Commentary: Requiring use of imported ethanol is stupid
There is no reason to alter the Renewable Fuel Standard (RFS) when the U.S. is importing ethanol from foreign sources, mainly ethanol made from Brazil’s sugarcane. And the reason this ethanol is coming into the country is Big Oil and environmental activists playing together against corn ethanol.
click image to zoom The Renewable Fuels Association (RFA) reported U.S. ethanol exports “surged to 82.4 million gallons in November, with large volumes finding their way into new or emerging markets such as China and India, as well as the Philippines, Tunisia, Panama and Mexico.”
So, with all this U.S. ethanol good enough for the rest of the world, why isn’t more of it staying home? It seems like a natural question that the American public would be asking since a main idea behind the RFS is to wean the U.S. economy off imported energy sources. And the U.S. currently is the low-cost producer of ethanol, according to the RFA.
The problem seems to be that the federal RFS and the California Low Carbon Fuel Standard (LCFS) classify sugarcane ethanol production as being superior to corn ethanol in terms of causing less greenhouse gases (GHG). So, even though sugarcane ethanol can cost more than U.S. corn ethanol, oil refiners are effectively required by the RFS and LCFS to use some amount of imported ethanol in order to meet GHS reduction requirements.
The RFA has contested the Environmental Protection Agency’s GHG analysis of sugarcane ethanol production being much better than corn ethanol from day one of the RFS. Not allowing the use of more corn ethanol in the U.S. isn’t saving the planet because there are all kinds of ways to look at the GHG situation, but most importantly, that corn ethanol is being produced and being burned all around the world.
The U.S. corn ethanol plants and ethanol itself are not major polluters of the world, as some activists would like to claim. And too many in Congress, the California legislator and Environmental Protection Agency have bought into the baloney of blaming corn ethanol for world problems from air pollution to keeping food from starving populations.
As the RFA continues to request, let’s have the standard blend of ethanol in gasoline increased to 15 percent from the current 10 percent. Big Oil should be forced to blend more ethanol into U.S. gasoline, just like Brazil requires a high blend mix in its country. There is even a market for U.S. corn ethanol in Brazil because of the price difference between its sugarcane ethanol and corn ethanol.
If the U.S. won’t use corn ethanol, then the rest of the world can prosper from using U.S. ethanol.
What will happen once cellulosic ethanol becomes a bigger part of the U.S. ethanol production is still unknown. The cost of cellulosic ethanol compared to corn and sugarcane ethanol will be a factor, but the EPA has suggested that it sees cellulosic ethanol as being better than sugarcane ethanol in terms of GHG impact. So, if large cellulosic ethanol volumes come online in the near future, it would reduce the need for sugarcane ethanol imports to meet the RFS requirements.
It isn’t that sugarcane ethanol production and use is protecting the U.S. environment to any great extent. A large portion of corn ethanol doesn’t even leave North America. From the latest government data, in November, Canada was the leading importer of U.S. ethanol and Mexico began importing a sizeable volume, too.
The most encouraging part of the recent report on U.S. imports and exports is that ethanol imports were lower in November than any month since February, 2012, and drastically lower than the fall months of 2012 and summer months of 2013.
Simply put, it is stupid to limit use of U.S. corn ethanol and require imports of sugarcane ethanol.
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