Ethanol Readies for Battle Once Again

Posted February 27, 2009 at 6:16pm

Battered by the sinking economy and accusations that it has provoked higher food costs, as well as questions about its environmental record, the corn-based ethanol industry is fighting back with a fresh voice.

Officials from the struggling industry huddled in San Antonio last week for their annual national conference, but they appeared anything but discouraged, announcing the formation of a new global alliance and the expansion of Growth Energy, a recently formed domestic ethanol advocate.

“It’s about energy security and the environment and jobs,” said retired Gen. Wesley Clark, a Growth Energy co-chairman.

“The truth about ethanol is that it could be doing a lot more for the economy than it is, but it’s hit the ceiling based on an arbitrary regulation that you can’t put more ethanol in gasoline,” he said.

Clark’s Growth Energy, which formed in November, is expanding its Washington, D.C., footprint to help make the case to Congress and the Obama administration that they should lift a cap that limits the amount of corn-based fuel that can be blended with gasoline.

Ethanol blends are now limited to 10 percent of the total fuel, but ethanol producers say they can produce an efficient fuel with as much as 85 percent ethanol, or the so-called E-85.

For now, however, ethanol advocates are working to increase the10 percent blend level to E-12 or E-15.

Congress has been supportive of ethanol production in the past.

Last year, Congress approved the renewable fuels standard, which requires that 15 billion gallons of corn-based ethanol be produced by 2015.

Ethanol companies now need a waiver from the Environmental Protection Agency in order to produce higher blends.

To help push its cause inside the Beltway, the group announced last week that it was hiring Tom Buis, head of the National Farmers Union and longtime ethanol advocate, as its chief executive officer.

Buis, who will join the group in March, is expected to fill out Growth Energy’s government relations team.

Former Iowa Rep. Jim Nussle, who headed the Office of Management and Budget under former President George W. Bush, is also coming on as a senior adviser.

Clark says the group’s main goal now is to re-emphasize the value of ethanol.

“We’re going back to basics,” Clark said.

Growth Energy is looking to increase the association’s numbers by adding nontraditional stakeholders, like enzyme producers and contractors and ethanol plants builders.

The group counts the largest U.S. ethanol producer, POET, as a member, along with ICM Inc., Western Plains Energy, Syngenta, Hawkeye Gold and Novozymes, among other members.

“It gives us an opportunity to give a fresh voice to the debate,” said Rob Skjonsberg, vice president of government affairs for the South Dakota-based POET.

POET has also launched its own counteroffensive in Washington. As the largest domestic producer of ethanol, the company has been doing outreach in Congress with environmental organizations and other industry partners.

While Growth Energy is largely concentrated on domestic production, countries representing more than 60 percent of biofuels production internationally have also come together to form the Global Renewable Fuels Alliance.

The group, which launched last week, counts industry associations from Canada and 27 European Union countries — along with the Renewable Fuels Association, the Washington-based ethanol industry trade group — as members.

“Our focus really is at the international arena,” said Bliss Baker, who is heading up the alliance.

Baker said he wants to be the voice for the industry, responding to critics from the World Bank and the United Nations.

While the Renewable Fuels Association has been the industry’s main trade group in Washington since 1981, the RFA isn’t worried about the appearance of other advocacy associations.

“There’s no shortage of issues and work to be done to educate folks about renewable fuels,” RFA spokesman Matt Hartwig said.

“We see it as an opportunity to work with these groups, the same way we view other groups,” he added.

In the last 18 months, the RFA has grown to 15 employees and moved beyond the Beltway to include staff in St. Louis, Illinois and Omaha, Neb., according to Hartwig.