Written by Kim Chipman and Jennifer A. Drewey
After decades of fighting against more ethanol in U.S. cars, Big Oil is joining Big Agricultural in pushing for expanded use of corn-based biofuels.
Longtime adversaries are increasingly finding common ground as the growth of electric vehicles threatens gasoline cuts request. Fossil fuel giants are also increasing investment in renewable fuels to win government incentives aimed at cutting emissions and curbing climate change.
“It's a different world today,” said founder Bruce Rastetter. summit agriculture group. “This is a game-changer where oil companies are working with the biofuels industry to decarbonize gas tanks.”
Most gasoline sold nationwide contains 10% ethanol, known as E10. However, selling blends higher than 15% or E15 during the summer is generally prohibited unless there is an exemption from the Environmental Protection Agency.
The powerful oil lobby, the American Petroleum Institute, has joined with the National Corn Growers Association and other groups to support a bipartisan oil industry. measurement A proposal from Nebraska Republican Sen. Deb Fischer would allow E15 to be sold year-round across the country. The legislation would also maintain access to lower grade blends.
The collaboration is the largest ever between the two countries and is changing the face of energy lobbying on Capitol Hill as they fight for liquid renewable fuels.
“We've been working shoulder to shoulder on this,” said Will Hupman, API's vice president of downstream policy. “Historically, it's never been easy.”
Combat history
U.S. oil producers have been at odds with farmers since the days of the Model T, when Henry Ford declared ethanol (the alcohol found in wine, beer and liquor) the fuel of the future. But oil magnate John D. Rockefeller and the Prohibition era set a different direction for the auto industry.
The U.S. government began encouraging the use of ethanol in the late 1970s after the oil crisis. At this time, President Jimmy Carter ordered agribusiness leaders to produce ethanol as a way to reduce dependence on oil. Archer Daniels Midland Company began producing his in 1978. After the 2001 terrorist attacks heightened concerns about energy security, Congress enacted a mandate mandating the blending of ethanol and other biofuels into the nation's fuel supply each year.
This has sparked ongoing debate, with oil producers arguing that blending would increase refining costs, put union jobs at risk and increase gasoline prices.
It's also fueling conflicts over the pollution caused by summer driving. The federal Clean Air Act bans the sale of E15 in most areas of the United States from June through mid-September, when summer heat accelerates evaporation and increases the likelihood of smog from all gasoline. .
However, the rise of electric vehicles will curtail both liquid fuels and bring oil and agricultural groups closer together.
The Biden administration has set a goal of making half of U.S. car sales electric by the end of 2010. So far, electric vehicles have not had a significant impact on global fuel demand, but BloombergNEF estimates that oil consumption from EVs will increase to more than 20 million barrels per day by 2040.
Ethanol proponents like Agriculture Secretary Tom Vilsack have pointed out that it will take decades for U.S. passenger vehicles to become fully electric and have promoted biofuels as a key weapon to help reduce carbon emissions. .
Corn growers say the administration's approach to climate change, which prioritizes electric vehicles over biofuels, is “short-sighted,” according to a statement released Wednesday.
“If we are to tackle climate change and meet our climate goals, we need to take a multifaceted approach, including the use of higher levels of biofuels,” according to a letter sent to President Joe Biden on Wednesday. There will be,” he said.
API and other oil groups see the Fisher bill as providing long-term certainty to the market while avoiding potential supply disruptions and disruptions caused by alternative approaches.
That alternative, proposed by Midwest governors, would force the EPA to apply air pollution requirements equally to E10 and E15, allowing full sales of premium blends but leaving those states with virtually no boutique This will force low evaporation fuel. The Biden administration is on track to approve the changes within months, despite concerns that they would create a patchwork of uneven rules and require the construction of expensive new infrastructure.
Along with API and corn producers, support for the Fisher bill spans the entire political spectrum. The coalition includes: Renewable Fuels Association and growth energyas well as various agricultural organizations and groups representing fuel distributors and truck stops.
“This is the first time in 20 years that all these stakeholders have come together and actively lobbied in support of their common interests,” RFA Director Jeff Cooper said in a statement. .
Still, the effort faces major hurdles, including resistance from independent refiners who are exposed to biofuel compliance costs.of Promote America's Jobs Coalition Unionized workers and groups representing independent oil refiners want to combine year-round E15 access with a cap on the cost of credits used to meet annual biofuel quotas. The current bill would only enrich large integrated oil companies at the expense of commercial refiners, the newspaper said.
The bill has the support of some oil state lawmakers, including Republican Sen. Roger Wicker of Mississippi. finding In 2013, ethanol mixtures will be limited to 10%.
Brooke Appleton, vice president of public policy for the National Corn Growers Association, said she hopes the oil and agriculture groups can work together on other issues if their efforts are successful. “We probably have more in common than I thought.”
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