Whether you are for or against ethanol, this is an interesting read.
And by the way, Sunoco, which runs the ethanol plant in the town of Volney outside Fulton, NY, would not comment on this story.
The National Corn Growers Association expressed outrage last week in the
wake of an announcement by the U.S. Environmental Protection Agency that
will significantly weaken the Renewable Fuel Standard by reducing the
volumes for corn-based ethanol for 2014.
“This recommendation is ill-advised and should be condemned by all
consumers because it is damaging to our tenuous economy and
short-sighted regarding the nation’s energy future,” said NCGA President
Martin Barbre. “Agriculture has been a bright spot in a failing U.S.
economy, but current corn prices are below the cost of production.
EPA’s ruling would be devastating for family farmers and the entire
The Environmental Protection Agency’s proposed renewable volume
obligations set the annual targets for the utilization of cellulosic,
biodiesel, advanced and total renewable fuel within our transportation
fuels. The proposed rule caps corn-based (or conventional) ethanol at 13
billion gallons. These proposed volume obligations are a drastic
reduction from the mandated RVOs in statute. Today’s proposed rule cuts
1.4 billion gallons from the conventional ethanol cap that was set at
14.4 billion gallons.
Barbre noted the EPA proposal will make investments in new biofuels
plants very risky, stagnate investment in infrastructure by petroleum
marketers and send the wrong signals to automakers who want more
direction on where they should be spending millions of targeted
investments on research and development.
“Ethanol and the RFS have been a great success story. Now, the EPA is
sending a terrible message that we no longer have a long-term energy
policy for biofuels, which was the original intent of this
forward-thinking legislation," Barbre said.
"The Administration has clearly backed away
from their commitment to renewable energy and this proposal blatantly
contradicts the President’s Climate Action Plan,” Barbre said. “The goal
of the RFS is to reduce our dependence on imported oil to make our
country more energy independent and more secure. It has done that while
also revitalizing rural America.”
According to the U.S. Energy Information Administration, U.S. oil
imports have decreased from 60 percent of our total usage to 45 percent.
This was due to increased efficiency in our automobile fleet, the
recession and the increased use of biofuels.
American farmers are currently harvesting their corn crops, and by the
latest USDA projections, it will be a record 14 billion bushels. As a
result of this record, corn prices are falling and currently stand close
to where they were when the RFS was enacted in its current form in
While corn prices have returned to previous levels, the cost of
producing the crop has continued to increase. In 2012, it cost $655 per
acre to plant corn. Based on this year’s projected yields, a farm price
of $4.25 per bushel would be required to cover production costs.
The psychological impact of EPA’s proposal is anticipated to push corn
prices well below the cost of production. To further put this into
perspective, if corn prices dropped to $3.50 a bushel farmers and the
rural economy would lose more than $10 billion.
“A shock of this magnitude to agriculture markets would send ripples
throughout the entire economy. Congress must carefully weigh the
ramifications any changes to the RFS would have on agriculture and
related industries. The U.S. economy and consumers can ill afford a
downturn in this sector,” Barbre said. “EPA is making a conscious
decision to limit ethanol’s access to the market even with the
significant price advantage of ethanol compared to gasoline.”