AN AUNT SHARES a painful account of her family’s tragedy in the hope of raising awareness of the need for bin safety and training. ......2
BIODIESEL ADVOCATES question how far biodiesel can go without federal tax support for expanded biodiesel production. .......4
CATTLE FEEDERS in Illinois and England face similar challenges, but the British farmers also must deal with more red tape. .......5
Monday, October 25, 2010
Three sections Volume 38, No. 43
Land use change charges overblown?
Administration backs biofuels, questions credit BY MARTIN ROSS FarmWeek
New studies confirm the potential economic benefits of corn ethanol and challenge its purported environmental costs. However, a new USDA report questions the economic justification of the soon-toexpire ethanol blenders tax credit seen by many as a key for biofuels development. In announcing several administration renewable fuels measures last week, Ag Secretary Tom Vilsack called biofuels production “a national imperative” that contributes to energy independence, greenhouse gas reductions,
job creation, and “a stronger foundation for the 21st century economy.” The federal renewable fuels standard (RFS2) requires 36 billion gallons of annual biofuels use through 2022. If biofuels production advances with “cost-reducing technology” and oil prices continue to rise, the RFS2 could provide benefits that include higher wages, increased household income, and lower overall import prices and higher export value, a new USDA Economic Research Service (ERS) report concludes. But ERS argued the level of economic benefits depends “importantly” on future oil
prices and whether biofuels tax credits are retained through 2022. In what a National Corn Growers Association (NCGA) spokesman Friday termed a “mixed bag” report, the agency suggested that if oil prices stabilized or declined from current levels and ethanol tax credits were retained, benefits to the economy would decline. The report comes as the industry lobbies Congress to extend the 45-cent-per-gallon blenders credit, which expires Dec. 31. University of Illinois and Iowa economists are exploring possible advantages of a variable-rate credit that
would fluctuate with oil prices or fuel blender cost margins. The national Renewable Fuels Association, the biofuels industry group Growth Energy, and NCGA have united to promote “the best steps forward for the ethanol industry,” GE President Tom Buis told FarmWeek. They face opposition from interests including the American Meat Institute (AMI), the Grocery Manufacturers Association, and the environmentalist Friends of the Earth, and Buis is concerned about prospects for credit extension in a postelection “lame duck” session. “Sometimes, lame ducks cre-
ate mad ducks: We don’t know how well everyone’s going to work together,” he said. Meanwhile, researchers at the U.S. Department of Energy (DOE) Oak Ridge National Laboratory last week concluded indirect land use change resulting from expanded corn ethanol production over the past decade likely has been “minimal to zero.” They estimated 85 percent of the feedstock used for ethanol expansion was derived from U.S. supply reallocations, with higher corn yields contributing another 6 percent. See Biofuels, page 4
E15 labeling key issue as industry gears up
Periodicals: Time Valued
In today’s risk-averse consumer environment, a thin piece of adhesive-backed paper sometimes can be all that stands between market growth and industry liability. Ethanol manufacturers and grower-suppliers thus are carefully monitoring federal pump labeling proposals as they continue the painstaking task of helping prepare state agencies, fuel blenders, suppli-
ers, and users for E15 (15 percent ethanol gasoline). The U.S. Environmental Protection Agency (EPA) has approved use of blends up to 15 percent in conventional 2007 and newer model cars and light trucks. EPA is expected to rule on E15 use in 20012006 modelyear vehicles after U.S. Department of Energy (DOE) testing is completed in November. Biofuels group Growth Energy President Tom Buis pushed for further testing in older “legacy” vehicles, but hailed “the first crack in the blend wall in 33 years.” He hopes EPA by year’s end will clear E15 use in “at least 55 percent of all the vehicles in America,” though many hurdles must be cleared before it hits the market (see page 4). One of those is development of a retail label to advise motorists of E15’s proper use. While further automotive studies are still under review,
EPA’s proposed label (pictured below) warns E15 use might damage vehicles other than 2007 and new models, and emphasizes federal restrictions against use in unapproved models and engines. EPA is soliciting comments on labeling rules. Given EPA’s dualtiered, “bifurcated” E15 ruling, Buis recognizes labeling as important to protecting retailers in the event of any legal claim related to misfueling of older vehicles. But Illinois Corn Growers Association market specialist Dave Loos stressed the need to ensure pumps bear “an informational label, not a warning label” that could cause consumer worries. “I think a lot of retailers are making assumptions about liability that may or may not occur,” Buis told FarmWeek. “EPA has indicated retailers won’t have liability for misfueling if they put the label on the pump and the label is enforced.
FarmWeek on the web: FarmWeekNow.com
“Maybe some of these fears will go away. I think we can get these things sorted out. But you don’t want a big bright orange label that says, ‘Caution,’ that discourages consumers. You want it to be factual.” He noted successful marketing of both high- and low-
sulfur diesel blends under federal regulations, arguing EPA and retailers “have experience in this bifurcation.” Buis cites biodiesel labeling — “a lot more neutral and less threatening to consumers” than EPA’s proposed E15 design — as a model for new pump information. — Martin Ross
TIS THE SEASON
Three-year-old Cody Long points to his next possible pumpkin selection as his mother, Sara Long of Moline, left, and his grandmother, Mary Anne Sherman of Davenport, Iowa, look on. They were making selections during a visit to Country Corner Farm Market and Pumpkin Patch near Alpha. Fall events for the business, owned by Bruce Curry, are listed on the website {country-corner.com}. (Photo by Ken Kashian)
Illinois Farm Bureau®on the web: www.ilfb.org