Dinneen: 'Elections matter'

By Tom Bryan | October 22, 2014

Two weeks from Election Day, Bob Dinneen told a crowd of international grain and animal feed buyers gathered in Seattle that whichever party controls Congress next year will “have the gavel” on energy and agriculture but lack the power to advance or upset biofuels policy.   

“Elections matter,” Dinneen said, citing President George W. Bush’s unlikely ascendance into ethanol industry favor when he signed both Renewable Fuels Standards into law in 2005 and 2007. “If Gore would have won [in 2000], his vision for renewables would have been more reaching but it would have had a climate change component and probably not taken up by Congress,” Dinneen said. “If McCain would have won [in 2008], he would have tried to dismantle the RFS.”

Dinneen said Obama’s current 41 percent approval rating isn’t terrible as public support for second-term presidents goes, but it is a signal of the trouble awaiting Democrats on Nov. 4. “The Democrats have more seats to defend, which means they’re on the defensive,” Dinneen told attendees of the 2014 Export Exchange in Seattle. “Republicans only need to pick up six seats to take the Senate, and where those seats are makes it more likely to happen.”

Most Senate races are still tough to predict, Dinneen said, but several national news outlets have already called the victor. The Washington Post recently predicted that it is a 94 percent certainty that Republicans will take the Senate, while the New York Times estimated the same outcome with 68 percent certainty. Dinneen reminded the audience, which included delegations from 34 different nations, that either party needs “51 percent to get the gavel, but 60 percent to get anything done.” Nevertheless, he said, a Republican controlled Senate could have implications for the ethanol industry, depending on the inclinations of the reigning party’s committee chairs. Notably, the Washington Times recently reported that seven in ten likely voters believe Republicans will retain control of the House.     

One of the few things that is expected to be accomplished between the elections and the start of the next Congressional session is the passage of a continuing resolution, or “CR,” that would extend certain renewable energy provisions including tax credits for biodiesel and renewable diesel, cellulosic biofuel and biofuels pump installation. Meanwhile, there is still no word on when the U.S. EPA will release its 2014 renewable volume obligation numbers, or RVOs. Dinneen said the EPA’s RVO suggestions “make no sense,” showing no sign of letting up on the agency in light of unsubstantiated reports that its forthcoming RVO numbers will be higher than initially thought. Holding the line, Dinneen said the EPA can only reduce the RFS schedule if there is inadequate supply of biofuels. The lack of infrastructure, on the other hand, is not a valid reason for deferment, he said. “Everyone knew we were going to put 36 billion gallons of renewable fuel into a 140-billion-gallon market,” Dinneen said. “Congress knew we were going to move past 10 percent. So the EPA’s suggestion that we need to roll back the RFS because ExxonMobil can’t use E85 is ridiculous.”    

Dinneen said whatever the outcome of the 2014 RVO, one or more industries will be disgruntled over it. “This rule will be litigated,” he said, adding that he expects the oil industry’s campaign against the RFS to continue for years.   

Dinneen touted the industry’s progress in the cellulosic ethanol arena, pointing to the start of commercial production at Poet-DSM and Abengoa Bioenergy. “It’s happening now,” he said, explaining that cellulosic ethanol producers view policy uncertainty as their largest risk. “It’s no time to be pulling back the program.”  

Addressing industry growth, Dinneen said getting E15 into the marketplace has been slow but steady, and he said ethanol exports may reach 800 million gallons in 2014, and perhaps trend toward the 1 billion mark in 2015. Showing a chart of the world’s top U.S. ethanol importers, Dinneen said, “If this country doesn’t take it, others will.”

Circling back to politics, Dinneen said today’s $3 corn could “drive painful decisions” for American agriculture. “If the ethanol industry is not allowed to grow, and corn exports don’t grow, and the carry out is big, deficiency payments [to U.S. corn farmers] are likely,” he said, calling for a return of bipartisanship amongst farm-state policy makers. “Ag needs to get back together and fight these fights together,” he said. “Or we’re going to lose.”