RFA President Bob Dinneen reflects on ethanol industry's accomplishments, and its direction

By | February 01, 2002
EPM: You've been with the Renewable Fuels Association for 14 years, seven months as president. What is it like to represent the industry at such a critical time?

Dinneen: "It is a true privilege to serve the farmers and investors building the ethanol industry. When I first joined the RFA, the ethanol industry produced about 600 million gallons from just less than 250 million bushels of corn. Today, there are 58 plants capable of producing over 2.3 billion gallons of ethanol per year from over 850 million bushels of corn. And 16 more plants are under construction - overwhelmingly farmer-owned facilities. So the ethanol industry hasn't just grown, its diversified. Now, as a group, farmer-owned plants are the single largest producers in the ethanol industry. The remarkable growth of the ethanol industry didn't happen over night. There are many people and companies who share the credit.

Even with all the progress, the ethanol industry has only begun to scratch the surface of its potential. This year could be key to growth for the next decade. With an energy debate in Congress, we are working to pass a renewable fuels standard. Such a law would set the ethanol industry on a track of predictable, sustained growth. The benefits to farmers, our energy security, and the U.S. economy would be enormous. The RFA is poised to play a critical role as this debate unfolds. But in reality, the ethanol industry has broad, bi-partisan support because it is a good fuel providing many benefits to this country. And the grassroots support of farmers is more important than anything."

EPM: While our readers know how meaningful a renewable fuels standard is to improving energy security, protecting the environment, and boosting rural economies, most Americans don't share our view. What can we do to change their minds?

Dinneen: "Quite frankly, I disagree with the premise of the question. I believe the vast majority of Americans do support policies like an RFS that reduce U.S. dependence of foreign oil by promoting domestic renewable fuels. In fact, recent public opinion polls by Newsweek magazine and the Mellman Group asked that very question and 73 percent of Americans agreed. So the public support is clearly there.

But there is strong opposition to an RFS from some in industries that rely on imported, non-renewable fuels. But what's in the best interest of this country - economically, environmentally, and for security - is to switch our "imported petroleum" energy policy to one that promotes domestic fuels like ethanol. A meaningful RFS would do just that."

EPM: RFA has welcomed several new members in the last year. What do these new members bring to the RFA? How does this benefit the industry as a whole?

Dinneen: "The RFA has been growing right along with the ethanol industry. We view that as an endorsement of the work we've done and encouragement to keep up the fight. The new RFA members have added new energy, diversity, and renewed commitment to seeing this industry grow.

But growing the RFA isn't important in and of itself. What's important is that the entire ethanol industry is united behind the goal of continued growth. The RFA is proud to represent everything from small investor-owned ethanol plants that produce just a few million gallons each year, to farmer-owned cooperatives that are rapidly growing in number and size, to publicly traded ethanol producers who helped establish the industry two decades ago. Big or small. Wet or dry. It doesn't matter. We all want to see this industry continue to grow. We're united behind that goal and, working together, we'll get it done."

EPM: How much ethanol will be in production by 2004 in the U.S.? How about 2010?

Dinneen: "That's a question we'd all like to be able to answer. What we do know is that for the last four or five years the ethanol industry has been growing at about 10 percent a year - that's pretty good for any industry. I see no reason why that won't continue in the future.

However, there is an opportunity to see the industry grow faster. Passing an RFS in the energy bill would be a big step. But questions remain. Will an energy bill pass? Will MTBE be banned nationwide? Will California and New York hold the line on their scheduled moves to ethanol?

The ethanol industry can ramp up production very quickly. We proved that over the last year. So we'll continue to work on public policies that allow rapid growth to occur. The ethanol industry could easily produce over 3 billion gallons in 2004 and over 5 billion gallons in 2010."

EPM: What does California mean to the ethanol industry?

Dinneen:
"California was the first big reformulated gasoline (RFG) state to announce a ban of MTBE, the gasoline additive that cleans the air, but pollutes drinking water. In order to maintain their air quality, California needs to blend ethanol in their gasoline to replace the banned MTBE starting January 1, 2003.

Unfortunately, some California officials questioned whether ethanol could replace MTBE. They question whether there was enough ethanol, whether it would work in their fuels program, and things of that nature. These were legitimate concerns stemming from a lack of knowledge of the ethanol industry.

We at the RFA immediately started working with California officials to educate them about the ethanol industry. Meanwhile, farmers and investors across the country started building ethanol plants to meet the new California market.

I feel all the questions have been answered satisfactorily. California's own Energy Commission determined enough ethanol will be available to meet their requirements. Further, the transportation industries are ready to move ethanol to California. And every single gasoline refiner and terminal operator in the state says they'll be ready for the switch by the end of this year.

Just as importantly, new data presented to California from the Auto Alliance clearly demonstrated that ethanol-blended fuels will maintain, and probably improve, their air quality. That data didn't come as a shock to people familiar with other RFG programs that use ethanol. In fact, the Chicago/Milwaukee RFG area is the very first RFG area to improve air quality sufficiently to ask the EPA for reclassification. In our minds, it's no coincidence they're the only RFG area to exclusively use ethanol-blended fuels.

We want California to maintain the existing MTBE ban deadline, which opens a market for about 675 million gallons of ethanol. There simply isn't a good reason to delay the ban and continue the MTBE contamination in the state.
Unfortunately, some people in California appear to be more worried about using ethanol from the Midwest than they are about continuing to use MTBE from the Middle East - a product that has already cost California taxpayers hundreds of millions of dollars in clean-up expenses." n