ALTOONA, Iowa – On Tuesday the Iowa Renewable Fuels Association held its ninth annual Iowa Renewable Fuels Summit, with record turnout. One purpose of the summit is to look at the year ahead, and for 2015, Iowa RFA Policy Director Grant Menke says that means both measured optimism, and a dose of uncertainty.
“Is there going to be an RFS, isn’t there going to be an RFS? Is there going to be a federal blenders tax credit, or isn’t there going to be a federal blenders tax credit?” says Menke. “So all those issues are up in the air right now. And that’s just making it a very difficult business environment. Particularly in an industry that is competing against a behemoth in the petroleum industry.”
Menke says another issue is the price of crude oil; Saudi Arabia has increased its oil output in an attempt to regain some market share from the United States, where North Dakota has seen an oil boom in recent years. The net result has been crude oil prices now below $50 per barrel, which Menke says isn’t the best news for higher ethanol blends like E85.
At lower blends such as E10 and E15, Menke explains ethanol’s role as an octane enhancer, meaning that even with low oil prices, ethanol remains the cheapest source of octane.
However, Menke says there is one issue of the bunch that’s a clear front-runner for the industry’s attention in 2015: the Renewable Fuel Standard. The Environmental Protection Agency has yet to released a finalized rule for renewables production in calendar years 2014 or 2015.
“That’s everyone’s number one, number two, number three federal policy objective,” Menke says, “Getting the RFS back on track so it’s doing what it’s meant to do, which is open up market access to alternatives to petroleum; drive our country toward cleaner fuels; more competition; more choice at the pump. And we’re hopeful that the White House will realize that this is an important policy going for our country, and locking ourselves into 90 percent dependence on petroleum as our only transportation fuel source going forward is a bad choice for our country.”
To hear more about the outlook for the renewable fuels industry in 2015, click the audio player above this story.