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Corn ethanol competitive, growing overseas
Corn ethanol production is taking place in Argentina and, soon, in Brazil, a sign that the industry can compete with sugarcane ethanol in South America, and that it's economically competitive, according to Bruce Rastetter, an agricultural entrepreneur and president of the Iowa Board of Regents.
"The reality is that when we have $100-a-barrel oil, it just makes sense to blend ethanol," Rastetter told attendees of the Land Investment Expo in West Des Moines, Friday.
Rastetter is CEO of the Summit Group, a diversified agribusiness with a farming operation headquartered in northern Iowa. He's also on the board of Advanced BioEnergy, a 50-million-gallon ethanol plant in South Dakota.
"I would suggest to you that the golden age of agriculture would not be here if it wasn't for ethanol," he said of production in the U.S. "Irrespective of the debate over the ethanol mandate, ethanol margins are off to a good start in 2014."
In response to a question, Rastetter said that Argentina has a couple of ethanol plants and that Brazil will soon, and it will be competitive with sugarcane ethanol.
Rastetter, who was also an early supporter of the ethanol lobbying group, Growth Energy, said he doesn't know what the EPA will do about its proposal to reduce the renewable fuel standard for 2014.
"It just doesn't make sense to step back. It's not a government subsidy," he told Agriculture.com in an interview after his talk at the Land Investment Expo.
Continuing to ramp up the RFS would create opportunities to move from E10 to E15, he said. "We can do it cost effectively," he said.
The RFS is more about ensuring access to the U.S. fuel market, he said, when the oil companies have, in effect, a mandate to supply gasoline in 90% of fuel containing 10% ethanol.
"The oil companies have a reverse mandate because they make more by refining oil than they do blending ethanol," he said.
In Brazil, where blender pumps are common, consumers have a choice to buy between 10% and 90% ethanol, he said. "When you go to the pump, it gives you a choice."