State Of The Ethanol Industry, Industry’s Eyes On EPA’s Wheeler

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Source: blog by Chris Clayton, DTN

Andrew Wheeler, EPA’s acting administrator, wasn’t at the Iowa Renewable Fuels on Tuesday, but he was the focus of the industry’s outlook on multiple fronts.

At the Iowa Renewable Fuels Association booth was an oversized poster-card letter to Wheeler, calling on EPA to complete the rules for year-round E15, as well as stop the small-refinery exemptions that the ethanol industry sees gouging biofuel demand.

Suffering from low margins and idle plants, the fate of the Iowa ethanol industry right now hinges on EPA getting year-round E15 — a fuel blend of 15% ethanol and 85% gasoline — done by this summer’s driving season and capturing export markets in countries such as China.

Iowa Gov. Kim Reynolds made a point to sign the card after speaking to the crowd. Noting Iowa ethanol capacity is anywhere from 10% to 20% offline, Reynolds said the ethanol industry is at the low of a commodity cycle right now. Reynolds added she received assurances from Wheeler that the E15 rule would be done on time, despite the partial federal shutdown over the past month.

Monte Shaw, executive director of the Iowa RFA, said the ethanol industry “is hurting, but it’s hopeful” after 2018. The past year was a challenging one for the biofuels industry working to defend the Renewable Fuel Standard from being gutted by the petroleum industry and its supporters who tried to cap prices on renewable identification numbers (RINs).

John Eichberger, executive director of the Fuels Institute, said right now only 1,690 fuel stations in 30 states have E15 pumps. Once year-round E15 kicks in, Eichberger expects the number to spike to tens of thousands of service stations and pumps in the next five years.

“Retailers make money on E15,” Eichberger said. “There’s no evidence it is going to be a problem. It’s going to have huge market opportunities because it makes a lot of sense.”

Industry representatives are divided on whether EPA can move quickly enough on that E15 rule, which amounts to a waiver from Reid vapor pressure (RVP) standards. President Donald Trump has pushed for the E15 goal, and Wheeler also is getting tired of the pressure of going to Capitol Hill and being pressed on the topic.

“When the president says something, he expects it to be done, and it will be done,” said Eric Branstad, who has advocated for biofuel policies at the White House.

Robert White, vice president of Industry Relations for the Renewable Fuels Association, said the jury is out on whether EPA can get the E15 rule out on time. It will require a 45-day comment period, and EPA has yet to get a proposed rule to the White House Office of Management and Budget (OMB) for review.

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