In a speech at the Department of Energy in June, President Donald Trump outlined an ambitious plan that not only called for American energy independence, but also energy dominance.
“Energy exports will create countless jobs for our people, and provide energy security to our friends, partners, and allies all across the globe,” said the president.
He was absolutely correct. And much like oil and liquefied natural gas, homegrown U.S. ethanol can and must continue to play a substantial role in this growing dominance.
The ethanol industry has seen a seismic level of growth over the past decade thanks to policies like the Renewable Fuel Standard (RFS). According to the U.S. Energy Information Administration, fuel ethanol production has grown from 6.5 billion gallons in 2007, to over 15 billion gallons in 2016. Ethanol consumption has dramatically risen as well, with domestic ethanol blending now exceeding 10 percent nationwide. Iowa farmers and ethanol producers have made tremendous strides, but we cannot stop here. The industry must continue to grow beyond our borders if it wants to survive and thrive.
Fostering the growing ethanol export market is a challenge we have to tackle if farmers and ethanol producers, like the oil and natural gas industry, intend to participate in the energy dominance agenda. This is also an issue of continued growth and survival of our industry. Indeed, while corn ethanol production and consumption have risen to all-time highs, the production side is outpacing domestic consumption and our industry leaders recognize that the key to our future survival lies in a growing global market for our products. After all, whether U.S. ethanol is consumed here in the U.S. or oversees, our farmers and our industry profit. The good news is that our industry has taken great steps to open foreign markets and opportunities. Since 2010, U.S. ethanol exports have risen from 400 million gallons to over 1 billion gallons in 2016. All this has happened while U.S. ethanol imports have dropped dramatically, as domestic production has increased. We are becoming more energy independent while simultaneously growing our markets to become more energy dominant.
We are seeing real success, but there are real challenges ahead. Just recently, Brazil announced it was levying a 20 percent tariff on imported ethanol, in response to the growing competitiveness of U.S. corn ethanol with sugar cane ethanol. The response from the national ethanol industry was swift. In a joint statement, leaders from the Renewable Fuels Association, Growth Energy, and the U.S. Grains Council condemned the decision.
“The United States should not take this lying down,” Growth Energy CEO Emily Skor said in a subsequent statement.
The Trump Administration must not only fight anti‐U.S. ethanol tariffs like in Brazil, but also promote policies here in the U.S. that encourage a steady rise in ethanol exports.
In an interview last month with Radio Iowa, EPA Administrator Scott Pruitt indicated that he was exploring ways to boost exports of U.S. ethanol. This was a welcome statement from the former Oklahoma Attorney General. Now Administrator Pruitt, Agriculture Secretary Sonny Perdue, and the White House must look to the range of regulatory and legislative options available to make growing ethanol exports a key priority in all areas of the administration if the president’s energy dominance agenda is truly to be achieved.
Ed Wiederstein operates his family farm near Audubon, IA and is a former president of the Iowa Farm Bureau.