Ethanol producers in the region are voicing support for President Joe Biden’s announcement allowing higher amounts of ethanol in gasoline to bring prices down. The news that sales of a 15% ethanol blend will be allowed this summer is good for both the ethanol industry and farmers, producers said.
“It gives consumers more choice” said Brian Kletscher, CEO of Highwater Ethanol in Lamberton.
Kletscher said the ethanol and agriculture industries will continue to advocate for allowing E15 to be sold year-round.
“The ethanol industry and the farming community are excited to be part of the solution to lower prices at the pump while improving air quality by blending and using E15,” said Kletscher. “By continuing to use more blends like E15, we can work to keep the rural economy strong by using a product made in the United States.”
On Monday, President Biden announced that the Environmental Protection Agency (EPA) would issue an emergency waiver allowing the sale of E15 from June 1 through September 15. Most gasoline sold in the United States is a 10% blend of ethanol.
“It’s really a win for the consumer, in my opinion,” said Jeff Oestmann, CEO of Granite Falls Energy. Gas demand is still high and the summer months have always been a time when people travel more, he said.
Although the E15 waiver is temporary, Oestmann said it will give consumers access to a cheaper fuel option this summer.
Earlier this week, the Biden administration said E15 could save drivers about 10 cents a gallon based on current gas prices. Many of the 2,300 gas stations that sell E15 gas are in the Midwest.
According to the Minnesota Bio-Fuels Association’s 2021 Annual Report, E15 was available at more than 400 Minnesota fueling stations as of last year. In total, more than 86 million gallons of E15 were sold statewide in 2021.
Wayne Schoper, a farm business management instructor at South Central College in North Mankato, said the waiver of the ethanol rule would be positive for U.S. corn farmers.
“Anything we can do to stimulate the agricultural economy is good for all of us. This puts more pressure on global grain stocks, which are quite good around the world,” Schoper said. “It also boosts prices. We are approaching record prices for corn and beans. These are jokers. Usually the prices start to drop in June, but I don’t know this year. There is a lot of uncertainty. »
Schoper said there was a sharp rise in prices in 2012 and prices did not return to previous levels.
While the ethanol produced in southwestern Minnesota is made from corn, Kletscher said the industry does not affect food prices or take food that would otherwise go to consumers. Dried distillers grains, a by-product of ethanol production, are used to feed animals that are consumed by humans.
“We are still part of the food chain” said Kletscher. He said 100% of the dried distiller’s grain produced at Highwater is used for animal feed. Corn oil produced at Highwater is used for both animal feed and biodiesel production.
Kletscher said increased E15 sales would not mean a sudden increase in production at Highwater.
“In terms of production, we will operate at the same pace as in the past,” and using the same amount of corn, he says. The important thing was to be able to market the ethanol produced, he said.
With E15 sales allowed longer this year, “We think there will be a new demand” Westmann said. Ethanol producers could use existing ethanol supplies to help meet demand, he said.
Oestmann said ethanol producers are also watching for potential export opportunities.
“We are not the only ones with high gas prices”, he said.
Oestmann said ethanol producers hope E15 can eventually be sold year-round. EPA rules banning E15 sales during peak travel months stem from concerns that the 15% ethanol blend adds to smog at high temperatures. However, ethanol producers said they were working to show that was not the case.
“A lot of work is going on with the EPA,” Westmann said.
Kletscher said more recent studies challenge earlier conclusions about E15 and air pollution.