Ethanol-15 approved: Good for economy, tough on feeders

Corn farmers are happy that ethanol manufacturers are buying their crops, but livestock feeders are not.

Corn stocks appear to be so tight there is only a three week reserve supply, and then, a recent government decision about ethanol poured more gas on a surge in prices..

The U.S. Environmental Protection Agency recently approved E15 – 15 percent ethanol blended with 85 percent gasoline – as a fuel for vehicles manufactured between 2001 and 2006.

Ethanol is primarily made from corn, so the EPA decision is apt to increase demand for corn and add to sharply higher prices.

So hog feed will probably cost more too.

“It’s very disappointing that the administration made this decision given the rising price of corn and the lower estimate for this year’s corn harvest,” said Randy Spronk, a hog and crop farmer and the chairman of National Pork Producer’s environment committee.

In mid-January, the U.S. Department of Agriculture reported that corn stockpiles were the lowest on record. The national corn “carryover” is thought to be less than three weeks’ worth.

NPPC says livestock producers could mean regional corn shortages in some parts of the country.

The organization joined with other livestock producer groups Nov. 9 in a federal lawsuit against the anticipated EPA decision to raise the blend rate to 15 percent, arguing that the agency exceeded its authority in granting a partial waiver of the Clean Air Act.

Under the clean air law, EPA may only grant a waiver for a new fuel additive if it will not cause or contribute to a failure of any emission control device or system. EPA has admitted that E15 can cause harm to the systems in some older vehicles, the NPPC said.

“We don’t want a repeat of a couple of years ago when, due mostly to high feed-grain prices, pork producers lost an average of nearly $24 a hog for 28 months,” Spronk said.

But EPA Administrator Lisa Jackson said thorough testing shows that E15 does not harm emissions control equipment in newer cars and light trucks.

“Wherever sound science and the law support steps to allow more home-grown fuels in America’s vehicles, this administration takes those steps,” Jackson said.

Nebraska is the nation’s second largest producer of ethanol with 24 active ethanol plants.

The increasing demand for ethanol will be good for the economy, Rep. Adrian Smith said.

“Diversifying our nation’s fuel supply is absolutely essential. Putting more choice in the hands of consumers is an important step,” Smith said. “This decision will help promote domestic energy resources and while increasing our energy independence.

Sen. Ben Nelson, who fostered the ethanol business in its formative years when he was the Nebraska governor, also applauded the EPA decision.

“The number of Nebraska jobs will grow, the air will be cleaner and America will be less dependent on foreign oil,” he said.

Nelson said Nebraska produces 2 billion gallons of ethanol a year out of the nation’s annual production of 13 billion gallon.

Nelson said the indirect impact of the ethanol industry has created over 3,000 jobs and $3 billion in economic activity in Nebraska, citing a study by the Nebraska Public Power District.

Corn farmers are excited about the announcement.

The ethanol industry is reaching market saturation at E10, said Kelly Brunkhorst, director of research for the Nebraska Corn Board.

The Nebraska Corn Board offers grants to gas station owners to install blender pumps and offer higher ethanol blends to motorists who drive flex-fuel vehicles.

“Blender pumps will also allow station owners to easily offer both E10 and E15 fuel options when the time is right to do so,” Brunkhorst said.

E15 and blender pumps will help the United States reduce its dependence on foreign oil and utilize cleaner, renewable fuels, goals set out as part of the renewable fuels standard (RFS). Established through the Energy Independence and Security Act of 2007, the RFS increases the amount of renewable fuels available in the fuel supply each year.

Natural gas too

Nelson is praising the Metropolitan Utilities District (MUD) of Omaha for establishing two Compressed Natural Gas filling stations in Omaha, with the help of federal stimulus money.

Natural gas is a practical, inexpensive fuel that causes less pollution, Nelson said.

“It is a definite part of the mix America needs in our battle to be energy self sufficient,” he said. “It’s good to see federal stimulus dollars creating Nebraska jobs and economic development for our future from this abundant source of American energy.

The two stations to be built will be at 63rd and Center and 54th and L Streets in Omaha.

MUD will build them using a $2.2 million loan at 2.5 percent interest, which is funded by the American Recovery and Reinvestment Act, commonly known as the stimulus, through the Nebraska Energy Office.

Compressed Natural Gas sells for the gasoline equivalent of $1.29 per gallon compared with the price of more than $3 per gallon for unleaded, Nelson said.

source: northplattebulletin