Corn producers hope to save ethanol mandate
Sen. Franken meets with Rock County farmers Friday
(Submitted file photo)
The local Agri-Energy Ethanol Plant (now Gevo) was founded in 1996 on the notion that federal incentives for renewable energy would exist. “We were doing it for all the right reasons — to have a market for our product, to have renewable fuel, to get away from foreign oil,” said Beaver Creek corn producer David Kolsrud, one of the plant’s early founders and investors.

And now they wait.

After mounting a massive email and letter writing campaign, corn growers wait to see how the federal Environmental Protection Agency will rule on a proposed change to the amount of ethanol that’s mixed into gasoline.

The change to what’s known as the Renewable Fuel Standard (RFS) will affect farmers across the nation and in Rock County.

A 60-day public comment period on the change ended Jan. 28.

In a nutshell, if the federally mandated amount of ethanol is not increased and the price of corn drops even lower, corn growers face a loss of revenue. 

And so will the communities in which they live and the local governments to which they pay taxes.

In 2007 a law was passed to mandate the inclusion of 18.15 billion gallons of ethanol into the nation’s fuel supply by 2015. 

Now, the EPA is considering leaving the amount at its current 15.21 billion gallons of ethanol, or possibly reducing it even further.  

 

Sen. Al Franken weighs in on discussion in Luverne

On Friday, Jan. 24, Minnesota Sen. Al Franken met with local corn growers telling them what they already knew. “I don’t have to tell you anything,” he said at the Blue Mound Banquet Center. “You know what this means to your communities.”

Franken said he believes the EPA’s lagging support for ethanol begins in the White House. 

He said he spoke personally with President Barak Obama and his aides last week to remind them of the importance of ethanol use to farm states. 

The EPA director is appointed by the president and has been given authority by Congress to oversee the Renewable Fuel Standard.

Franken said he does not think there is enough support in the Senate to override an unfavorable EPA decision, but he remains cautiously optimistic that the EPA will leave the current mandated levels in place.

 

Hitting the wall

Demand for gasoline leveled off after the 2008 recession. Some say the drop in fuel use is a reflection of a poor economy. 

Others believe Americans are walking more, biking or taking public transportation. 

Either way, as less fuel is used, less ethanol is needed to blend with it. Adding another 3 billion gallons of ethanol to the nation’s fuel supply increases the percentage of ethanol in each gallon of gas. 

The mix is called a “blend wall.” 

Most engines can use a 10 percent ethanol blend with no complications, but the auto industry resists blends greater than 15 percent. 

Oil companies, which are required to buy ethanol, say allowing the amount of required ethanol to increase from 15 billion to 18 billion gallons will require them to buy ethanol they can’t use.

 

The epicenter is here

Beaver Creek corn producer Dave Kolsrud was at the meeting with Sen. Franken in Luverne. 

Kolsrud was involved in the founding, managing and eventually selling of the Luverne Agri-Energy ethanol plant. 

“We (farmers) used to stand in line at the ASCS office with our PIC certificates waiting for our government checks,” he said.

“We got together and built an ethanol plant to get off of government subsidies.”

He said the local plant was founded on the notion of renewable energy and ground level marketing.

“We were doing it for all the right reasons — to have a market for our product, to have renewable fuel, to get away from foreign oil,” Kolsrud said. 

“We took the future into our own hands. Now the government is putting up a stop sign in the middle of the road and changing the rules.”

Kolsrud and others argue that all energy sources are subsidized by the government — solar, wind, biofuels and oil. 

He said he would agree with ending ethanol mandates if the government would stop supporting the other industries. 

“We can stand on our own on a level playing field,” he said.

 

How did our friends become our enemies?

Along with decreasing demand for ethanol is a decrease in the support for ethanol in general. 

Beaver Creek farmer Lyle Rollag asked, “Why have our friends become our enemies?” He referred to some formerly “green”-leaning groups that have begun to oppose ethanol.

The answer comes down to advertising, and according to Franken, Big Media — which was fed false information that was repeated and spread until it was accepted as true.

The “Food Before Fuel Campaign” was launched in 2008. 

It was sponsored by a broad coalition of environmental groups, agriculture interests, oil companies and 25 other food industry groups. 

They argued that federal subsidies for corn-based ethanol contributed to rising food and animal-feed costs.

Ethanol industry representatives say the real factors driving up world food prices were increasing oil prices, rising demand for meat in China and elsewhere, droughts and adverse weather, commodity speculation and a decline in the value of the dollar.

Kolsrud said ethanol producers haven’t been very good about telling their side of the story. 

 

What difference does it make in the end?

Hills farmer Eugene (Pucky) Sandager said the entire county will feel the impact of reduced corn prices. 

Corn prices affect land prices, which affect taxes … which impact cities, schools and the county. 

“The road in front of your house, the school, the businesses — they are all affected by farmers paying taxes,” Sandager said. 

 

The EPA will announce its RFS decision in a few months.

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