Add to Ethanol’s To-Do List  

For many of us, to stay on top of things we need to write them down as reminders in what I call a “To-Do” list. The ethanol industry has, or should have a “To-Do” list and it would undoubtedly include all the issues that dominate ethanol news:

• Get year-round E15
• Defend the RFS
• Ensure Robust RVOs
• Oppose Small Refinery Waivers
• Try to figure out how to survive in tariff world
• Re-instate dual fuel/FFV vehicle credits and prorate them

Wait, what is that last one? Well, I threw that in, it doesn’t seem to be on anyone’s list, but it sure should be. It looks like we are close on E15, which is good news, but if we ever want to get beyond E15 it would increase our chances dramatically if automakers got credits for using ethanol. Ethanol fuels have too much to offer to simply settle for a world of just two blends – E10/15  or E85.

A recent article in the Farm Journal’s AgWeb featuring an extensive interview with Missouri Corn Growers CEO Bradley Schad got me thinking about this issue. As Schad notes, Flex Fuel Vehicles are an important piece of the puzzle when it comes to increasing ethanol demand and corn grind, particularly for E85 if low carbon fuel standards survive the current administration’s dismissal of climate change. But equally important is the ability to capture value from mid-level blends like an E20-E30 for non-flex cars requiring high octane.

In the article, Schad points out that Ford Motor Company has not only abandoned the production of the F-150 truck in a flex configuration but all FFvs. As Schad points out, it is the farm and ag sector that have made the F-150 not only the top selling truck in America but the top-selling vehicle of any kind. Ford historically has been the leader in FFV development with company Chairman Bill Ford taking an active role including ads with him in a cornfield with a flex vehicle. Given that farmers with a direct stake in the future of ethanol would love to buy a flex fuel 150, Schad is asking the right question – what happened?

This latest development from Ford leaves a whopping total of just eight vehicles available to the public that offer the option of operating on gasoline, ethanol or any combination. To understand this, a little history is in order.

For many who may have forgotten, the establishment of mileage credits resulted in automakers putting more than 20 million FFVs on the road today. Keep in mind this program was of no cost to the federal government or the consumer. It was designed to reduce oil consumption and as ethanol use increased, it did just that. We were off and running until several ill-informed and narrow-minded environmental groups waged a campaign to eliminate the credits, claiming these FFVs were not always using ethanol. The Alliance of Automobile Manufacturers offered several ways to actually measure the amount of ethanol going in the vehicles and adjust the credits accordingly. Rather than working with us and the auto industry to address this concern, these enviros went scorched earth and succeeded in eliminating them altogether.

This left automakers in a tough position. Many ethanol supporters argued it only cost a few hundred dollars per vehicle to make them flex capable and they should continue production. From the auto perspective, even a few hundred dollars when you sell millions of cars annually was a cost with no return.

The answer lies in providing mileage and emission credits and recognizing this is not a one size fits all solution. FFVs using E85 make sense in some areas, at some times, but higher ethanol blends in all cars will make sense in all areas, all of the time. So, we need both. First, we have to get the credits reinstated and implement ways to measure the ethanol used. With the Trump administration vowing to revise fuel economy standards, we have a pathway. Oxygen sensors, computer chips and other devices can be used to give an accurate accounting. If an FFV uses 85 percent ethanol and a conventional auto uses 15, 20 or 30 percent, are they both not meeting the objective of the policy which is to reduce oil consumption?

The red herring chicken or egg argument that we first need E85 pumps doesn’t apply here, and that’s the beauty of FFVs. Unlike EVs that only operate on one fuel source, put FFVs on the road and they can run on lower ethanol blends as higher blend infrastructure continues to develop. As it is, we have nearly 5,000 E85 blender pumps in use today and the consistent, undeniable price advantage of ethanol will spur plenty more, and these pumps provide access to high octane premium ethanol blends that more and more newer cars require.

All of us in agriculture know we are facing a potential crisis with shrinking markets, the uncertainty of trade wars and tariffs, and ever-increasing costs of production paint a bleak picture. But we also  know the positive impact of ethanol and by increasing our use of corn and other abundant, renewable feedstocks, we can turn things around with E15, E30 and E85. The Trump administration has made it clear we will continue to rely on internal combustion engines and liquid fuels. Well, that is a call to arms for agriculture, and as our friends in Missouri note, we need Ford and other OEMs to support us. Put it on the list.