Farmers to plant 90.5 Million Acres of Corn

USDA released its ‘Prospective Planting’ report this morning announcing American farmers intend to plant 15% more acres of corn this year — 90.5 million in all.  Based on the historic upward trend in corn yields, 13 billion bushels of corn production this year is quite likely.

These numbers reflect what many in the ethanol industry had long known - farmers would respond to the market signals.  Last October, it became clear that more corn would be needed for all uses and today we learn that farmers have answered the call.  This level of production also helps put to rest (or at least it should) the sky-is-falling arguments about food v. fuel.  As efficiencies improve and new technologies are developed in ethanol production and other sectors of agriculture, we can continue to feed and fuel this country.

Upon hearing the USDA report, RFA President Bob Dinneen had this to say:  “The market is working.  Last fall, farmers received the signal that more corn for ethanol, livestock and other uses would be needed, and today we learn they are answering that call.  The continued trend of increasing corn yields together with improved efficiency and new technologies in ethanol production and other agricultural industries will mean that American farmers will continue to feed the world while renewably fueling our nation.”

Lugar Drops US/Brazil Bill

Indiana Senator Dick Lugar has introduced legislation that would essentially put into law the memorandum of understanding signed by the US and Brazil earlier this month.  According to a release from Lugar’s office, the bill would:

• Establish a regional energy forum as a standing but flexible mechanism to advance energy issues and an emergency cooperation mechanism to deter political manipulation of oil trade;
• Undertake feasibility studies to assess each Latin American country’s biofuel needs and biomass production potential, with particular emphasis on helping the poorest countries in the region that are also dependent on foreign fuel, and attention to food security and the environment;
• Establish a grant program for advanced biofuels research collaboration;
• Increase international extension services for energy crops and conservation;
• Promote a carbon trading system to encourage preservation of tropical rain forests in the face of growing demand for energy crops;
• Seek ways to help optimize Mexican oil output, which is lagging to the detriment of the region, and encourage South America to exploit fully its natural gas supplies with new pipelines and liquefied natural gas facilities;
• Call for a study of political and economic impacts of the tariff on ethanol and the impacts of repealing or modifying it;
• Authorize to be appropriated $59 million for 2008 to implement this legislation.

The RFA is supportive of efforts to develop ethanol markets, both in the Western Hemisphere and around the globe.  Such development, however, must be undertaken by each nation individually and not come at the expense of US taxpayers or our own domestic ethanol industry. 

High Corn Prices Driving Up Food Prices? Maybe Not.

With demand for corn as strong as its been in history, farmers today are enjoying a market-driven price for their commodity.  But, with corn prices higher than the have been in recent memory, critics are pointing the finger at the ethanol industry for being responsible.  One of their principle charges is that the increase in corn prices will drive consumer food costs through the roof.

Not so fast says a report by Advanced Economic Solutions, commissioned by the National Corn Growers Association.  According to the report, the impact on consumers in the grocery aisles would be negligible if the expected corn production this growing season lowers prices to more historic levels.  Should corn prices continue to stay north of $3.50 a bushel for an extended period of time, the result could be 3-5% increase in food prices for consumers. 

The report illustrates this point by noting corn in the $3.50-4.00 range would raise the price for cereal and bakery items - like corn flakes and corn chips - by 1% annually. 

The complete report is available on the NCGA website. 

New Alt Fuels Mandate - 36B Gallons

Legislationintroduced by Senate Energy Committee Chairman Jeff Bingaman (NM) and Ranking Member Pete Domenici (NM) seeks to increase America’s consumption of alternative fuels to 36 billion gallons by 2022.  In addition to the new mandate, the legislation would seek to expand the infrastructure necessary to not only dispense the fuel but ensure consumers have the vehicles capable of using.  The bill would also increase bioenergy research to develop new sources of renewable energy.  And finally, it would require the Secretary of Energy to undertake a number of studies, including the impacts of higher ethanol blends (like E20), a dedicated renewable fuels pipeline, and optimization of E85-capable vehicles.

 More info on the bill can be found at the committee website. 

PBS - Presidential Biofuels Station

President Bush welcomed the heads of Detroit’s Big 3 automakers to the White House Monday to discuss the role of ethanol and other biofuels in achieving the president’s goal of reducing gasoline consumption by 20 percent by 2017.  Using this as a hook, the NewsHour with Jim Lehrer took a closer look at the merits as a replacement fuel for gasoline.

Participating in that discussion was RFA President and Promoter-in-Chief Bob Dinneen.  As you can tell from the transcript, the discussion did not lack passion as Dinneen took on ethanol armchair critic Robert Bryce over the wisdom of promoting the production and use of ethanol.

As Dinneen pointed out, ethanol is not the sole solution to our nation’s energy needs.  But it is a good foundation and logical place to start.  As he put it, if we don’t start taking steps now to diversify our energy supply, we will never achieve our energy goals.

The transcript can be viewed and heard here:

Online NewsHour: Analysis | President Urges Ethanol Cars | March 26, 2007 | PBS

Sens. Bingaman, Domenici to Offer New Biofuels Legislation

According to a release from Senate Energy Committee Chairman Jeff Bingaman (NM), he and Ranking Member Pete Domenici (NM) will hold a press conference to announce a new biofuels bill.  The bill, according to the release, “aims to expedite the entry of home-grown, economical, feedstock-diverse, biologically-derived fuels into America’s transportation fuel mix. The bill would expand and improve upon existing Federal renewable fuels policies and address issues that impact distribution of biofuels throughout the country.”

 More on the bill specific can be found on the Ethanol Report following tomorrow’s press conference.

Bush, Big 3 Promote FFVs

Ina meeting at the White House today, the heads of Detroit’s Big 3 automakers met with President Bush to reaffirm their commitment to manufacture half of all their new vehicles as FFVs by 2012.  Following the meeting, President Bush noted:

“I found it very interesting that by 2012, 50 percent of the automobiles in America will be flex-fuel vehicles.  That means that the American consumer will be able to either use gasoline or ethanol, depending upon, obviously, price and convenience.  That’s a major technological breakthrough for the country.  If you want to reduce gasoline usage, like I believe we need to do so for national security reasons, as well as for environmental concerns, the consumer has got to be in a position to make a rational choice.  And so I appreciate very much the fact that American automobile manufacturers recognize the reality of the world in which we live and are using new technologies to give the consumers different options.”

Echoing those remarks, GM CEO Rick Wagoner said:  “…a near-term opportunity that we are moving on right now, as the President cited, is flex-fuel vehicles that are powered by E85 ethanol.  There are millions on the road today.  As a group, we’ve agreed to double our production by the year 2010, and then have 50 percent of our production E85-capable by the year 2012.  This makes a big difference, and there’s nothing that can be done which can reduce the curve of growth in imported oil and actually turn it down like using E85, taking advantage of what’s there today.”

There are roughly 1,100 gas stations across the country that offer E85 for an estimated FFV fleet of nearly 6 million vehicles.  Being able to utlilize high ethanol blends, such as E85, will be a critical component to achieving the kind of gasoline consumption reductions and renewable fuel use that President Bush and members of Congress are calling for.

Ethanol Burns Gas

The RFA was pleased to join with the Ethanol Promotion and Information Council (EPIC), the IndyCar Series, and Sens. Richard Lugar and Evan Bayh to celebrate Indy’s switch to 100 percent ethanol.  Also on hand were Indy Racing League founder and CEO Tony George and the #17 Team Ethanol car driver Jeff Simmons. The event also coincided with former VP Al Gore testifying about the impacts of climate change.  The importance of Gore’s appearance on the Hill was not lost on those in the ethanol industry.

“Seeking answers to global warming must include a discussion of the role renewable fuels can play in reducing our nation’s greenhouse gas emissions,”said RFA President Bob Dinneen.  “Today’s ethanol industry is helping to reduce greenhouse gas emissions by more than 8 million tons a year, the equivalent of removing more than 1.2 million cars from the roads.  As new technologies develop and efficiencies improve, ethanol will remain on the leading front in the battle against global warming.”

EPIC Executive Director Tom Slunecka noted, “The use of 100 percent fuel-grade ethanol in the IndyCar Series is a powerful demonstration of the performance and environmental benefits of this homegrown, renewable fuel. Ethanol is available now to consumers to address the clean air challenges of present and future generations, as well as a critical component of a more secure energy future in America.”  

Follow the #17 Team Ethanol car HERE as it competes in the IndyCar Series, which includes the Indianapolis 500.

UL Sets Timeline for E85 Certification

Underwriters Laboratories (UL) today issued a public timeline for the certification of E85 dispensing pumps.  According to the UL release:

“UL expects to be prepared to accept products for evaluation and certification.  UL currently expects to finalize research and publish certification requirements by the end of the fourth quarter of 2007 and, immediately thereafter, accept E85 dispensing equipment for investigation to the safety requirements and certification of compliant equipment.”

The RFA welcomed the timetable and underlined the U.S. ethanol’s commitment to public safety. 

“Safety is of the utmost concern to the U.S. ethanol industry and we are committed to ensuring our product can safely be delivered to the public,” said Bob Dinneen, president of the Renewable Fuels Association, the national trade association for the U.S. ethanol industry.  “Through the continued cooperation between our industry, the Department of Energy and UL, we hope to expeditiously bring to a close any questions about the safety of E85.  UL’s certification of E85 dispensing pumps is critical to the growing use of higher ethanol blends.”

The completion of this research will allow UL to work with government and industry to create consensus standards, which they note “have a long history of providing both public safety and rapid market access for new technologies such as E85.”

RFA, EPIC Bring Team Ethanol Indy Car to Capitol Hill

The RFA and the Ethanol Promotion and Information Council have teamed up to bring the Team Ethanol Indy car to Capitol Hill on March 21.  Join the two ethanol industry groups will be Indiana Senators Richard Lugar and Evan Bayh as IndyCar Series President and CEO Tony George.  Also on scene will be the driver of the #17 Team Ethanol car Jeff Simmons.

The event coincides with a visit by former veep Al Gore to testify before House and Senate committees on issues relating to climate change.  Ethanol and other renewable fuels must be part of the discussion as they are a useful and necessary tool to addressing the greenhouse gas emissions associated with motor vehicles.  Specifically, the use of nearly 5 billion gallons of ethanol last year reduced greenhouse gas emissions by 8 million metric tons.  That is the equivalent of removing more than 1.2 million cars from American roads. 

Complete coverage of the event will be available here on the Ethanol Report.