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EPA's biofuel announcement hits the corn industry

S corn growers were disappointed last week when the Obama administration announced that it wanted to scale back the amount of biofuel that gasoline refiners must include in fuel. Although the proposal allows a modest boost for 2016, it falls a long way short of the ethanol lobby’s hope for a greater share of the nation’s fuel supply.
June 3, 2015

US corn growers were disappointed last week when the Obama administration announced that it wanted to scale back the amount of biofuel that gasoline refiners must include in fuel.

Although the proposal allows a modest boost for 2016, it falls a long way short of the ethanol lobby’s hope for a greater share of the nation’s fuel supply.

According to Brian Jennings, executive VP of the American Coalition for Ethanol, the administration is bowing to the oil industry’s efforts to the level of biofuel allowed in the marketplace.

“It’s like the NFL saying it’s OK for the New England Patriots to deflate footballs while everyone else must play by the rules,” he said in a statement.

Eight years ago, the future looked rosy for the corn industry when Congress ordered that gasoline refiners blend increasing amounts of ethanol and other biofuels into their product, with a target of 36 billion gallons per year by 2022.

Following the announcement, which came a year and a half after EPA first proposed cutting this requirement, producers of traditional corn-based biofuel will only be able to sell 14 billion gallons of their fuel to the gasoline refiners; a billion gallons less than that envisaged in the original program.

Ethanol has lost momentum due to a domestic energy boom, which has seen the US turn into one of the world’s biggest oil producers, and also because of the ongoing recession, which has caused the demand for gasoline to flat-line for several years.

The National Corn Growers Association is now looking at legal options for challenging EPA’s proposal, which it said would cut the expected corn demand by nearly a billion and a half bushels.