E15 reaction: Vilsack, Harkin, Herseth Sandlin for; Johanns, RFA, NPPC concerned

By Jon H. Harsch

© Copyright Agri-Pulse Communications, Inc.

Washington, Oct. 13 – Agriculture Secretary Tom Vilsack welcomed the EPA announcement Wednesday approving E15 ethanol for 2007 vehicles and newer, calling the long-delayed decision “an important step toward making America more energy independent and creating much-needed jobs in rural America.”

Others weren't as positive. The Renewable Fuels Association (RFA) immediately warned that “EPA’s scientifically unjustified bifurcation of the U.S. car market will do little to move the needle and expand ethanol use.” RFA President and CEO Bob Dinneen said that “Limiting E15 use to 2007 and newer vehicles only creates confusion for retailers and consumers alike.”

Sen. Mike Johanns (R-NE) said the limited waiver raises questions about EPA’s “commitment to renewable fuels” and is another example of “This administration’s continued failure to stand up for domestic, renewable fuels and American farmers.”

Vilsack, however, welcomed the EPA decision, predicting that “The announcement will help get existing ethanol capacity into the market.” He explained that “Increasing the use of ethanol in automobiles and light trucks not only provides biomass and biofuel producers with additional revenue enhancing opportunities, it will help us reach the Obama administration's goal of increasing renewable fuels usage in the U.S. marketplace to 36 billion gallons by 2022.”

“Today's action by Administrator Jackson and the EPA provides assurance to farmers, ranchers and the renewable fuels industry that the government backs the use of home grown energy in our cars and trucks,” Vilsack said. But he also pointed out that “more work is needed and we hope EPA and the Department of Energy complete an evaluation of 2001-2006 models soon.”

Senator Tom Harkin (D-IA) welcomed the waiver while at the same time saying he will continue to press EPA and the Energy Department to approve E15 for all gasoline vehicles. “It is important that we continue our effort to promote biofuels and reduce our dangerous dependence on foreign oil. This is an effort that is good for the environment and for our nation’s energy security and one that will grow our economy while creating good, ‘green’ jobs in Iowa and across the county,” Harkin said.

Looking ahead, Harkin added that “In addition to promoting E15 – and even higher percentage blends – for vehicles, there is much more to do as part of our overall strategy to promote and grow the biofuels industry. I intend to urge action in Congress that will enable expanding markets for biofuels by increasing the number of blender pump stations across the country, increasing flex-fuel vehicles and incentivizing the construction of biofuels pipelines from production states to more populous areas. I also remain hopeful that the administration will finish testing soon and announce their decision to approve E15 for use in 2001-2006 vehicles, as well as reconsider its unfortunate decision to deny the waiver for vehicles older than 2000.”

Rep. Stephanie Herseth Sandlin (D-SD) commented that “This long overdue but welcome decision will cover an estimated 43 million motor vehicles and benefit South Dakota producers by beginning to expand markets for ethanol across the nation. Equally crucial is the expected approval later this year of E15 for model years 2001 to 2006, which would then cover a substantial amount of the vehicles on our nation’s roads, create jobs, and promise millions of consumers greater choice at the pump.”

The National Pork Producers Council (NPPC) took a different perspective on the E15 announcement, focusing on possible feed cost impacts. NPPC Ethanol Task Force Chairman Randy Spronk said that “The National Pork Producers Council is very concerned with the effect on America’s pork producers.” He said that NPPC is “withholding comment on raising the blend rate to E15 from its current E10 until we can consult with our economists.” But he warned that “any upward pressure on corn prices will have a negative effect on producers.”

Pointing to USDA's surprise Oct. 8 crop report cut expected yield and ending stocks for corn, Spronk said “We don’t want a repeat of a couple of years ago when, due mostly to high feed-grain prices, pork producers lost an average of almost $24 a hog from October 2007 through March 2010, and the industry lost nearly $6 billion. Family hog farms went out of business during that time, and many producers reduced the size of their herds.”

For Stewart Doan's audio on EPA's E15 split decision, go to: www.agri-pulse.com/Audio-Thursday.asp