To Randall Doyal, ethanol seems like a no-brainer: a renewable, domestically produced automotive fuel that reduces the need for imported oil; that burns clean, reducing harmful greenhouse gases and pollution; that boosts farmers and rural economies by creating jobs and raising land values.
And he’s ready to face down the detractors — those who say corn-based ethanol operates in an artificial market, with demand created by political fiat through fuel-blend mandates and engine-emission standards; that its production removes corn from the food chain, thus raising commodity prices; that at higher blends it can harm car engines.
The food-vs.-fuel debate has been going on for years, though ebbing somewhat recently with an abundant U.S. corn harvest and low prices and low inflation. Meanwhile, the development of so-called cellulosic ethanol, made from nonfood grass products, has been slow to develop.
Doyal runs Al-Corn Clean Fuel, a Claremont, Minn., farmer-owned co-op that produces 50 million gallons of ethanol a year. On Oct. 1, he became chairman of the Renewable Fuels Association, which lobbies for ethanol in Washington, D.C.
In a recent interview, Doyal described his organization and gave its side of some of the issues ethanol faces. His answers have been edited for context and clarity.
Tell us about the RFA and how you came to lead it.
“The RFA is our national ethanol organization based in Washington, D.C.
It provides us with a person who can do lobbying on Capitol Hill, and it provides a focal point for our industry to get together to learn about policy, to have some effect or influence on what happens in Washington, and to keep ourselves advised of all the issues that affect our industry.
“It’s funded by ethanol producers around the U.S., ethanol producers who are dues-paying members and have a seat on the board. After years of being on the board and doing various things for RFA, I was asked to serve on the executive committee, at one point was the treasurer; for the last couple of years was the vice chair, and was just elected chairman.”
Does the RFA concern itself with other forms of renewable energy, say wind or solar, or do you solely advocate for automotive fuel?
“Correct. It has been historically the fuels industry, the renewable fuels industry in the U.S., which is primarily ethanol.”
Do you see the industry moving away from using food stocks to produce fuel?
“We are really feed stock-neutral. The majority of the industry does utilize corn; we don’t utilize food. There’s a big difference between food and feed, and I would hope that this last year, when ethanol production has been high and corn prices have fallen, and food prices haven’t done anything but go up, would kind of put the lie to that idea that there’s a food-vs.-fuel debate that ought to be had. It’s not that ethanol production influences the cost of food at all. Oil prices have more to do with that than anything else.”
How does that work?
“Because of transportation costs, because of packaging, there’s a lot more impact from the price of oil on food prices than anything else.”
What about making ethanol from grass or other nonedible plant material? Will that ever go large-scale?
“We certainly think there’s an opportunity there. There’s a lot of work and research being done, but it’s still a very fledgling industry and has a lot of need to grow. There’s some recent opening of cellulosic plants that make this much more visible, but as an industry it’s still very small compared to the potential for production and demand.”
Do you think ethanol-blending mandates should be flexible, taking the price of corn into account, so as not to artificially raise the price in lean years?
“Within the renewable fuels standard, there is a mechanism to allow (the Environmental Protection Agency) to say there is an issue with the cost of corn, and it has more to do with availability than anything else.
“But as you can see right now, corn prices have fallen precipitously; supplies are way up. So thank goodness we’ve got an ethanol industry that’s consuming some of that corn; it’s providing some support.”
But would your industry, and your market, even exist and compete if it weren’t for the government mandates?
“Ethanol competes in the market today. We’re selling ethanol below the price of gasoline. I think it’s completely off base to think it’s not competitive because there’s a mandate. Frankly, we have a mandate in the U.S. for 90 percent gasoline, and it’s time that we change that. We’re producing a fuel that’s cheaper, that’s higher octane, that burns cleaner, that’s renewable and that could displace petroleum.”
What about the debate over whether car engines can be harmed by higher blends of ethanol in gas?
“E15 (a 15 percent blend of ethanol), according to EPA, can be run in any vehicle manufactured after the year 2001. Their concerns had to do more with emissions systems and catalytic converters, but it will operate with relatively no difference in performance, as far as the vehicle goes.
“There has been a tremendous amount of noise by folks who don’t want to lose another 5 percent of the market share and have fought very hard to prevent acceptance of anything higher than E10.”
You mean the oil companies?
“Yes. When we look around the country, there are folks who are adopting E15 or even higher blends, folks that are offering E20-30-40, but those fuels by law are only supposed to be introduced to vehicles that have flex-fuel engines in them, that are higher ethanol-compatible.
“Anyway, you see independents, those folks that are not part of any major oil company, starting to offer those. You see it around the Twin Cities, a new group that calls itself Minnoco, offering E15, and they’re growing. But there’s almost no E15 in stations that are controlled or owned by the major oil companies.”
Do you see that changing? Say, ethanol producers partnering with oil companies to jointly market a product?
“I haven’t seen much of that yet. I would certainly hold out hope for that to happen down the road, because, frankly, that’s our customer, that’s who we sell to. So we’d love to work together with them. It hasn’t been a stellar relationship so far.”
Ethanol previously has received a lot of bipartisan support in Washington. Do you see that waning at all?
“It’s hard me to say what happens in Washington, because Washington seems to be such a dysfunctional place, but in terms of bipartisan support for the ethanol industry, I continue to see that as I go through the Midwest and talk to Midwest legislators; it really is a bipartisan issue for them, they get it and they understand.”