In the weeks leading up to EPA’s recent Renewable Fuel Standard (RFS) requirement announcement – and also in the hours that followed it – the ethanol lobby was keen to point out how EPA’s decision to use its waiver authority and mandate biofuels at levels lower than what is written into the law (but still above what the fuel supply can likely handle) is hurting their industry. The National Corn Growers Association President Chip Bowling went so far as to say, “any reduction in the (mandated biofuel) statutory amount will have a negative impact on our economy, our energy security, and the environment.” Yet, as the figures show, nothing could be further from the truth.

Since May, when EPA’s proposed RFS rule was unveiled, ethanol’s doomsayers have said the mandate has not been doing enough to help the industry. If that really is the case, somebody needs to tell the Energy Information Administration (EIA), whose data in the chart below shows that production for January to November this year is running 3.5 percent higher than the same period last year. This occurred in a year when the market’s only guess at what the mandated biofuel volumes would be was based on EPA’s May proposal, which suggested biofuel volume requirements lower than what the Agency included in its final rule.

Furthermore, the chart also shows that U.S. production of ethanol for the week ending November 20 rose to more than 1 million barrels per day. This is the highest weekly average since EIA started collecting weekly ethanol production data, back in June 2010.

Ethanol exports from the U.S. are up as well, with the 826 million gallons exported from these shores in 2014 being the industry’s best year since 2011. On top of that, EIA data shows that exports for January to September 2015 stood at 14.9 million barrels – almost 700,000 barrels higher than the same period last year, as the chart below shows.

In short, despite the fact that EPA failed to finalize a biofuel requirement until just last week, and the Agency’s proposal included numbers lower than what ended up in the final rule, ethanol production STILL grew significantly. A far cry from Mr. Bowling’s gloom and doom scenario. However, it is unlikely that the ethanol lobby will let facts get in the way of their tired narrative that Big Oil and EPA have somehow combined to stop their industry in its tracks. A cursory glance at the evidence would suggest this is untrue.

AFPM Communications

Posted by AFPM Communications

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