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Corn Ethanol Production Plays Important Role in South Dakota’s Economy

Corn and corn ethanol production are vital components of South Dakota’s economy. The corn ethanol industry supports thousands of jobs in our state and contributes a significant amount of revenue to our local communities. Corn ethanol has taken a hit in recent years, due in part to the high number of waivers issued by the Environmental Protection Agency (EPA) to small refineries. This has reduced the amount of ethanol required by the Renewable Fuel Standard (RFS), thus reducing the demand for corn and corn ethanol.


The RFS is a program created by Congress and administered by the EPA that is aimed at increasing the use of renewable fuels such as corn ethanol in our nation’s fuel supply. The RFS requires 15 billion gallons of corn ethanol to be blended into transportation fuel in 2019.


The Senate Environment and Public Works (EPW) Committee, on which I serve, recently held a confirmation hearing for President Trump’s nominee to be EPA Administrator, Andrew Wheeler. Mr. Wheeler currently serves as EPA Acting Administrator and was EPA Deputy Administrator before that. The EPW Committee is responsible for oversight of the EPA, which is a job I take very seriously.


During Mr. Wheeler’s hearing, I had the chance to ask him about the RFS, including the number of waivers issued by the EPA to small refineries. According to the Renewable Fuels Association, this data shows that for 2016 and 2017, the RFS volumes were effectively lowered by 2.25 billion gallons.


The RFS has provided the statutory certainty necessary for the corn industry to grow and thrive, and as a result corn ethanol has become a vital component of our nation’s fuel supply. In granting so many waivers to small refineries, the EPA has effectively reduced the amount of ethanol required by the RFS and reduced the demand on corn and corn ethanol. This underscores the urgent need for year-round sales of E-15, which is 15 percent ethanol blended with 85 percent gasoline. Allowing for year-round sales of E-15 would be a huge win for corn and corn ethanol producers and could result in approximately 700 million additional gallons of ethanol sold, or 280 million additional bushels of corn annually.


President Trump has said on a number of different occasions that he supports year-round sales of E-15. I had a chance to reiterate the need for year-round E-15 sales when I was with the president during his visit to South Dakota last fall, and he agreed. I’m pleased Mr. Wheeler agrees for the need of year-round sales of E-15 as well. In a meeting I had with him recently and during his confirmation hearing, he reiterated to us that the administration and the EPA are committed to getting E-15 done before the summer driving season. We intend to hold him to that commitment. 


An open marketplace with more fuel options for consumers encourages competition and drives down consumer fuel costs. E-15 also lowers evaporative and tailpipe emissions when compared to 10 percent ethanol fuel, improving the environment. Resolving this issue also provides a pathway to increase farm income at a time when producers are struggling with trade uncertainty, a depressed farm economy, low commodity prices and tight margins.


I plan to support Mr. Wheeler’s confirmation and I look forward to working with him on these and other issues at the EPA that impact our state.