Dinneen touts successes of ethanol industry at Orlando

By Susanne Retka Schill | February 24, 2012

Singing the praises of ethanol’s contribution to the American economy, Renewable Fuels Association President and CEO Bob Dinneen addressed the 17th annual National Ethanol Conference Feb. 23 in Orlando, Fla. “Despite a world-wide recession deeper and more severe than any since the Great Depression, the U.S. ethanol industry has been the fastest growing industry in the nation, with the value of our output growing by an average annual rate of 7.9 percent since 1998,” Dinneen told 1,200 attendees in his opening State of the Industry address. The U.S. economy grew just 2.2 percent per year on the average in that period, while the ethanol industry’s rate of growth beat the internet publishing and broadcasting industry, as well as the petroleum refining and oil and gas extraction industries.

“In the midst of hard times for our nation and the entire world, the American ethanol industry has become a critically important contributor to the economy,” he said, citing the accomplishments of the industry in producing a record 13.9 billion gallons of ethanol in 2011 while employing 90,000 workers.

He listed ethanol’s other contributions to the U.S., in reducing gas prices to the consumer as well as contributing to the reduction in oil imports and comprising a significant part of transportation fuel produced domestically, particularly of new production. “Ethanol has accounted for 81 percent of new domestic fuel production since 2005,” he said, adding that only recently has domestic oil production began to rise.

In addition to improved air quality, Dinneen stressed the success of the industry in the revitalization of rural American. “Ethanol has become the single most important value added market for farmers, stimulating investment and allowing farmers to get their income from the marketplace, not the taxpayer,” he said. He pointed to the increase in corn production. The last five corn crops have averaged 12.6 billion bushels compared to a 10.5-billion-bushel average in the previous five years and 9.6-billion-bushel average in the five years before that, when corn prices were around $2 a bushel. “That increased productivity has allowed the ethanol industry to grow without diverting corn supplies away from other important markets,” he said, adding there was more corn available for nonethanol uses in the recent five-year period than ever before.

A primary goal of the ethanol industry was to improve farm income, he reminded the audience, as well as reduce farm program costs and lift all of agriculture by creating new markets. “By that metric, I would say the state of the ethanol industry is proudly satisfied.” That success was aided by government policies, he admitted, both the tax incentive and the renewable fuel standard. The blenders credit was a success, he added. “We did not fight to keep it. It had done the job it was intended to do. It built an industry.”

But while the corn ethanol industry did not fight the loss of the tax incentive, Dinneen said it is critical that the industry remind policymakers that cellulosic ethanol needs policies to help it develop. Other priorities for the association will be to complete the work begun to rollout E15, encourage the growth of E85 and work with automakers to fully realize the octane benefit of ethanol.

Dinneen was followed by speaker James Canton, CEO and chairman of the Institute for Global Futures, who outlined the growth in world population in the decades to come, the need for food, water and energy resources and the potential impact on the United States. “The energy risk is the largest national security risk we face in this nation,” he said. “Our dependence on foreign oil is undervalued in Washington.” In analyzing the alternative energy options, he said, “Clearly biofuels are the future and they are the now. Biofuel is reality today and the only biofuel I know that can scale up quickly is ethanol.”  

“A bold, biofuel future is what we need to make America safe and sustainable,” he said, encouraging a longterm view on planning for infrastructure and industry development. He told the story of the earlier mindset in Detroit that Americans wanted their big cars and gas guzzlers and then pointed to a company that challenged that. “Toyota in the 1960s had a 25-year plan to penetrate the market,” he said. He encouraged the industry to go beyond getting biofuels in the pump to tie it all together and integrate renewable into the grid and the entire energy network. While wind and solar and nuclear are all alternative energy sources, “they are not as scalable as we need,” he stressed.  Bioenergy infrastructure is the future. “Think different, think big. From a national security point of view, we are at risk and ethanol and new advanced bifouel will protect America’s future economy and security.”