Ethanol Industry Continues to Battle for Market Share
The US ethanol industry is fighting hard for market share. They are battling 2 major forces, the government and the oil industry. It was a year ago that the EPA first announced its plan to reduce the amount of ethanol blended into US gasoline. The ethanol industry has been fighting hard to convince the Obama administration to reverse the EPA proposal. Jeff Broin, with Poet, Indiana’s largest ethanol producer, says the ethanol industry will stagnate and corn prices will move even lower without a reversal of the EPA plan, “As corn prices are falling, we have ethanol plants that are running below capacity; so we need the blend number to be higher, not lower, in order to stimulate demand.” He added that the EPA ruling is absurd given our large corn crop and ability to produce more renewable fuel.
Broin says there has been some progress in getting E-15 into the marketplace, but he urges farmers to press lawmakers to lessen regulations on renewable fuel in order to increase its use and market share, “We have made some progress with more pumps in the market, but we still have some obstacles to overcome.” The ethanol industry has been working for more than 5 years to get a 15% blend of ethanol into the gasoline supply. The blend has been ruled safe, but red tape and nuisance law suits continue to hamper its widespread use. Broin called on farmers to pressure their lawmakers to support less regulation of renewable fuels.
Ethanol is also battling big oil. While the oil companies realize this is a fight over market share, Broin says many in agriculture do not, “Agriculture and oil are in a war for the future fuel supply of the world. The oil companies know they are in this war, but many in agriculture do not, in my opinion.” He added that, unless ethanol is allowed to grow, corn prices will continue to decline. Broin says more unified action is needed by farm groups and farm organizations to make inroads against big oil.