Farm Industry News


THIS SPRING'S high gas prices must give plenty of corn and soybean growers heartburn. Paying more than $2/gal. is painful, especially when the fields across the Midwest are filled with the ideal gas additive. It's times like these when we shake our heads and wonder why the ethanol, biodiesel and other renewable fuel industries face such an uphill battle getting renewable fuels into gas pumps. It's also frustrating to see the legislatures in big corn states like Iowa refuse to pass a mandate for 10% ethanol-blended gas when the state hosts an abundance of new ethanol plants. After all, its northern neighbor Minnesota has mandated 10% ethanol-blended gas for years. The Minnesota legislature is even looking at increasing the ethanol level to 20% in gas. As a result, Minnesota now accounts for 8% of the nation's ethanol market.

Flexible fuel vehicles can run on even more ethanol — an 85% ethanol blend called E85. Iowa alone has 45,000 vehicles that can run on E85 fuel but only 19 stations that sell it. You may drive an E85 vehicle and not know it. Look under the fuel door and check the decal.

Now it looks as if renewable fuels may finally get some help from Washington, DC. High gas prices have created a new political climate in the U.S. Congress. Currently, House and Senate committees are working on the Renewable Fuels Standard (RFS) to be included as part of the comprehensive energy bill. The RFS will require refiners to blend a certain amount of ethanol into the nation's fuel supply annually.

Although the energy bill has been debated for years without passage, this year may be different. “I think that all the forces are coming together to make it a very ripe environment in Congress for an energy bill to get to the president's desk by the end of the year,” reports Samantha Slater, director of public policy, National Corn Growers Association. She says that the enactment of an RFS will be important for continued growth of ethanol. “Having an RFS will provide market certainty for Wall Street and financial institutions to invest in the ethanol industry. Wall Street needs market certainty.”

We hope Slater's prediction is correct. The pain we're seeing at the pumps today may translate into more ethanol and other renewable fuels at the pump tomorrow.

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