TWO INDUSTRY analysts are projecting oil prices once again may hit triple digits, leading to pain at the pump. .....................2
ETHANOL PLANTS have reduced water used per gallon of ethanol by more than 50 percent; more may be possible. ................3
T H E U. S . E PA r e c e n t l y extended the deadline for complying with its spill rules for a limited number of farms. ...........................4
Monday, October 18, 2010
Two sections Volume 38, No. 42
EPA E15 announcement draws mixed reactions BY DAVE MCCLELLAND FarmWeek
Periodicals: Time Valued
The U.S. Environmental Protection Agency’s (EPA) ethanol announcement last week was mildly hailed by some and generally assailed by others. EPA announced it was waiving the limitation on selling motor fuel that contains 15 percent ethanol — but only for model year 2007 and newer cars and light trucks. Since 1979, the amount of ethanol in gasoline has been limited to 10 percent, and that remains the limitation for model year 2000 and older cars and light trucks. A decision on the use of E15 in 2001 through 2006 model year vehicles is not expected until testing is completed in November. Congress has mandated the production and delivery of 36 billion gallons of renewable fuels by the year 2022. Last week’s announcement means 43 million cars and light trucks will be able to use gasoline containing up to 15 percent ethanol. “With the move to E15, we’re creating a bigger market for American ethanol,” said Philip Nelson, president of
Illinois Farm Bureau. “With more ethanol production, we’re creating more jobs (estimated by some at 136,000), reducing our depen-
FarmWeekNow.com Check out audio comments and reactions to the E15 decision at FarmWeekNow.com.
dence on foreign oil, improving our environment, and strengthening our national security,” said Nelson. For some, the EPA announcement was akin to their favorite football team failing to score after four tries from the one-yard line. They
were heartened that they got that far; disheartened that they couldn’t punch it across. “We’re disappointed in the very limited scope of this approval, but pleased the EPA has finally taken action to partially approve the waiver request to allow higher blends of ethanol in some motor vehicles,” said National Corn Growers Association (NCGA) President Bart Schott. “We believe this bifurcation (allowing use of E15 in come vehicles but not all) of the approval process, and the labels that are expected to be placed on higher-blend fuel pumps, can lead to general consumer confusion and,
therefore, act counter to the original intent,” he said. “Limiting E15 use to 2007 and newer vehicles only creates confusion for retailers and consumers alike,” said Bob Dinneen, CEO of the Renewable Fuels Association. “The goals of Congress to reduce our addiction to oil captured in the Renewable Fuels Standard cannot be met with this decision.” “EPA’s decision certainly isn’t the best-case scenario,” said Tim Lenz, president of the Illinois Corn Growers Association. “The bright spot is that this decision by EPA does start the ball rolling on the long list of
paperwork processes that have to happen to get any new fuel to market. No decision from EPA would have meant no progress on that front. For this, we are grateful,” Lenz said. ICGA and NCGA continue to point to a recent research study partially funded by the Illinois Corn Marketing Board that supported use of E15 in cars and light trucks built between 1994 and 2000. Livestock producer groups were skeptical about the EPA announcement and what it may mean for feed prices. “Corn ethanol production See EPA, page 2
Commodity groups: Enough corn for all users BY DANIEL GRANT FarmWeek
Commodity groups are working to reassure customers around the world that the U.S. corn supply will satisfy demand. Concern about corn supplies cropped up when USDA on Oct. 8 shocked traders by cutting its corn production estimate for the current U.S. crop by 500 million bushels. That news was followed last Wednesday with the U.S. Environmental Protection Agency’s decision to raise the ethanol blend level from E10 to E15 for 2007 and newer vehicles. Corn prices the past week subsequently jumped to twoyear highs based on the tighter supply and increased demand. U.S. corn production this year is projected to be close to 12.7 billion bushels compared to the previous estimate of 13.2 billion bushels. The U.S. Grains Council (USGC) “does not anticipate these production levels will dramatically alter the U.S. position in the global marketplace in the long-term,” said Tom Dorr, president and CEO of USGC. “In the short-term, however, it will have an effect on prices and we need to be
sensitive to that.” A number of market analysts last week recommended end-users, such as livestock producers, extend their coverage on any price breaks and attempt to lock in a basis on corn. But while prices are expect-
ed to be higher, the National Corn Growers Association (NCGA) still expects a corn surplus this year. Total corn production (12.7 billion bushels) and ending stocks (1.7 billion bushels) would cover the demand estimate of 13.5 billion bushels
and still leave ending stocks near 1 billion bushels. “This may not be a record year, but we’re bringing in the corn and meeting all needs, even for our export markets,” said Bart Schott, NCGA president. See Enough, page 4
MOVING CORN
Chris Herring, Ipava, (in the tractor cab) and Steve Shockency, Astoria, (standing in the semi) were moving corn out of a field near Astoria last week. They work for Brian and Jennifer Lehman, Vermont. Lehman reported his corn yields were down about 25 percent this year while soybean yields were average. The Lehmans expected to finish harvest early this week. (Photo by Ken Kashian)
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