COUNCIL BLUFFS, Iowa — With the Southwest Iowa Renewable Energy plant serving as a backdrop, President Donald Trump heaped praise on American farmers and touted his administration’s move to expand the sale of gasoline blended with 15% ethanol.
“I’ve worked very hard for ethanol,” the president told an audience of political supporters, corn farmers and ethanol industry officials packed inside a massive tent on the grounds of the plant in Council Bluffs.
Last October, Trump announced his intentions to lift restrictions on the sale of E15 during the summer months, a rule implemented by the Obama administration in 2011 to aid in reducing smog caused by vehicle emissions, saying he’d come through before the summer driving season.
As the deadline approached last month, the Environmental Protection Agency finalized the rule Trump said would provide American drivers with cheap, clean fuel, further strengthening the country’s energy independence, while adding new jobs to “the hottest economy on earth” and supporting agriculture.
“As a candidate for president, I pledged to support our ethanol industry and to fight for the American farmer like no president has ever fought before,” Trump said. “We’re winning these fights, and you’re all patriots.”
Ethanol was a $2.8 billion business in Nebraska in 2017, according to a University of Nebraska-Lincoln economic impact study. Some 25 ethanol production facilities employ more than 1,400 people, producing more than 2 billion gallons of the grain-based fuel.
Roger Berry, administrator of the Nebraska Ethanol Board, said the previous EPA rule restricting sales of 15% ethanol-blended gasoline during the summer months was “the main barrier to what’s holding E15 back.”
“Retailers had to go out every year during the summertime, change the labeling to sell flex fuel, or stop selling,” Berry said, which prevented gas stations from developing a reliable base of customers for E15.
Offering the product year-round will be attractive to motorists — E15 typically costs 3 to 5 cents less than E10 or super unleaded fuels and contains more octane, what Berry called “a better fuel at a lower cost” — and will drive further demand for ethanol.
In some cases, that increased demand will be immediate. Grand Island-based Bosselman Enterprises, for example, has 13 locations that sell E15 through blended dispensers capable of mixing unleaded gasoline and ethanol at the pump. Another two are set to come online soon, a Bosselman spokeswoman said, adding to the 58 stations offering E15 statewide.
Drivers who make the switch to E15 keep coming back, said Zach Griess, Bosselman’s director of petroleum, which has contributed to substantial growth in demand for the product.
In 2016-17, Bosselman stations sold 300% more E15 than the previous fiscal year, he said, while E15 demand grew by 225% in 2017-18 and is projected to grow by another 400% this fiscal year.
Helping is growth in the number of ethanol-compatible vehicles. While vehicles built in 2001 or later are able to burn certain ethanol blends, carmakers have recently produced engines capable of accepting E15.
Barry Smith, director of automotive technology and motorcycle repair at Southeast Community College in Lincoln, said ethanol can be used to run most modern internal combustion engines.
“Over the last 2 to 3 years, it almost becomes the outlier that vehicles won’t tolerate E15,” Smith said. “Just as recently as 6 to 8 years ago, only the few and far between would tolerate it.”
A quarter-century ago, mechanics would tell drivers grain-based alcohols like ethanol could wear away the edges of rubber hoses in the engines. That’s no longer true, he said.
If drivers are unsure whether or not they can fill their tanks with E15, they should consult their vehicle’s owner’s manual: “It’s usually pretty straight forward. They either will accept it or they won’t.”
Griess said over time, U.S. and Nebraska drivers have seemed to get passed what he called a “stigma that E15 is harmful.” The recent rule change should solidify that belief, he said.
“The EPA lifting guidelines built on old rulings is telling people it’s no longer that way,” Griess said. “Once the customer decides to make that choice and it doesn’t affect their whole vehicle, we’re getting return customers.”
While ethanol suppliers and buyers are applauding the Trump administration’s move, many feel the effects of the rule change won’t be felt immediately.
Carl Sitzmann, CEO of E-Energy Adams in northern Gage County, which has about 50 employees and produces 100 million gallons of ethanol annually, said while more retail locations will be able to offer ethanol-blended products immediately, manufacturers won’t see instant increases to demand.
That will come slowly as more wholesale providers begin to offer their own E15 blends — which in turn will make the fuel more widely available.
Greater demand for ethanol in the future means more demand for corn — one of Nebraska’s staple ag commodities.
Sitzmann said the Adams plant sources its corn locally, produces ethanol for local use, and sells byproducts from the manufacturing process — distiller grains — to local cattle feeding operations.
“If we produce more, we buy more corn from local farmers and sell our distiller grains to livestock feeders, which helps grow Nebraska,” he said.
Kelly Brunkhorst, executive director of the Nebraska Corn Board, said a frigid spring, record flooding across a large area of the state and an intensifying trade war led to much uncertainty for corngrowers this year.
Before the flooding in March, there were to be an estimated 9.7 million acres of corn planted in Nebraska this year. Brunkhorst said while the official acres planted won’t be known until the end of the month, he estimates a few hundred thousand acres of corn won’t be planted.
Further uncertainty in planting had begun to bring corn prices back up, although that was moderated by talk of leveling tariffs against Mexico for what the president has described as a refusal by the U.S. neighbor to stop Central American migrants from entering the U.S.
With a deal between the U.S. and Mexico staving off another trade war last week, and the expansion of E15, which promises to increase the more than 600 million bushels of Nebraska-grown corn trucked to ethanol plants every year, Brunkhorst said corngrowers’ prospects are improving.
“The outlook is brighter for the demand side of things,” he said.
But those involved in Nebraska’s ethanol industry, either directly or tangentially, said more could be done, like scaling back the number of exemptions Trump’s EPA has granted to oil companies allowing them to waive ethanol-blending mandates.
Kevin Ross, a 6th generation farmer from Minden, Iowa, praised Trump and other elected officials for following through on the promise to expand the sale of E15, but said the president and his administration has more work to do.
“The EPA’s oil refinery waivers threaten to undo your good works,” Ross said, adding they hold back the farm economies and ethanol industry from reaching their full potential. “I implore you to tackle this with the same tenacity and vigor you have on border security and other issues.”