Home Ken's Commentaries Ken's Commentary: Obama Administration May Have Provided A Favor To Ethanol

Ken's Commentary: Obama Administration May Have Provided A Favor To Ethanol

I am amazed the ethanol uptrend lasted this long without antagonistic government action. I am amazed at how much ethanol we are currently producing. Now we will see if ethanol producers really start marketing and not just delivering a commodity to a guaranteed buyer.

When you are moving forward, there are two kinds of obstacles. If you can jump it, then it’s a hurdle, but it you hit it, then it’s a wall.

In this case the wall is 10% of the total fuel supply. It’s up to the industry to find a way to jump to higher blends. The RFS has done its job. Ethanol production has increased to a level that far surpassed early estimates, but it seems that everyone in the supply chain, from grower to distiller, has lost the perspective of being subsidized and now feels entitled to continue to produce with an expanded mandate.

This reduction in the RFS for 2014 may be the best scenario possible for long term ethanol production. It may kill the momentum to eliminate the renewable fuel standard by Congress. It tells producers they need to control their costs, balance their supplies and begin marketing. I believe this slight downtrend will cause positive changes within the business structure of ethanol production.

Why can’t “E makers” take the high road and market ethanol blended with gasoline rather than gasoline blended with ethanol? Every place you buy “E blends” today favors the oil industry. Why can’t the image of a bio-based fuel be enhanced to the point that it causes car manufacturers to build engines that take advantage of high octane/high performance ethanol? If an Indy Car will do 240 miles per hour burning E-85, can’t we sell that as a positive, rather than raise the threat of fouling your engine with this awful solvent?

I would like to see “Green Fuel” sold by stations owned by biofuel manufacturers. Blender pumps, E-15 and biodiesel would be their products. Buy and blend gasoline as a component, but sell ethanol as the premium product.