Ethanol Mandate Hurts Iowa Corn Farmers

Business News/Analysis, Federal Regulation, Feedstocks, Field/Orchard/Plantation Crops/Residues, Marketing/Market Forces and Sales, Opinions, Policy

January 27, 2016

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by Thomas Pyle (The Hill/ American Energy Alliance) … Fortunately for the corn industry, “advanced” biofuels have failed to take off as Congress expected. Moreover, EPA can reduce the volumes Congress called for in the statute, which they have done for several years in a row.

Still, the fact that federal law calls for the gradual displacement of corn-based ethanol should concern corn farmers. Unlike “advanced” biofuels, which are scarce and expensive, corn ethanol is a viable product that boosts octane and improves engine performance. Refiners would still purchase corn-based ethanol without the RFS. But if the RFS remains in place, corn stands to lose out to products that do not pass the market test, simply because Washington decrees it.

The solution is simple: repeal the entire RFS. Corn-based ethanol would survive and likely retain its share of the total fuel market. Meanwhile, “advanced” biofuels would be forced to compete against corn on a level playing field. If the “advanced” fuels are really so advanced, shouldn’t they win on their own merits?

None of the presidential candidates have called for full RFS repeal. However, some Republican candidates (Jeb Bush, Sen. Ted Cruz, and Carly Fiorina) have pledged to “phase out” the mandate. Of these proposals, Cruz’s (Texas) approach does the most to protect the interests of the American people, including Iowa’s corn farmers. Our presidential energy scorecard details the full positions of each candidate. READ MORE and MORE (New York Times)

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