Good Riddance, 2019

FROM THE JANUARY ISSUE: 2019 was a challenge for ethanol, but 2020 offers opportunities for progress and improvement.
By Brian Jennings | December 16, 2019

Maybe it was the weather, poor markets, or the depressing combination of both. Whatever the reason, most of us are eager to slam the door on 2019.

A trace of good was offset by bad and ugly. The U.S. EPA issued a rule in May to finally allow the year-round sale of E15 and New York followed in November by adopting a regulation enabling retailers to sell the fuel in the Empire State. But 2019 was dominated by bad weather, bad markets, bad profit margins, the ugliness of trade wars, and EPA’s mismanagement of the Renewable Fuel Standard.

For far too long, farmers and ethanol producers who have been trying to help EPA successfully implement the RFS have instead encountered an agency persistently siding with refiners to constrain ethanol use. Under former President Barack Obama, it was the E10 “blend wall” waiver. We sued EPA, and in 2017 the D.C. Circuit Court of Appeals ruled the agency must restore 500 million gallons to the RFS. EPA has yet to comply with the court order. Under President Donald Trump, it’s been the unchecked abuse of the RFS small refinery exemptions (SRE). We’ve sued EPA (again), legislation to combat SRE abuse has been introduced in Congress, and we hope the president convinces EPA to reallocate future waivers, but the painful reality is EPA and refiners have us constantly playing defense and losing the overall battle over the RFS.

The weather is obviously out of our control, but the strategic direction we take in 2020 is not. Will we keep doing things the way we have always done them in hopes the outcome will be better this year, or will we turn the page and take a new approach? Instead of merely playing defense on the RFS and hoping E15 and export markets develop quickly, ACE has decided to go on offense with government relations strategies to increase ethanol use beyond current levels based on its high-octane and low-carbon advantages.

Early this year, ACE will join a diverse set of agriculture, renewable energy and environmental groups to publish a white paper outlining the economic benefits of expanding the use of ethanol and other low-carbon fuels in the Midwest and advising Midwest governors and state legislators on how to develop new clean-fuel programs. Despite the gridlock dominating Washington, D.C., many state-level elected leaders have a genuine interest in expanding the use of ethanol as a low-carbon fuel. Our white paper will serve as a roadmap for how to properly craft Midwest clean fuel programs to reward ethanol producers and farmers for being part of the solution to reduce greenhouse gas (GHG) emissions.

As Congress focuses on climate change, ACE has been lobbying for bipartisan support of a new policy to expand ethanol use, reduce GHG emissions, and revitalize the rural economy called the Low Carbon Octane Standard. By increasing the octane rating of gasoline, the LCOS improves the efficiency of engine technologies, giving automakers a tool to comply with fuel economy standards. The LCOS would also require the source of octane to deliver significant GHG reduction benefits compared to gasoline as measured by the U.S. Department of Energy’s Greenhouse Gases, Regulated Emissions and Energy Use in Transportation (GREET) life cycle model.

Defense of the RFS will remain a priority for ACE. We will ride herd on EPA’s “reset” rulemaking this year and try to get the program back on track. Expanding the use of E15 and developing the market for E85 and mid-level blends will continue to be our marketing priorities. ACE will also help support exports of ethanol by working in partnership with the U.S. Grains Council. While we keep at these core functions, ACE will lay the groundwork for increasing the use of ethanol domestically through the new low-carbon, high-octane legislative initiatives.

To 2019, let’s say, “Good riddance.” It wasn’t nice knowing you. Together, let’s work to make 2020 a year for new and bold policy steps to expand ethanol use.

Author: Brian Jennings
Executive Vice President,
American Coalition for Ethanol