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Posted on  

May 1, 2002

Ethanol Reaches Major Milestone in National Energy Policy

by Rod Swoboda

The U.S. Senate’s historic vote on April 25, 2002, to include a renewable fuels standard (RFS) in national energy policy is a major victory for Iowa’s corn growers and the state’s developing farmer-owned ethanol industry, says Lucy Norton, director of marketing for the Iowa Corn Growers Association (ICGA).

"This victory clearly signals that ethanol has reached a major milestone," Norton says. "After nearly 25 years in the marketplace, ethanol has now gained acceptance from a broad coalition of oil companies, environmental groups and policymakers. This progress should lay to rest the rhetoric and myths that have plagued ethanol for years and enable corn growers to move forward in producing and marketing ethanol on a global basis."

Within Iowa, the RFS could increase corn use by 150 million bushels in the next three years. By 2012, the United States could be putting more corn into ethanol than the amount of corn that the U.S. currently exports.

Ethanol may become bigger than corn exports

The standard will also encourage the growth of Iowa’s farmer-owned ethanol industry, according to Norton. "The RFS can help ethanol achieve its potential in markets like California and the East Coast. Increased ethanol demand will improve the profitability of Iowa’s new ethanol plants and provide market security for the nine plants currently in development."


ICGA took an active role in passing the RFS, working with agricultural, ethanol, oil and environmental groups. The National Corn Growers Association, a lead negotiator for this coalition effort, recognized the key role growers in states like Iowa played by contacting senators and building support for the measure.

The RFS, part of S. 517, won Senate approval by an overwhelming 88 votes to 11, late on April 25. The legislation, if it is approved by a House and Senate conference committee, will require oil refiners to use 2.3 billion gallons of renewable fuels like ethanol by 2004, increasing to 5 billion gallons - the equivalent of 2 billion bushels of corn - by 2012.

Other key elements of the bill would eliminate the reformulated oxygen requirement, ban the use of MTBE (a hazardous ingredient which pollutes water supplies) in four years, and create a renewable credit trading system.

This new legislation would help livestock industry

"We cannot overlook the benefits to Iowa’s livestock industry," says Norton. "Livestock producers also win with this victory, because of the feed co-product of ethanol production. That feed product which is left after the ethanol is made from corn is called distillers dried grains (DDG). It is a value-added feed ingredient that is high in protein, fat and fiber, which helps improve production efficiency."

The legislation, officially identified as S. 517, now moves to conference committee negotiations between the U.S. House of Representatives and the Senate. "Corn growers will be vigilant. They will work and lobby to see that the conference committee maintains the RFS provisions so that this bill can create tremendous growth opportunities for domestic, renewable ethanol," says Norton.

The Iowa Corn Growers Association lobbies on agricultural issues, representing over 6,000 Iowa grower members. Its mission is to create greater profit opportunities for Iowa corn growers.

 

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