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Corn producers groups push for renewable fuels standard
By DOUG SCHMITZ
Iowa Correspondent

ROCKWELL CITY, Iowa — As the state’s 2006 legislative session commences on Jan. 9, the Iowa Corn Growers Assoc. (ICGA) will also start working with state lawmakers to pass an Iowa Renewable Fuels Standard, which would mandate 25 percent total renewable fuel usage by the year 2015.

“A 25 percent renewable fuels requirement could result in as much as 240 million gallons per year of increased ethanol usage,” said Keith Sexton, ICGA president and Rockwell City, Iowa corn grower. “This proposal allows fuel retailers the flexibility to reach the goal of more renewable fuels sold without mandating how the goal is reached.”

Iowa is the nation’s top ethanol producer, accounting for one-fourth of the United States’ total production. If passed, the new Iowa law would encourage more Iowans to fill their tanks with ethanol, expanding its use statewide as a result, the ICGA said.

To date, the majority of Iowa’s gasoline blends sold across the state contain 10 percent ethanol and 90 percent petroleum-based gasoline, or E10, which makes up more than 70 percent of the motor fuel used in Iowa.

Based on a total gasoline usage basis, the ICGA said its call for a 25 percent total renewable fuel usage in less than nine years could be achieved by using both E85 and E10.

In Polk County alone, there are 13,000 cars that use E85 and about 100,000 total vehicles in Iowa use the renewable fuel at the state’s 24 designated E85 gas stations.

The ICGA said its proposed schedule for increasing renewable fuels consumption would eventually establish a minimum of 10 percent total usage by 2008, 15 percent total usage by 2010, 20 percent total usage by 2012 and 25 percent total usage by 2015. But if state fuel retailers don’t reach 25 percent total usage by 2015, Iowa law would institute an automatic 10 percent per gallon ethanol requirement for the state of Iowa, according to Mindy Larsen Poldberg, ICGA director of government relations. “The 25 percent Renewable Fuels Standard is the No. 1 priority of ICGA,” she said. “It is both aggressive and achievable.”

Last June, the ICGA board of directors offered the proposal after a survey of more than 2,000 ICGA members said they wanted stronger ethanol legislation, Poldberg added.

“Our corn grower members have been very clear,” she said. “They want a meaningful bill that will significantly expand Iowa’s ethanol use.”

After the ICGA formalized its objectives, the initiative was discussed in roundtable policy discussions held with members throughout the state at the ICGA Annual Policy Conference last month. “There is no doubt that we are fully immersed in this initiative,” Sexton said. “ICGA believes this proposal will be the best way to advance E85 and ethanol in Iowa.”

The ICGA’s member investment in Iowa’s nearly 30 value-added ethanol plants has been strong over the past years, which would provide for an increased local market for homegrown and home-financed Iowa fuels, Sexton added.

By the end of 2006, the Iowa Renewable Fuels Assoc. (IRFA) said the state’s 27 ethanol plants would be capable of producing over 1.6 billion gallons per year, with at least six biodiesel plants capable of producing more than 120 million gallons per year.

“Iowa is the leader in producing renewable fuels, but we’ve lagged behind in use,” said Bernie Punt, IRFA president and general manager of Siouxland Energy and Livestock Cooperative in rural Sioux Center.

“Now is the time for Iowa to become the leading consumer of renewable fuels,” he said. “This proposal could quadruple the use of renewable fuels over the next decade. The Iowa RFS can serve as model legislation for other states to follow.”

While the IRFS won’t be mandating any per gallon renewable fuel use, Sam Cogdill, president of Amaizing Energy and IRFA president-elect, said Iowa gasoline retailers would be required to achieve a minimum percentage of renewable fuels use compared to total retail gasoline sales over the course of a year.

“Iowans grow corn and soybeans, and process those grains into ethanol and biodiesel,” Cogdill said. “The IRFS will allow local residents to complete the hometown energy cycle by purchasing renewable fuels. And a good chunk of the money spent on fuel would stay in Iowa – creating jobs and boosting our economy.” According to Iowa Department of Revenue estimates released last month, state motorists used ethanol blends 78 percent of the time in November, totaling 133,908,661 gallons, and tying the all-time high for E10 sales set last June.

“Iowans overwhelmingly choose ethanol blends when they are available,” said Monte Shaw, IRFA executive director. “That is why the ethanol industry is urging the state legislature to enact an Iowa Renewable Fuels Standard.

“Passing the standard will help put the choice of E10, E85 and biodiesel blends before more Iowans,” he said.

A recent Iowa Farm Bureau Federation (IFBF) analysis found that a renewable fuels standard in the state would create up to 1 billion more gallons of ethanol use by 2020, compared to mandated ethanol usage.

Published in the January 11, 2006 issue of Farm World.

1/11/2006