Bipartisan Senate Bill Would Kill Corn Ethanol Mandate

Jul 23, 2021  | 3 min  | Ep4649

Ethanol, predominately made from corn, has been a federal mainstay in the U.S. gasoline supply for more than 15 years. Over the past few weeks, the ethanol industry has been enduring increasing pressure from its opponents over blending everywhere from the refinery to the pump.

Here’s Josh Buettner with more.

This week a bipartisan group of U.S. Senators, mostly from states where the oil industry is a major part of the local economy, unveiled legislation to eliminate the federal mandate requiring a percentage of corn-based ethanol be mixed into the nation’s fuel supply.  Other biofuels would be unaffected, but the move ruffled feathers in the Corn Belt. 

Sen. Chuck Grassley/R-Iowa:  “Big oil has raised its ugly head again.”

Iowa Senator Chuck Grassley pledged to fight the bill and said farm-state lawmakers have been battling the petroleum industry since just after the inception of the Renewable Fuel Standard in 2005. 

Though year-round sales of E15 was struck down by a federal appeals court earlier this month, and the granting of small refinery exemptions accelerated during President Trump’s tenure, Grassley expressed some confidence in current Environmental Protection Agency oversight.

Sen. Chuck Grassley/R-Iowa: “That’s not saying I can guarantee you that the Biden people are going to be as pro-ethanol as I want them to be, but I don’t think we’re going to have them finding this balance.”

The American Petroleum Institute, a trade association for the oil and natural gas industry, weighed in on the Corn Ethanol Elimination Act:

 “The EPA would best serve the public interest by keeping compliance volumes feasible and maintaining program stability by not exceeding the ethanol blend wall. We appreciate the growing recognition that the RFS program needs a comprehensive overhaul to better protect consumers and businesses working to meet fuel demand for various modern engines.”

Ethanol insiders say similar legislation is teed up almost every Congressional session, under what they call dubious environmental and economic claims, to force de-facto negotiation. 

Monte Shaw/Executive Director – Iowa Renewable Fuels Association: “It’s amazing how impervious D.C. is to basic facts, right?  I mean, sometimes you can say: ‘Here’s a problem.  I think we should solve it this way.  I think we can solve it this way.’, but there should be some basic facts, right?  Ethanol reduces the cost of gasoline.”

Iowa Renewable Fuels Association Executive Director Monte Shaw thinks this go around was spurred by recent Congressional attempts to fix the E-15 issue.

Monte Shaw/Executive Director – Iowa Renewable Fuels Association: “We’re used to it.  But I have a very clear message for them.  We’re not interested.  Right?  We will find a way to sell E-15 year round.  We’ve got other, both federal EPA ways, and ways that individual states can level the playing field for both E-10 and E-15.”

For Market to Market, I’m Josh Buettner.  Twitter: @mtmjosh

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