IFB Ethanol Blog

WASDE: Ethanol Demand Down

The Agriculture Department's World Agricultural Supply and Demand Estimates (WASDE) released today places corn used for ethanol production at 3.7 billion bushels, down 300 million bushels from the November estimate.

"The most dramatic change in the December WASDE report was the big drop in corn used for ethanol production," said Terry Francl, senior crops economist with the American Farm Bureau Federation (AFBF). "I am surprised that corn use for ethanol dropped by that much. Demand for ethanol is down, just like demand for gasoline is down, but I just don't think the decline is that large. I believe 3.8 billion bushels to 3.9 billion bushels is closer to the mark."

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New Study Touts Benefits of Ethanol Tax Credit

If ethanol is the “saving grace” for U.S. corn producers, as one economist suggests, then the federal ethanol tax credit has helped keep biofuels in a relative state of grace.

But the credit, which gives fuel marketers an incentive to blend ethanol into the nation’s gasoline, has fueled additional economic ripples, according to a new study released last week.

Energy analyst John Urbanchuk concluded the incentive, set to drop per gallon from the current 51 cents to 45 cents in 2009, has put an additional $66.2 billion into U.S. consumers’ pockets since 1978.

Download Urbanchuk on impact of Blenders credit 111808

Higher Ethanol Fuel Blends OK, But

Cars running on higher levels of ethanol than now permitted get poorer fuel mileage, but there is no significant impact on tailpipe emissions, according to a new government study.

Most cars and trucks can legally run on no more than 10 percent ethanol, but the government is looking at the impact of allowing higher-level blends to keep expanding use of the biofuel.

The Energy Department study, released Tuesday, looked at the impact of using blends of 15 percent to 20 percent ethanol. One concern the study did not alleviate is the impact on cars' emission controls. The researchers said that, at full throttle, increased ethanol content could heat some cars' catalytic converters. That's a concern because excess heat could damage the pollution control devices. The researchers said additional study was needed.

Thirteen popular car models, from 1999 to 2007, were included in the study, as well as 28 types of engines used in lawn equipment, generators and other machinery.

(Source: Des Moines Register)

USDA, Dept of Energy Unveil Biofuels Plan

USDA and the U.S. Energy Department hope to speed up creation of a sustainable biofuels industry and have announced a national strategy to do so.  RFD Radio Washington correspondent Matt Kaye has more in this audio report.

Download ShaferBodmanBiofuelsPlan.mp3

IFB Discusses Biofuels with Midwest Governors

It seems that the hot, trendy thing to do is to misrepresent biofuels – using old statistics or twisting facts. That's why Illinois Farm Bureau knew it was important to participate in a recent meeting of the Midwest Governors Association (MGA) Advisory Group. With help from automotive, petroleum, ethanol, and environmentalist organizations, IFB's role at the meeting was to help develop sound, common-sense policy recommendations for biofuels legislation. This was the second in a series of three meetings that will result in recommendations to the 12 governors in the MGA, including Illinois Governor Rod Blagojevich.

LaHood: Biofuels could piggyback on mpg push

U.S. Rep. Ray LaHood, a Peoria Republican and “flex-fuel” vehicle owner, laments the lack of E85 (85 percent ethanol) pumps in Peoria, a center of ethanol commerce.

LaHood thus hopes the 2009 Congress and a new administration will take a “big picture” view of soaring consumer pump prices and potential biofuels benefits. The congressman led off a July bioenergy forum at the Peoria-based USDA National Center for Ag Utilization Research (NCAUR).

LaHood, who will retire his congressional seat at year’s end, stressed “there’s no wand and no silver bullet” to bring down gasoline costs. However, he believes mounting legislative pressure on major automakers to improve vehicle fuel efficiency also could lead to more alternative fuel cars on the nation’s highways.

But while the cost of energy is “the No. 1 debate going on in Washington today,” he maintained “very little is going to be done between now and the election.” LaHood thus urged biofuels supporters to monitor candidate positions on renewable fuels policy.

We have audio of Rep. LaHood discussing the lack of e85 infrastructure in Central Illinois and the biofuels policies of the two presidential candidates.

Download lahoode85.MP3

Download lahoodbiopolicy.MP3

New Group Forms to Defend Ethanol

A new group is adding its voice to the debate on using crops to produce alternative fuels such as ethanol amid rising food prices and shortages in some countries.

The Alliance for Abundant Food and Energy in Washington D.C. was created by Archer Daniels Midland Co, DuPont Co, Deere & Co, Monsanto Co and the Renewable Fuels Association (www.foodandenergy.org).

Lugar Wants Ethanol Tariff Eliminated

Sen. Richard Lugar (R-Ind.) has sent a letter to President Bush urging him to eliminate the 54-cent ethanol duty on imported ethanol to ease corn demand. “To demonstrate leadership, the United States should lift its tariff on Brazilian ethanol that now shelters the U.S. industry,” the senator stressed.

Lugar said eliminating the tariff would provide more competition and a better biofuels market in the long term. Brazil can provide ethanol to our coasts more efficiently than from our 15-state heartland,” Lugar said. “It is expected that the food crisis will endure a number of years and could have lasting effects. A situation of such long duration threatens to reverse any positive trends in the alleviation of poverty and improvements in health.”

NYT: Obama has close ties to ethanol industry

Surprise, surprise!

U.S. / Politics

Obama Camp Closely Linked With Ethanol

By LARRY ROHTER

Published: June 23, 2008

The ethanol industry has provided some top advisers to Senator Barack Obama, who has delivered ringing endorsements of ethanol as an alternative fuel.

Full story

Ethanol's Role in Corn Prices

Those who blame ethanol for high corn prices need to dig deeper - oil well deep, said a Purdue University agricultural economist.

"If you say biofuel production is the reason corn prices are going up, you would be right," said Wally Tyner, an energy policy specialist. "But the more important question is why biofuel production is up. Many have blamed the federal subsidy on ethanol, but today that is a small part of the overall picture."

The recent run-up of crude prices to $120 a barrel and more has had a profound impact on corn prices, Tyner said.

"Moving from $40 a barrel oil to $120 oil with no ethanol subsidy or Renewable Fuels Standard mandate in effect still leads to a tripling of corn prices," he said. "With no subsidy or mandate, corn moves from $1.71 a bushel at $40 oil to $5.26 a bushel at $120 oil. With the subsidy or mandate, corn moves from $2.26 a bushel at $40 oil to $6.33 a bushel at $120 oil.

Full story