The future of ethanol is running out of gas
The key ingredients of an impending ethanol collapse – the rapid rise of electric vehicles, lukewarm politics, and more evidence of catastrophic climate change – are in place, and few U.S. politicians are prepared to deal with it. this reality.
In fact, none of these woes are new; they’ve been building for years.
Decrease in demand
For example, the Trump administration’s almost carte blanche blending waivers for gasoline refiners have narrowed the biggest ethanol funnel in U.S. gasoline tanks.
Then, his first denials of the Covid pandemic helped block gasoline sales. In 2020, gas sales were 119 billion gallons; by comparison, they were 140 billion gallons in 2017.
The two have combined to reduce ethanol consumption, according to the US Department of Agriculture, from 15.7 billion gallons in 2017 to 13.7 billion gallons in 2020 while, incredibly, ethanol imports doubled from 77 million gallons to 144 million gallons.
The Biden administration’s biofuel blending plan, currently under discussion in the Office of Management and Budget according to Agri-Pulse, “is expected to propose reducing the renewable energy volume requirement for 2021 but increasing the mandate for next year “.
This two-way approach means, at best, a stagnant future for biofuels. “Farm and biofuel groups are pushing for 15 billion gallons of ethanol in targets and an increase to the 2.43 billion gallons of biomass-based diesel target set in recent RVOs,” Agri explained. -Pulse.
Good luck getting there because, in early August, the White House Biden announced its goal that up to 50% of all new cars sold by 2030 will be electric. American automakers, already on this path, eagerly accepted the challenge.
Neither of the Biden plans – reduced mandates to blend biofuels or increased government patronage of electric cars and trucks – signify an end to ethanol. Together, however, they make it clear that agricultural biofuels, and ethanol in particular, face a very difficult future in the years to come.
Corn rich states
The severity of the future remains to be determined, but corn-rich states like Iowa, where about 60% of the state’s field corn goes to ethanol plants, will be hit the hardest. Nebraska, the second largest ethanol producer in the country, will also crack.
In fact, Nebraska could face more pressure as much of its corn is grown under irrigation. The 2017 Agricultural Census, the most recent census figures available, shows that 4.5 million of Nebraska’s 9.5 million acres of corn that year was irrigated. (The 2017 agricultural census also shows that Nebraska has more total irrigated acres than California: 8.6 million versus 7.8 million.)
Nationally in 2017, 2.4 billion bushels. of corn were grown on 11.6 million irrigated acres using, on average, 325,500 gallons of water per acre. That same year of marketing, US ethanol plants used 5.6 billion bushels. of corn to make ethanol.
So sooner or later ever-greener U.S. taxpayers will want to know why the nation continues to use irreplaceable and increasingly scarce natural resources to produce federally-subsidized feedstock for a government-mandated biofuels market. federal government which – mandate or not – is likely to decline by at least a third over the next decade.
Does a farmer or a representative of a farming group want to try their luck?
On August 22, two Iowa residents, Matt Russell and Robert Leonard, embarked on an editorial published by the Food and Environmental Reporting Network, or FERN. Their idea positions biofuels with electric vehicles as allies and not enemies.
In short, they explain, while electric cars are likely the future, there will always be a large market for “liquid fuel” and “advanced biofuel” vehicles. “But the most sustainable market for liquid fuel will be heavy equipment, aviation and container ships.”
Perhaps, but Big Ag’s default position is to defend an increasingly indefensible blending mandate based on 50-year-old local fuel gibberish that has little relevance to the rapidly evolving gasoline market. and an already changed climatic reality.
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