Oil interests continue to worry biofuel proponents

Farm Forum

Conflicts between the ethanol and oil industries have been simmering for years, but the battle is likely to heat up.

“The year 2013 is going to be a pivotal year,” said Matt Merritt, a spokesman for Sioux Falls-based Poet, the largest ethanol producing company in the U.S. “There will be a lot of focus on the Renewable Fuel Standard in Congress.”

The standard requires that more and more ethanol be used nationwide every year until 2022.

The 2013 amount – 13.8 billion gallons of ethanol – increases to 14.4 billion gallons in 2014 and 15 billion gallons in 2015, according to Renewable Fuels Association website. More dramatically, the total amount of mandated biofuels, including cellulosic ethanol, more than doubles from 16.55 billion gallons in 2013 to 36 billion gallons in 2022.

In order to reach that level, vehicles are going to need to use higher ethanol blends such as E15, said Kelly Kjelden, general manager at the Poet Biorefining plant in Groton.

E15 is a 15 percent ethanol and 85 percent gasoline mixture, which has been approved by the Environmental Protection Agency for use in cars and light trucks 2001 or newer.

The biofuels industry won a battle on June 24, when the U.S. Supreme Court ruled that the American Petroleum Institute did not have sufficient grounds to block the use of the E15 fuel blend.

“This was a big win for the ethanol industry,” Kjelden said. “It is one more way E15 has been cleared for public use.”

Merritt said, “The oil industry is opposed to E15. For every gallon of ethanol used, that displaces a gallon of gasoline.”

Nationwide, most fuel stations that sell ethanol blends offer only E10, a mixture of 10 percent ethanol and 90 percent gasoline. The 10 percent blend wall needs to go away, said ethanol proponents.

Attempts to scale back future ethanol benchmarks are, in many ways, an attack on cellulosic ethanol, Merritt said.

Almost all of the increase in ethanol required in the Renewable Fuel Standard after 2015 is from cellulosic ethanol, he said.

Production mandates increase each year from 1 billion gallons of cellulosic ethanol produced in 2013 to 16 billion gallons in 2022.

Cellulosic ethanol is made of wood, grasses or inedible parts of plants, such as corn cobs. Like ethanol made from fermented corn, cellulosic ethanol is made through a fermentation process that produces grain alcohol (ethanol).

Cellulosic ethanol is more difficult to make because the raw materials have fewer natural sugars to convert into alcohol than high starch plants such as corn.

The benefits of cellulosic ethanol, however, are enormous, said proponents. The raw materials are renewable, abundant and cheap. Cellulosic ethanol is considered the next leap in the evolution of biofuels.

Poet is highly interested in cellulosic ethanol because it has the technology to make it, Merritt said. Poet operates a cellulosic ethanol plant in Emmetsburg, Iowa.

Merritt said Poet would license its technology to other ethanol plants and envisions cellulosic ethanol plants operating alongside corn ethanol plants.

Kjelden said allowing the Renewable Fuel Standard laws to remain intact will keep the ethanol industry on the path of developing more renewable energy.

“Why should we fix something that isn’t broken?” he said.

Ethanol opponents said there is less need to develop ethanol because the U.S. has been cutting back on imported oil. The discovery and development domestic oil, such as that in the North Dakota oil fields, is one reason for the decline.

“It’s still oil, still a fossil fuel and still not renewable,” Kjelden said. “We need renewable, clean-burning fuel. We still need to think about the environment and the air we breathe.”

The U.S. imports 40 percent of its petroleum, according to the U.S. Energy Department.

Kjelden said that for South Dakota and rural America, ethanol is especially important because of it economic benefits: Ethanol plants create jobs and add value to farmers’ crops.

Kjelden said one of the important points about E15 is that it is a choice, not mandated. He said he hopes more service stations offer it to give consumers a choice.

There is a lot at stake for the oil and ethanol industries in Congress this year, and there will be every year until 2022 when the Renewable Fuel Standard benchmarks are met, Merritt said.

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