Ethanol Nebraska

Despite myriad opinions regarding ethanol mandates among the US population, and even among farmers themselves, four out of the five remaining presidential candidates support the continuance of the 2005 congressional mandate. Also known as the Renewable Fuel Standard (RFS), it requires refiners to blend enormous amounts of biofuel, mostly corn-based ethanol, into gasoline.

Many corn producers offer support for such mandates, naturally, as it creates a demand for corn, artificial though it may be, and helps to bolster the price of corn. Other supporters cite environmental reasons, asserting that ethanol blends emit less greenhouse gases, and is therefore a cleaner alternative.

What many fail to realize, however, is that the RFS was designed to cap corn ethanol after a period of time (in 2015), and ramp up efforts to utilize “advanced” biofuels. Corn is not categorized as advanced, in this case. As such, if the RFS standard remains in place, it intends to gradually displace corn’s market share, transitioning from consisting of biofuels made from corn to those made from non-food and non-feed crops.

According to the Congressional Research Service (CRS), the transition would eventually reduce corn for biofuels to 40 percent.

The American Energy Alliance’s Thomas Pyle writes, “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.”

His solution? Repeal the entire RFS, forcing the “advanced” biofuels to compete against corn on a level playing field. Corn-based ethanol would, according to Pyle, retain its share of the total fuel market.

While we don’t know the likelihood of this happening in the future, only one remaining candidate, Ted Cruz, has voiced support for the phasing out of the RFS. With this backstory in mind, it’s not as cut-and-dried as would originally meet the eye. The other candidates, consisting of Donald Trump, John Kasich, Hillary Clinton, and Bernie Sanders have all voiced support for continuing the RFS put in place in 2005.

Still, Iowa corn farmers pulled away any prior support from Cruz for his RFS position. Whether it is because of a lack of awareness of the RFS’ eventual reduction of corn for “advanced” biofuels, or for other reasons, remains to be seen.

If ones adopts a more cynical position, he/she would argue that such widespread support of the ethanol industry among the top candidates is due in large part to the first primary voting that took place in corn-producing Iowa in February. As such, candidates pander to strong ethanol support in the state, hoping to get off on the right foot from the start of the election schedule.

However, at this point in the election year, it’s safe to say that the RFS mandate will remain in place for the foreseeable future in its current form.

Sources cited:  Pyle, Thomas. “Ethanol Mandate Hurts Iowa Corn Farmers.” The Hill. Capitol Hill Publishing Corp. 26 Jan. 2016. Web. 31 Mar. 2016.