Tom Hall, Senior Agronomist, Rooster Strategic Solutions

Earlier this year, the petroleum industry said some soothing words about biofuels as being part of a Unites States clean fuels strategy. What has become clear in recent weeks is the petroleum industry meant biofuels NOT made from corn. In the Senate, a bill, “Corn Ethanol Mandate Elimination Act of 2021,” has been submitted by Toomey (R-PA), Menendez (D-NJ) and Collins (R-ME). A companion bill has also been introduced in the House. The refining industry rallied its political allies on the east and west coasts to introduce these bills that remove corn ethanol from fuel-blending mandates. However, these bills leave in place mandates for other biofuels such as cellulosic biofuels and biodiesel. Probably not a coincidence that the petroleum industry is making financial bets on both cellulosic and biodiesel.

Senator Toomey said, “…forcing Americans to buy billions of gallons of corn ethanol is terrible policy on many levels. For starters, it imposes financial harm on consumers and refineries, risking thousands of jobs. Further, the RFS drives up the cost of gas and food, harms our environment, and damages engines.”  Sponsors of the elimination of corn ethanol are framing the ethanol mandate as an enemy of the environment and jobs.

The corn ethanol mandate has been attacked previously with legislation that was dead on arrival. The difference now is the lead out train for today’s bills is much stronger with bipartisan House and Senate support, a big industry providing air cover, and environmental groups in tow. The Environmental Working Group (EWG) has led the opposition to corn ethanol. In the EWG Clean Energy Policy Paper published in March they said, “Corn Ethanol is another dead-end fuel, made obsolete by the rapid adoption of electric vehicles. The federal corn ethanol mandate has increased greenhouse emissions by the resulting plowing up of grass and trees to produce corn, releasing soil carbon.” EWG also sees ethanol as the culprit for an increase in corn acres, resulting in more runoff from fields, with the Hypoxic dead zone in the Gulf of Mexico being the downstream victim.

Our Rooster suspicion is the timing of this coordinated attack on ethanol is in part due to today’s favorable corn prices and strong economic conditions on the farm.  The prospect of reducing farm income during an economic crisis is not a good look for anyone. The survival of the ethanol mandate will likely depend on who the White House is willing to support more–farmers or petroleum refiners?

The Biden White House has said favorable things about corn ethanol as part of the clean fuel energy plan. They also know that ethanol support is important to win elections in the Midwest.  But it is likely that the blue states, where the major opposition to ethanol is coming from, will remain blue regardless of the administration’s position on ethanol. Bill sponsors could look to attach the elimination of the ethanol mandate as an amendment to a larger, unrelated piece of legislation. As Speaker Pelosi once famously said about the health care bill, “We have to pass the bill so that you can find out what is in it.”

Like the petroleum industry, the corn ethanol industry is represented by trade associations but is also supported by farm and commodity organizations. They, too, are talking to their allies in Congress about the importance of both ethanol and its byproduct, Dried Distiller Grains (DDG), to the bottom line of grain and livestock farmers. They are also making the case for corn ethanol as part of the solution that is in place now for lowering greenhouse gasses.

The biggest potential advantage the ethanol industry has are the 2 million farm families that rely on ethanol, which uses one-third of their corn crop to provide an essential feed ingredient to the livestock industry. If each farm family reaches out – either by letter or a personal contact to their Senator to show their support for ethanol – the petroleum refiners and their allies don’t stand a chance of eliminating the ethanol mandate.