Lessons from the Front Lines

(Note: Throughout my 22 years with the RFA, I have benefited from the counsel of those in the industry who are on the front lines producing and marketing ethanol. Nathan Kimpel, one of the founders of the RFA and a long-time board member, is retiring soon. I thought it appropriate for him to take this space this month to share his counsel with you.—Bob Dinneen)
By Nathan Kimpel | August 27, 2010
In nearly three decades of experience helping to develop policies and establish markets for American-made ethanol, I am truly proud of, but certainly not surprised at, what we have accomplished. Since the beginning, America's ethanol industry has lived by the mantra that a rising tide will lift all boats. The industry has fought back efforts from oil companies to limit the use of our product. We have projected a unified voice to members of Congress beginning in the Jimmy Carter administration to win legislative and regulatory victories that have created new markets and allowed for the incredible diversity and innovation in the industry today. Due to this success, and a perceived lack of unity today, we have attracted a plethora of new enemies that smell the proverbial blood in the water. I am here to tell you that this scenario has played out before. Each time, the industry ultimately stood strongly together.

This is not the first time that critics have challenged ethanol. Almost from day one, Chicken Littles from across the globe have warned that using grain starch to produce ethanol will lead to widespread starvation and skyrocketing food prices. Neither have come to pass. Instead, American farmers have dramatically increased their productivity. Since New Energy's beginning in 1984, corn used for feed is up 30 percent and exports are up 59 percent. We ethanol producers have improved our efficiencies, increased our yields, and provided improved coproducts that turn each bushel of corn into more than just renewable fuel.

Nor is this the first time we have had to fight oil interests on Capitol Hill, in the administration, and in state capitals all across the country to ensure the market monopolized by oil was opened to renewable fuels. Each time, we have been successful. I have no doubt we will prevail again.

And, while it may seem that we face an uphill battle in extending key tax incentives, we have seen this hill before. Despite repeated warnings about our addiction to imported oil, it strikes me as foolish that permanent subsidies for the oil industry are imbedded in the tax code while renewable technologies such as ethanol must come before Congress with hat in hand every few years. Nevertheless, we have been successful because we all meticulously spelled out the benefits domestic ethanol production offers. Current perception of an industry divided on this issue make the current effort more complex, yet I still believe the industry will coalesce around policies that provide the most good for the most people, and we will see federal investment continue.

Retiring from an industry about which I feel a sense of paternalism is bittersweet. I am extraordinarily proud of the ethanol industry, my fellow members of the Renewable Fuels Association, and our champions on Capitol Hill for their perseverance and dedication to an industry we truly believe is doing the right thing.

While I feel pride looking back, I am excited for what is to come. The industry is just now beginning to gets its feet underneath it. It is deciding what it wants to be when it grows up and is pursuing those policies and technologies that will make it happen. Now is a critical time in the industry's history. We cannot afford to let disagreements over 10 percent of the industry's agenda detract from the important 90 percent on which we all agree. What this industry is trying to accomplish, together with our friends in agriculture, is too important to allow it to be derailed. I strongly urge my colleagues to seek out that middle ground, rediscover that important unified voice, and always keep a long term perspective in mind. They say history repeats itself. In the case of America's ethanol industry, I certainly hope that is the case.

Nathan Kimpel, New Energy Corp., South Bend, Ind., is a retiring RFA board member. Reach him through RFA at (202) 289-3825.