Corn Farmers See Chance to Elevate E15

NCGA Points to E15 Options to Reduce Prices at Pump, Fill the Gap From Lost Russian Imports

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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At the National Corn Growers Association issues briefing at the Commodity Classic event, E15 legislation was a major topic. Using E15 fuel at just one-third of the nation's pumps would replace all the fuel lost by the ban on Russian oil, the group noted. (DTN photo by Chris Clayton)

NEW ORLEANS (DTN) -- As corn farmers gathered for their first major policy forum at the Commodity Classic show, the war in Ukraine and the effect it is having on fuel prices was a front-and-center topic on Wednesday.

More than 7,000 farmers and agribusiness people are meeting this week for Commodity Classic in New Orleans with a lot of focus on input prices, the spike in commodity prices and debate about energy all intermixed in the side conversations and events.

At the National Corn Growers Association issues briefing from policy staff, E15 legislation was a major topic, along with amplifying the message that biofuels can fill the void left by President Joe Biden's ban on Russian oil imports.

Meanwhile, prices at the gas pump continue to tick upward. AAA on Wednesday reported the highest average national gasoline prices the group has ever tracked at $4.25 a gallon for regular unleaded gasoline and $4.88 a gallon for diesel fuel. The E85 price also continues to tick upward at $3.67 a gallon.

Tim Burrack, an Iowa farmer, told DTN outside a meeting, "I never would have imagined I would be holding $5-a-gallon diesel fuel on my farm."

The Nebraska Ethanol Board had sent out a two-page primer highlighting that the entire volume of Russian oil imports by the U.S. could be replaced if roughly one-third of E10 pumps were converted to E15 pumps nationally. Russia's oil exports to the U.S. break down to somewhere between 1.3 billion to 1.7 billion gallons of gasoline, or about 10% of all ethanol production.

"That seems like a reasonable ask to offset the short-term impacts of the ban on Russian imports," said Jon Doggett, CEO of NCGA.

The Nebraska Ethanol Board primer noted that simply converting a key section of Midwest states -- most of which produce the most ethanol as well -- and shifting all their fuel from E10 to E15 would effectively replace 98% of all Russian imports.

"The conversion would utilize less than half of the unused ethanol capacity in the U.S.," the Nebraska Ethanol Board stated.

Several biofuel and farm groups, including the American Farm Bureau Federation, have written President Biden and his administration during the past week highlighting lower prices offered by biofuels and the capacity to meet the demand. Still, the administration has been turning to countries such as Venezuela, making the pitch to replace the lost Russian imports.

"We need to continue to have people talk about the role ethanol and renewable fuels can play, and amplify their voices," said Kathy Bergren, NCGA's director for public policy and renewable fuels.

At least some lawmakers are looking at ways to champion E15 as a solution to the higher fuel prices. NCGA has been touting the Next Generations Fuels Act by Rep. Cheri Bustos, D-Ill., and others, a bill introduced last August by Bustos that would expand fuels with higher octanes, increasing higher blend volumes of ethanol in the process. Corn growers and biofuel groups have continued to advocate for that bill.

As DTN reported, Iowa Sens. Chuck Grassley and Joni Ernst, both Republicans, introduced a bill Wednesday "to replace lost imports with biofuels, including ethanol and biodiesel." The bill would permanently ban Russian oil imports and ensure year-round use of E15 as well. (See "Iowa Senators Introduce Biofuels Bill" here:….)

Asked about the challenges of getting E15 legislation passed, Bergren noted, "There are certainly some people who don't support that who are in some gatekeeper positions."

That goes against President Biden's vow that his administration would "do everything they can to address fuel prices."

Yet, even as NCGA members were having their policy meetings Wednesday, the farmers learned that CHS Inc., the largest farmer cooperative in the U.S., had sent a letter last week to CHS' refined fuels customers informing them that because of regulations and last year's court ruling, CHS would stop selling E15 at its terminals on May 1, and Cenex retailers would not be allowed to blend or sell E15 between June 1 and Sept. 15.

"We understand the challenges these changes pose to your operations and your competitive position in the local marketplace," CHS stated in the letter to retailers.

Jan tenBensel, a Nebraska farmer and president of the Nebraska Ethanol Board, expressed his frustration over CHS' move, given that CHS is a farmer cooperative. tenBensel called on farmers to get on the phone with their local CHS affiliates and raise their concerns about the cooperative's plans.

"We've got a lot of pull here," he said. "We own CHS. The people in this room own CHS."

Iowa farmer Mark Recker asked how NCGA was countering the study out of the University of Wisconsin in mid-February claiming that ethanol production had higher greenhouse gas emissions than gasoline. Recker said that study "sucks the air out of us" when advocating the benefits of biofuels. Jon Doggett, CEO of NCGA, said the timing of the study "was not coincidental," given it came just before EPA was starting to meet to make changes to its models for counting greenhouse gases.

"Remember, it was one study, and we've got dozens on the other side," Doggett said.

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Chris Clayton