South Dakota Ethanol Industry Calls for Larger Ethanol Market

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June 27, 2016

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by Selena Yakabe (The Dickinson Press) South Dakota’s $3.8 billion ethanol industry is facing a “glass ceiling,” according to officials. … Hunter Roberts, the South Dakota representative for the Governor’s Biofuel Coalition, said this (Renewable Volume Obligation announced by the Environmental Protection Agency) could hurt South Dakota by causing an excess of ethanol production and could cause a lower corn volume demand the following year.

“It’s a slippery slope and we could end up with a lower demand for ethanol and lower demand for corn,” Roberts said. “It’s not a good thing for South Dakota, that’s for sure.”

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On May 31, the EPA proposed 14.8 billion gallons of conventional biofuel be required versus the Congress’ standard of 15 billion gallons for 2017. Though this would fulfill approximately 99 percent of the RFS, it would mean the ethanol industry may lose out on profits from 200 million gallons of ethanol.

Since the Renewable Volume Obligations is still in the proposal stage, it is open for public comment.

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“I think it’s kind of a glass ceiling put on (ethanol) by the EPA of just 10 percent ethanol in fuel,” Roberts said. “South Dakota is a great example where we have hundreds of blender pumps that give consumers the ability to choose if they want to use fuel with a higher ethanol content. Not everyone has to use beyond E-10, but if the infrastructure is there, it gives those that wish to the ability to use it.”

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Becky Pitz, the manager of the POET biorefinery in Mitchell, agrees that the industry is capable of meeting the 15 billion gallons set forth by Congress and by lowering the standards, the EPA is in effect limiting the ethanol market.

“What the EPA set is the amount of ethanol that has to be blended in the supply and that’s the amount that’s going to be blended according to policy. Whether blenders add more is their choice, but they tend to do the minimum that they have to,” Pitz said. READ MORE

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