WASHINGTON — After decades of opposing the expansion of ethanol in U.S. vehicles, big oil companies are joining forces with agricultural groups to push for greater use of corn-based biofuels.
The longtime rivals are finding more common ground as the rise of electric vehicles threatens to slash demand for gasoline. Big fossil-fuel companies are also investing more in renewable fuels in an effort to win U.S. government incentives aimed at reducing emissions and combating climate change.
“The world has changed,” said Bruce Rastetter, founder of Summit Agricultural Group, “and we're seeing a whole new shift in where oil companies are working with the biofuel industry to decarbonize the gas tank.”
Most gasoline sold nationwide contains 10 percent ethanol, known as E10, but blends with more than 15 percent ethanol, known as E15, are generally prohibited from being sold during the summer unless approved by the U.S. Environmental Protection Agency (EPA).
The powerful oil lobbying group, the American Petroleum Institute, has joined with the National Corn Growers Association and others in supporting a bipartisan bill proposed by Republican Sen. Deb Fischer of Nebraska that would allow year-round sales of E15 nationwide, while also preserving access to weaker blends.
The collaboration is the largest yet between the two parties and is changing the face of energy lobbying in Congress as they fight for liquid renewable fuels.
“We've been working together on this,” said Will Hupman, API's vice president for downstream policy. “Historically, this has never been easy.”
Combat history
American oil producers have been at odds with farmers since the days of the Model T, when American industrialist Henry Ford proclaimed that ethanol, the alcohol found in wine, beer and liqueurs, was the fuel of the future. But oil tycoon John D. Rockefeller and the Prohibition era paved a different path for the auto industry.
The U.S. government began encouraging the use of ethanol in the late 1970s after President Jimmy Carter tasked agricultural leaders with producing it as a way to reduce U.S. dependence on oil. Archer Daniels Midland began production in 1978.
After the 2001 terrorist attacks raised energy security concerns, Congress enacted legislation requiring ethanol and other biofuels to be blended into the nation's fuel supply annually.
That has sparked an ongoing debate, with oil producers arguing that blending would raise refining costs, put union jobs at risk and increase prices at the pump.
It's also sparked conflict over air pollution that comes with summer driving: The federal Clean Air Act bans the sale of E15 in most of the U.S. from June through mid-September, when summer heat increases evaporation and the potential for gasoline-induced smog.
But the rise of electric vehicles will likely curb both liquid fuels and bring oil and agriculture groups closer together.
The Biden administration has set a goal of making half of U.S. auto sales electric by the end of the decade. So far, electric vehicles haven't made a big dent in global fuel demand, but research firm BloombergNEF projects that their displacement of oil consumption could rise to more than 20 million barrels per day by 2040.
Ethanol supporters, including U.S. Secretary of Agriculture Tom Vilsack, point out that it will take decades or more for all U.S. passenger cars to be electric, and they promote biofuels as an important way to help reduce carbon dioxide emissions.
