Ethanol Versus Oil in Global Crisis: Biofuels Backers, POET Executive Point to Advantages Ethanol Offers in Conflict, Climate

by Chris Clayton (DTN Progressive Farmer) With oil reaching its highest price in nearly 11 years and OPEC nations opting not to increase production, the biofuels industry is clamoring for attention in the U.S. and calling on the Biden administration to support it.

At the National Farmers Union annual meeting this week in Denver, an executive for the world's largest ethanol producer, POET, highlighted biofuels as an immediate solution for both climate change and helping U.S. consumers avoid price shocks stemming from conflicts such as the war in Ukraine.

"We can make about anything out of a bushel of corn and biomass that we can make out of a barrel of oil today. It's just a matter of biotechnology and economics," said Doug Berven, POET's vice president of corporate affairs, addressing the NFU crowd. He added, "Bioethanol is immediately available, it's universally affordable, and it's clean. So, we should promote bioethanol and agriculture as solutions to climate problems all around the world. And we need to do that together. We're in this thing together."

Pointing to the daily increases in fuel prices, biofuel and agricultural groups on Wednesday called on the Biden administration to quickly finalize Renewable Fuel Standard blend requirements for 2021 and 2022 and pull back plans to retroactively reduce blend-volume requirements for 2020. The statement was released by the Advanced Biofuels Business Council, American Farm Bureau Federation, Clean Fuels Alliance America, Growth Energy, National Farmers Union, and Renewable Fuels Association.

The groups also asked the Biden administration to allow for year-round sales of E15.

At the NFU meeting, Berven told farmers reliance on fossil fuels ties up the global economy and makes it nearly impossible to meet global climate goals. He noted ethanol today has 50% lower greenhouse gases than gasoline. By 2030, ethanol has the potential to be 70% better than gasoline in greenhouse gas emissions. By 2050, POET and the industry have a goal of being carbon neutral.

"If it was a fair market in the fuel market, we'd probably be 30% of the U.S. fuel market; but it's not," Berven said. "The bioethanol industry today takes market share from the most powerful political force on the planet. That's the oil industry. And as long as we are putting politics before progress, it's going to be very difficult for us to meet any of our climate goals. We're going to have to have cleaner liquid fuels in order to meet our climate goals."

But during rulemaking under the Obama administration, EPA also started phasing out the flex-fuel vehicle credit for automakers at a time when they were making 80 different vehicle models as flex-fuel. By 2021, there were only six vehicle models offered to consumers that are flex-fuel. EPA should reinstate those credits for flex-fuel vehicles, Berven said.

"That has stopped automakers from building flex-fuel vehicles, and that has hampered our ability into the (E)15, (E)30, E85, whatever it might be, and we've got to get rid of those barriers," he said. "And it's so inexpensive to make a flex-fuel vehicle versus a non-flex fuel. All of the parts are exactly the same. It's really a matter of certification and computer programming."

At a time when oil prices are soaring, the option of converting vehicles to flex-fuel is one way to provide more domestic energy independence.

"Because when we have the next crisis like we do now -- with Russia and Ukraine and oil prices going through the roof -- we can make that transition," Berven said. "It's just so simple. It makes so much common sense. That is why I don't understand why they're not doing it. If we really want to declare our energy independence, we need domestic energy. What better source than from the American farmer and cleaner biofuels that cost the consumer less?"

"It's not fair to ask for solutions from farmers without compensating them for their efforts. That's critically important."

To that end, USDA just rolled out its $1 billion pilot project, the Partnership for Climate-Smart Commodities. POET is seeking to take a program it has used at one of its South Dakota plants with Farmers Business Network "Gradable" and apply for $100 million to broaden out that program. Under the program, farmers volunteer their information while POET and FBN track their carbon score. POET has done a pilot project around the Chancellor, South Dakota, facility that Berven described as "wildly popular." (https://www.gradable.com/…)

"Sometimes you have to sacrifice a little bit of yield in order to lower your CI (carbon intensity) score," Berven said. "No farmer is going to do that unless the yield loss is worth more than the yield gain. And so, there's got to be a value to the carbon, and we're trying to do that from a market standpoint, rather than a regulation standpoint."

Berven added the potential for biofuels and agriculture to add more value and use both the grain and biomass for more purposes is "virtually untapped." Yet perceptions hinder that ability, too, as people in the environmental community and others keep trying to pursue the perfect energy source.

Also see "Undersecretary Defends USDA's New Partnership for Climate-Smart Commodities" here: https://www.dtnpf.com/…

Excerpt from Fence Post: Eliminating barriers to higher level blends of ethanol is one way to lessen America’s dependence on foreign oil and relieve high prices at the gas pump, says North Dakota Farmers Union President Mark Watne.

“Ethanol and biofuels can, and should, play a much bigger role in our nation’s energy security,” Watne said. “We, as farmers, can grow an abundant, renewable source of fuel from the ground. But there are long-standing regulatory barriers that are preventing the expansion of renewable fuels.”

According to the Renewable Fuels Association, one-third of the U.S. crude oil supply came from foreign sources in 2021. At the same time, the use of ethanol in the U.S. fuel supply reduced crude oil imports by over 530 million barrels. However, that number isn’t a highwater mark as required levels of ethanol production under the Renewable Fuel Standard law were reduced, beginning in 2016 when the Environmental Protection Agency granted RFS production waivers to oil refineries.

Farmers Union supports full implementation of the RFS, year-round use of E15 (marketed as Unleaded88) and elimination of barriers to mid-level ethanol blends, including E30. The organization also supports the approval of other crops, such as canola, as feedstock for renewable diesel.