RFA: 2009 will present challenges, opportunities

By Erin Voegele | January 12, 2009
Web exclusive posted Jan. 15, 2009, at 2:15 p.m. CST

The Renewable Fuels Association hosted a teleconference Jan. 13, titled "Ethanol: Prospects and Policy in 2009." The teleconference provided participants with a 2009 outlook on the ethanol industry, including information on prospects, next-generation technologies, higher ethanol blends, and the impact of stimulus and energy legislation. The call featured RFA Chairman Chris Standlee and Bob Dinneen, RFA's president and chief executive officer.

During the call, Standlee noted that 2008 was a difficult year for American businesses as a whole, and the ethanol industry in particular. "We had unprecedented economic collapses," he said. "We had the freezing of the credit markets, wild swings in commodity markets, and a great deal of manufactured hysteria over the food versus fuel debate, all of which created challenging conditions for America's farmers and ethanol producers."

However, 2008 is now behind us, he continued. "The American ethanol industry is completely focused on the future," he said. "We are dedicated not only to the success of current ethanol producers but also to the development and deployment of next-generation technologies that will expand the basket of feedstocks from which ethanol is produced." According to Standlee, further development of the ethanol industry will create hundreds of thousands of green jobs, provide reductions in greenhouse gas emissions and reduce our dependence on foreign oil.

Standlee named three primary issues facing the ethanol industry in 2009. These issues include: the need to get America's economy moving again, the need to modernize current fuel regulations, and the need for the U.S. EPA to complete rulemaking for the federal renewable fuels standard that was established in the Energy Independence & Security Act of 2007.

As part of the solution to improve our economic conditions, Standlee said Congress and President-elect Barack Obama's administration must craft legislation aimed at economic growth and the green economy. "A growing economy is certainly the medicine all industries need, and ethanol production is no exception to that rule," he said. "Ethanol is one of the original green jobs. In order to ensure that more than 325,000 jobs related to ethanol production continue to be secure, and that the potential of next-generation ethanol technologies is realized, access to capital and credit must be made easier."

As part of this economic stimulation, Standlee said the stimulus package should include provisions that make it easier for ethanol producers and those exploring next-generation technologies to obtain the credit and capital needed to construct new facilities and deploy new technologies. "Loan guarantees and other existing programs could facilitate an easing of the credit crunch, and would not require the creation of new programs," Standlee said.

"What we are suggesting is we have an industry here that is creating green jobs today," Dinneen said. "If that's your objective, then make sure those programs that are in place have the tools necessary to maximize those opportunities."

Regarding fuel regulations, Standlee said that requiring 50 percent of all new vehicles sold in the U.S. to be flex-fuel capable by 2012 would help address some of the issues posed by outdated fuel regulations. In addition, he said preliminary data suggests that all vehicles and most engines could accommodate fuel containing 12 to 13 percent ethanol. "Such a subtle increase in the amount of gasoline blended into ethanol in the short-term would help buy time and provide a market for the increasing volume of ethanol coming into the market over the next two to three years," Standlee said. In the long-term, the U.S. EPA must consider moving to higher ethanol blends to ensure that the RFS has a chance of being successful, he said.

In addition, Standlee said the issues related to lifecycle greenhouse gas emission and direct and indirect land use changes are critical to the future of renewable transportation fuel technologies. "This is an issue that EPA must get right if we are to develop and deploy the needed renewable energy technologies to wean us off our dependence on foreign oil and to mitigate the climate changing impacts that the irresponsible use of fossil fuels have generated," Standlee said. Dinneen estimates that the EPA will finalize its proposed rule making for the RFS2 later this year. "I think everybody recognizes that the sooner there is some clarity as to how this program is to move forward, the better," Dinneen said.

Although 2009 will clearly present more challenges to all industries, including the ethanol industry, Standlee said he doesn't think those challenges are insurmountable. "The opportunities available for an ever innovating and evolving industry like America's ethanol industry far exceed any such challenges," Standlee said. "2009 will no doubt be exciting and the RFA and its members are ready."

A recording of the conference call is available through www.goodfuels.org.