Could an EPA decision make it cost more for Nebraskans to fuel up at the pump? Oil companies and ethanol advocates both say yes, but for different reasons.
When the Renewable Fuel Standard was enacted in 2007, it was based on projections that Americans would be burning more fuel today than that they actually are. That's thanks to more fuel efficient vehicles and less driving.
Now the Environmental Protection Agency is recommending changes to the RFS that would require less ethanol to be used. The National Corn Growers Association says corn ethanol would be reduced by 1.4 billion gallons. It's a proposal that corn farmers like Curt Friesen think is wrong.
"My concern is that down the road when blending margins aren't so good, that those oil companies could decide not to blend ethanol if they were not required to, and at that point we would do tremendous damage to our ethanol industry," says Friesen, a member of the Nebraska Corn Board.
Nebraska ranks second nationally in ethanol production, making over two billion gallons a year. Farmer Brandon Hunnicutt says the uncertainty of demand is hurting them now.
"I believe on the technology side, just on the cusp of, we've got new corn varieties out there that are made specifically for ethanol that really increase ethanol production, but it leave the farmers in flux of what do I grow for next year? What do I grow for 2015?" says Hunnicutt, a member of the Nebraska Corn Growers Association.
Both Hunnicutt and Friesen traveled to Washington DC for the EPA's only scheduled hearing on the RFS changes. Farmers from twelve other states were set to testify, as well as oil company representatives.
Some oil companies say that if the EPA doesn't lower the standard, then fuel prices will go up. Groups like the American Petroleum Institute are calling for the standard to be lowered even more than the proposal.
"For the first time, EPA has acknowledged that the blend wall is a dangerous reality and must be addressed to avoid serious impacts on America's fuel supply and harm to American consumers," says Jack Gerard, President of API. "While the agency took a step in the right direction, more must be done to ensure Americans have the choice of fuels they want and we are continuing our call for Congress to act now."
But Nebraska corn groups say continuing to develop higher blends of ethanol will increase how much Americans use, pushing back the blend wall.
"If oil companies would be willing to push E15 or E85, that blend wall would no longer be there," says Friesen. "We could easily use the amount of ethanol required if we would just even move to E15."
Commodity leaders say any drop in the RFS would not be reflected at gas stations right away. They still believe it could cause higher prices in the future.
"As long as those margins stay approximately where they are, ethanol has lowered the price of gasoline in the state, so down the road, this could change that, it would actually increase the cost of gasoline," says Friesen.