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Positive Talk From Ethanol

Association leader says industry will weather current financial storm

The Renewable Fuels Association -- the nation's largest ethanol trade association -- is talking positive about the industry following VeraSun's bankruptcy announcement.

VeraSun is the nation's largest producer and marketer of ethanol and distillers grains, with 16 plants in eight states. The company is headquartered in Brookings, S.D.

"Unfortunately, unprecedented volatility and uncertainty in the credit, commodity and energy markets have created economic challenges that are forcing difficult decisions to be made by companies in virtually every industry across America. The ethanol industry is no exception," said Bob Dineen, RFA president, in a statement.

"A return to normalcy in the marketplace will take time. One way the government can accelerate the bounce back of the ethanol industry without costing taxpayers a dime is to increase the percentage of ethanol blended into each gallon of gasoline. Working with automakers and the ethanol industry, the federal government could increase the base level of ethanol blending from 10% to a higher level (e.g. 15%) that is deemed safe and appropriate for today's vehicles. The resulting increase in demand would strengthen depressed ethanol prices, provide a light at the end of the tunnel for an important domestic renewable energy industry, further reduce imports of oil, reclaim a portion of the $700 billion we currently send overseas for oil each year, and create desperately needed economic opportunity and recovery here at home.

"America's ethanol industry, like other major industries, will weather the current financial storm, resume its growth and re-emerge as the critical component of a more stable energy, economic and environmental future it has always been."

Three reasons for optimism

The future of the ethanol industry is bright for three fundamental reasons, adds Matt Hartwig, RFA communications director.

1. The challenges of energy security, economic growth and climate change are not going away. Renewable fuels like ethanol are a critical component in our national strategy to address these challenges. If we don't stay committed to renewable energy like ethanol, where will we find ourselves when the global economy resurges, oil consumption goes back on the rise, and we find ourselves in the same position we were just a few months ago?

2. "Technology innovations are making ethanol production more efficient and more cost-effective. They are also leading to the development of new feedstocks for ethanol production that will open up opportunities for rural communities that are not in the traditional Corn Belt."

3. "Expanded markets for ethanol can easily be found. Whether it is increasing the base level blend beyond 10% or continuing the growth of higher level blends such as E85, the market for ethanol will grow. And, export markets are likely to open up as the global biofuels industry matures."

"All of this, together with consistent public policy, signals a strong future for this industry," he says.

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