ICM: Why we must keep the renewable fuel standard

By Dave Vander Griend, CEO of ICM Inc. | September 05, 2012

I was disappointed to read the Aug. 24 Wichita Eagle editorial titled “End Ethanol Mandate.” It was important for us to provide factual information instead of misinformation.

First, the U.S. ethanol industry stands on its own, with no federal taxpayer support. Can the century-old oil industry say this? Absolutely not! Big Oil continues to receive billions of dollars annually in tax incentives.

Second, America’s economic prosperity was established by open competition and utilization of cheap energy resources. The RFS is NOT a mandate, but a critically-important market access tool that provides up to 10 percent of the fuel supply. Without the RFS, the only choice for consumers would be 100 percent petroleum-derived gasoline.

The drought’s impact has been difficult, but let’s be clear—the ethanol industry wasn’t the cause, nor did it cause $8.00 per bushel corn prices.  Similar to petroleum refiners enhancing crude oil into gasoline and other valuable products, ethanol plants essentially “refine” feed grains into valuable high proteins/oils. Additionally, our industry converts less valuable starch portions to produce high octane, clean-burning fuel.  According to research data compiled by ICM and Monsanto, U.S. ethanol production results in corn’s net usage at a rate of 16-20 percent of domestic corn production (not 40 percent as the media reports). From 2002-‘11, there were an additional 1.3 billion corn bushels contributed to the U.S. feed/food supply because the ethanol industry was a significant marketing choice for grain producers.

An August 23 Bloomberg article stated, “Ethanol, the best-performing energy commodity this year, is cheaper than gasoline, encouraging refiners to use the biofuel.  A 48 cent-per-gallon discount to gasoline provides companies including Exxon Mobil and Valero Energy an opportunity to profit by blending the corn-based additive into fuel, while easing prices at the pump for consumers. Marketers use ethanol as they look for the cheapest way to boost engine performance and reduce pollution.”  Until Big Oil stops placing barriers to expanded market access for ethanol, the RFS is needed. 

Our industry has successfully proven its ability to transform ag raw materials into high quality feed, food, high octane fuels, while creating quality jobs in rural communities and expanding tax bases along the way. For all these reasons, we’re proud of this industry’s accomplishments and must keep the RFS.

Dave Vander Griend
CEO, ICM, Inc.