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Michigan Commodity Report - Feb. 6, 2013
Executive Director,
Michigan Corn Growers Assoc.

If you, as a Michigan driver, became aware of some magic beans that would help you save nearly $1,000 a year on gasoline, wouldn’t you want to learn more about them?

If you, as a supporter of cleaner emissions and untainted ground water, knew these magic beans were a renewable, eco-friendly resource, wouldn’t you embrace their use?

If you, as a business owner, knew these magic beans help support 400,000 jobs across the country – and that using more beans would create another 125,000 jobs – wouldn’t you support it?
This is no fairytale. The above facts, backed by research, science and common sense, show these magic beans have been available for decades. They come in the form of a grain – corn – the main ingredient for producing the renewable fuel ethanol.

Many drivers don’t know when they fill up their cars they are not getting straight gasoline but rather, an ethanol blend, typically E10 (10 percent ethanol). And it’s helping them save money. Each year, the United States spends more than $300 billion for foreign oil, the equivalent of more than $1,000 for every citizen.

Michigan’s corn farmers know ethanol has proven to be a great economic tourniquet to lessen the costly flow of oil that has placed a financial burden on U.S. drivers. Because ethanol is available at a lower cost than gasoline, retailers can charge less.

And, because ethanol now represents 10 percent of our nation’s fuel supply, U.S. oil imports have fallen below 50 percent for the first time since 1997, displacing the need for 485 million barrels of oil (a value of $49.7 billion in 2011).

A 2011 study by economists at Iowa State University and the University of Wisconsin found ethanol reduced U.S. wholesale gasoline prices by an average of 25 cents per gallon from 2000 to 2010. In 2011, the authors found ethanol reduced gas prices by $1.09 cents per gallon, which equates to a $1,200 annual savings for a typical U.S. household.

And, more fuel choices are ahead after the U.S. Environmental Protection Agency (EPA) approved the use of E15 for cars 2001 and newer, making it available for use in more than 75 percent of cars on the road today. In a study performed by the U.S. Department of Energy (DOE) and the EPA, 86 vehicles representing all makes and models were driven over six million miles on E15 – with ZERO issues.

Drivers now have another lower-cost oxygenate available that helps their engines run cleaner and with more power. In fact, NASCAR is entering its third year of using strictly E15 in all three of its racing series, and have driven more than three million miles with no problems.

Ethanol opponents have been spreading misinformation about how E15 destroys engines and voids warranties without providing relevant, unbiased data to support their claims. Critics point to a study that involved limited engine durability tests done by the Coordinating Research Council (CRC).

The council, which is supported by the American Petroleum Institute, studies the interaction of engines and petroleum products. In the study, the group found leaks from uneven valve seal wear and pittage in two of eight 2001-09 model year engines run for 500 hours on E15.

According to Patrick Davis of the DOE’s Vehicle Technologies Program, what the flawed study does not point out is “the CRC decided to select several engines already known to have durability issues, including one that was subject to a recall involving valve problems when running on E0 gasoline and E10.

“It is no surprise that an engine having problems with traditional fuels might also ‘fail’ with E15 or E20 ethanol-blended fuels – especially using a failure criterion chosen to demonstrate sensitivity to ethanol and operated on a cycle designed to stress the valves.”
In the study performed by the DOE and the EPA, 86 vehicles representing all makes and models were driven more than six million miles on E15 with no issues. We will leave it to you to decide which study is more relevant and meaningful: one that has results from six million miles of testing on 86 vehicles, or one done for 25,000 miles (500 hours of driving) on just eight vehicles.

Also, common sense dictates if NASCAR, featuring the best mechanics and drivers in the world and millions of dollars in equipment, is utilizing E15 under the toughest possible engine conditions, then it is certainly safe for your car. The bottom line is that E15 is the most tested blend in history. However, if you are concerned about warranty issues, simply check with your dealer.
Opponents also argue using corn to fuel our vehicles takes away from the nation’s food supply and pushes food prices up. This, of course, is another myth, since the corn we are talking about is field corn, which is used to feed animals and provides less than 3 percent of food ingredients for people – and not sweet corn.
According to the USDA, if the farm price of (field) corn increases 50 percent, then retail food prices, as measured by the Consumer Price Index (CPI), increase by 0.5-1 percent. The USDA also forecasts the price of food will increase by 3.5 percent in 2013, just slightly above historical inflation averages of approximately 3 percent per year.

And that doesn’t even count other contributing non-corn costs that also increase food prices (like marketing, packaging, etc.). So when discussions about expanding the use of ethanol come up, the question should not be “Why should I use it?” The question should be “Why not?”