RFA says U.S. needs to expand market for ethanol blends, aggressively implement RFS, while investing in new renewable fuel technology; group argues market for emerging renewable fuels would not exist without success of ethanol industry

Rachel Carter

WASHINGTON , August 18, 2011 (press release) – The Renewable Fuels Association today responded to comments made by President Obama at an event in Atkinson, Illinois, about America’s existing ethanol industry and the need to develop additional renewable fuel technologies:

“Solving the energy challenges this country faces includes embracing a wide variety of renewable technologies, including proven technologies like existing ethanol production. In order to responsibly remodel and expand America’s renewable fuel house, we must first make sure the foundation is secure. That includes expanding the market for ethanol blends and aggressively implementing the Renewable Fuel Standard while simultaneously investing in new renewable fuel technology.

“Without question, there would not be a market for the emerging renewable fuels President Obama discussed were it not for the success of the existing ethanol industry. At ten percent of the nation’s gasoline market, current domestic ethanol supplies are reducing our demand for imported oil, mitigating the environmental destruction caused by an overreliance on fossil fuels, and most importantly, creating hundreds of thousands of jobs that cannot be outsourced.

“We agree with President Obama that we need to make room for new ethanol and renewable fuel technologies by walking away from our addiction and continued subsidizing of oil. We look forward to continuing the very constructive relationship this industry has had with the Obama Administration to grow this industry and foster the kind of innovation needed to meet our country’s energy needs.”

An issue raised at the President’s event revolved around existing ethanol production and grain supplies. Put simply, the existing ethanol industry has not "diverted" grain away from other uses. Rather, annual grain supplies have grown large enough to satisfy increased demand from all end users. The current ethanol industry's feedstock demands have had only trivial effects on consumer food prices, as documented in recent analyses conducted by Informa Economics and USDA.

Moreover, any negligible increase in consumer food prices that might be attributable to ethanol is more than offset by ethanol's ability to substantially reduce the average American family's yearly gasoline bill.

On Monday, RFA President and CEO Bob Dinneen posted an open letter to President Obama on the RFA blog, The E-Xchange. That letter can be read here.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.