The Environmental Protection Agency (EPA) announced its approval to use blends of ethanol up to 15% in cars and lightweight trucks for model year 2007 and newer. EPA indicates this represents approximately 65 million cars and about one-third of the domestic fuel used. EPA also indicated that it will make a decision on E15 for model years 2001-2006 later this year, after the Department of Energy completes its testing, which is expected in November. In addition, EPA is proposing E15 pump labeling requirements, including a requirement that the fuel industry specify the ethanol content of gasoline sold to retailers. A quarterly survey of retail stations would be conducted to ensure gas pumps are properly labeled. Secretary of Agriculture Tom Vilsack said, “Today’s announcement from EPA is an important step toward making America more energy independent and creating much-needed jobs in rural America.”

Reaction to the E15 Approval — Reaction by proponents of the higher ethanol blend varied. Growth Energy, which petitioned EPA for E15, called the decision a “historic first step” in cracking the blend wall put in place over 30 years ago. The National Corn Growers Association commented, “We’re disappointed in the very limited scope of this approval, but pleased the EPA has finally taken action to partially approve the waiver request to allow higher blends of ethanol in some motor vehicles. We believe this bifurcation of the approval process, and the labels that are expected to be placed on higher-blend fuel pumps, can lead to general consumer confusion and, therefore, act counter to the original intent.” The American Farm Bureau Federation said, “Ethanol is a clean-burning, home-grown renewable fuel. Increasing the percentage of ethanol in the domestic gasoline supply moves our nation one step closer to greater energy independence. It also promotes job creation in rural America.”

Opponents of the higher blend rate filed their concerns, too. The National Pork Producers Council (NPPC) is consulting with economists to determine the impact of the decision. “Any upward pressure on corn prices will have a negative effect on producers. Given that the U.S. Department of Agriculture’s Oct. 8 crop report revised down the expected yield and ending stocks of corn, we’re already seeing corn prices and the cost of raising a hog heading upward,” NPPC stated. The American Meat Institute (AMI) commented, “USDA's recent estimate that corn production for this year was going to be 3.4% less than 2009 has sent corn prices higher. This will put pressure on the meat and poultry supply, which will lead to higher food prices for consumers. For those consumers worried about climbing food prices, this decision will increase the amount of corn being diverted to our gas tanks and away from meat and poultry production. It’s unfortunate that EPA acted hastily and approved the use of E15, and now the American consumer will pay for it at the grocery store.” The Grocery Manufacturers Association said, “We are disappointed in the administration’s decision to allow more ethanol in gasoline before truly sustainable advanced biofuels are commercially available. Not only will this decision adversely affect millions of consumers who don’t drive brand new cars, but also countless Americans who are struggling to feed their families in a slowly recovering economy. Recent spikes in corn prices due to supply concerns will only be exacerbated by this decision.”

The National Petrochemical & Refiners Association said, “EPA's unwise and premature decision to allow the sale of gasoline with higher levels of ethanol may be good politics in Corn Belt states on the eve of the mid-term elections, but it is bad news for every American who owns a car, truck, motorcycle, boat, snowmobile, lawnmower, chainsaw or anything else powered by gasoline."

Protect Producers from Burdensome EPA Regulation — Congressman Collin Peterson (D-MN), chairman of the House Agriculture Committee, introduced H.R. 6273 to prohibit additional permits for pesticide application when pesticides are applied consistent with the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). Peterson said, “This legislation provides farmers and ranchers with the safe harbor they deserve in the application of pesticides. The bill relieves producers from a potentially costly regulatory burden that does little if anything to protect the environment.” In January 2009, the 6th Circuit Court of appeals overturned a 2006 Environmental Protection Agency (EPA) rule that specifically exempted permitting of certain pesticide applications from the Clean Water Act (CWA). The legislation is to make clear those producers who are in compliance with FIFRA requirements are not subject to CWA permits.

Bt Corn Benefits Farmers — A group of agricultural scientists has found that corn that has been genetically engineered to produce insect-killing proteins isolated from the soil, bacterium Bacillus thuringiensis (Bt), provides significant economic benefits even to neighboring farmers who grow non-transgenic varieties of corn. Secretary of Agriculture Tom Vilsack said, “Modern agricultural science is playing a critical role in addressing many of the toughest issues facing American agriculture today, including pest management and productivity. This study provides important information about the benefits of biotechnology by directly examining how area-wide suppression of corn borers using Bt corn can improve yield and grain quality, even of non-Bt varieties.” The study estimated that farmers in Iowa, Illinois, Minnesota, Nebraska and Wisconsin received cumulative economic benefits of nearly $7 billion between 1996 and 2009, with benefits of more than $4 billion for non-Bt corn farmers alone. Scientists participating in the study were from USDA’s Agricultural Research Service (ARS), University of Minnesota, University of Illinois, University of Wisconsin, Pennsylvania State University, University of Nebraska and Iowa State University.

P. Scott Shearer
Vice President
Bockorny Group
Washington, D.C.