Ethanol Op-Ed CBJ 7-21-10

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Ethanol Op-Ed for Corridor Business Journal

July 210, 2010

The opening of the 300 million gallon dry mill plant at ADMs Cedar Rapids facility is another success for

Iowas ethanol industry. The new dry mill will process an additional 100,000,000 bushels of corn each

year, or approximately 300,000 bushels of locally grown corn every day. Iowa is the overwhelming

leader in renewable energy production. Our state annually produces twice as much liquid fuel as we

consume- 3.3 billion gallons of ethanol vs. 1.54 billion gallons of gasoline. Ethanol production

technologies are improving, optimizing use of heat and water, while expanding to other feedstocks

besides corn kernels. Corn based ethanol is a platform for other biobased products, such as plastics,

chemicals, and advanced biofuels. Biofuels are a key component of our energy portfolio and a necessary

outlet for over a billion bushels of corn produced every year by Iowa farmers. The main challenge facing

the ethanol industry today is overcoming the blend wall facing corn ethanol producers. The Iowa

Biotechnology Association and its members are working diligently on this issue.

In 2009, the US produced 10.8 billion gallons of ethanol, which supported nearly 400,000 jobs, added

$53.3 billion to GDP, and displaced the need for 364 million barrels of oil. The process for making

ethanol has improved dramatically in the last 10 years. The energy balance for ethanol, which measures

the amount of energy released vs. energy inputs, has increased to 2.3 to 1, according to a recent USDA

study. For comparison, gasolines energy balance is 0.88 to 1. Water usage is another key statistic.

Corn based ethanol requires 2.6 gallons of water for every gallon of fuel produced, as compared to 8

gallons of water for every gallon of gasoline produced. Iowa ethanol plants treat and clean up water

before it is discharged and are excellent stewards of the environment. Actively working to optimize the

use of corn, water and natural gas benefits the environment as well as operating profits for ethanol

production facilities.

Ethanol is a necessary component of gasoline. It is an oxygenate, meaning that it adds oxygen to the

fuel mixture. More oxygen helps the fuel burn more completely, thereby reducing the amount of

harmful emissions from the tailpipe. Ethanol has been so successful as a component of our nations fuel

infrastructure that we are approaching the blend wall. The EPA arbitrarily decided that 10% of fuel

could be comprised of ethanol, which is why nearly all gas stations in Iowa sell E10. Ethanol now makes

ups to 9.2% of the gasoline that we use every year, and is expected to reach the 10% figure in early

2011. This artificially limits growth in the industry and needs to be increased.

Several studies have shown that E12 and E15 blends, made up of 12% and 15% ethanol, respectively,

work well in automobiles. In Brazil, all fuel is at least 20% ethanol, and there have been few if anyproblems with their aging auto fleet due to fuel content. The EPA has been collecting data on an

expansion of the blending limits, but has twice delayed their decision. Current reports indicate that the

EPA will propose allowing E15 for 2007 and newer cars and E12 for 2001-2007 models. We believe this

will be a confusing and expensive scenario that cwould actually cause decreased usage of biofuels.

Consumers cwould be confused as to which fuels work best in their car and opt to avoid biofuels

altogether. Gand gas station owners would have to install numerous new pumps to satisfy different

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demand levels. We believe the EPA should move forward with universal approval of E12 and then move

to E15. demand. This is an untenable option that is worse than just remaining at E10.

Ethanol is a vital component of our agricultural and energy industries. Biofuels create local, permanent

green jobs that benefit the environment while keeping energy dollars close to home. The growth of the

ethanol industry is being artificially limited by the EPAs E10 restriction. A universal expansion to E12 oreven E15 would be beneficial for drivers, farmers, and ethanol producers and reduce our dependence

on foreign oil. The EPA should act without delay on this issue.

Michael Ott is the Associate Director of the Iowa Biotechnology Association