DECATUR — When the Trump administration granted ethanol waivers last month to 31 small oil refineries, many farmers were upset.
“It’s terrible,” said Paul Berbaum, who farms west of Champaign. “I just don’t see any solution.”
Between 45 and 50 percent of Illinois corn is used for ethanol, said David Loos, director of research and business development at the Illinois Corn Growers Association.
“I mean, it’s huge in Illinois,” Loos said.
Unsurprisingly, the state corn association’s tent at last week’s Farm Progress Show mentioned ethanol nearly everywhere you looked, from the American Lung Association table to multiple American Ethanol trucks touting it as the “homegrown solution.”
When U.S. Agriculture Secretary Sonny Perdue visited Decatur on Wednesday, he said the administration is trying to mitigate some of the damage from the waivers, which lifted a requirement for the small refineries to blend ethanol with gasoline.
“The president understood that was way overdone, and we’re meeting furiously to try to recover some of that demand destruction that those small refinery waivers did,” Perdue said. “We’ve had to be very creative legally in order to do that, and hopefully, I think this is the kind of thing that the president wants to announce himself because it’s been diligently crafted, and I think it will give us some relief.”
The next day, President Donald Trump defended the waivers.
“The Farmers are going to be so happy when they see what we are doing for Ethanol,” Trump tweeted. “It will be a giant package, get ready! At the same time I was able to save the small refineries from certain closing. Great for all!”
Earlier this year, Trump also ended the summertime ban on gasoline with 15 percent ethanol, or E15.
That ban had been put in place to reduce smog, but corn growers applauded its removal.
Perdue said the Trump administration is also trying to allow E15 gas to be pumped at regular gas pumps, which usually have gasoline with 10 percent ethanol.
He said these steps will do more to help the ethanol industry than anything else.
“We’re working through those processes and regulations at EPA to get that done. That’s how we build demand,” Perdue said. “And I would submit to you that’s more important than any of the things we’ve talked about. Going from E10 to E15 is very important. That’s like 50 percent (growth). And we can’t expect that kind of growth in corn export demand.”
Berbaum was skeptical that E15 would offset the ethanol issues farmers are facing.
“It would if everybody used E15. The problem is the gas stations can’t go to E15 without upgrading pumps,” he said. “I don’t know what the answer is. I just can’t see that what they’re doing is going to fix the problem.”
Regardless of Trump’s policies, the ethanol industry faces a more existential threat in the long term: electric cars.
Electric cars still only make up about 1 percent of new car sales in the U.S., according to the industry website EVAdoption.
But if electric cars become cheaper, they’re expected to grow in popularity, and of course, they don’t use ethanol.
Mike Finarty, an educator at the Farm Progress Show with the industry partnership American Ethanol, said ethanol and electric cars both face infrastructure problems.
“They have just as many growing pains as we do,” he said. “We don’t have enough pumps for people to get ethanol. They also have infrastructure that they have to develop so people can have a charging station” nearby.
“We can co-exist,” Loos said.
And regardless of the long-term prospects for ethanol, researchers are continuing to search for new uses for corn.
Veera Boddu, the research leader at the National Center for Agricultural Utilization Research in Peoria, showcased the group’s work, which in the past has led to innovations such as high-fructose corn syrup.
At this year’s Farm Progress Show, he showed various products made from plant parts that could help grow demand for farmers, including biodegradable food containers and silverware, particle board, straws and cups, many made from mostly cornstarch.
“Nowadays we have a surplus of corn, so how do you use that?” he said.