make them sell it because it’s better for the country.

By the way, the “mandate” is more commonly referred to as the RFS – the Renewable Fuel Standard.  It’s a piece of legislation that forces retailers to sell increasing amounts of ethanol every year because Congress understands that ethanol is good for America.

6. And all those negative things you hear about ethanol?  Those are stories spun by a very wealthy oil industry that doesn’t want to lose market share.

Questions?  Comments?  Let’s chat in the comments …

Mitchell_LindsayLindsay Mitchell
ICGA/ICMB Marketing Manager

 

 

*beyond 10% blends