2014 CornventionFebruary 19, 2014

Pam KeckDirector of BiofuelsNational Corn Growers Association

“The Future of Ethanol and E15”

Corn Ethanol Past, Present, Future

- NCGA Ethanol Committee- Corn Production- Corn Ethanol Co-Products- Renewable Fuel Standard, RFS- Required Volume Obligation, RVO- Consumer Demand

• Policy• Maintain and Expand Markets• Environmental Impact• Co-products• Education and Promotion

About the NCGA Ethanol Committee

Feed/Residual – 39.5%Ethanol - 30.8%Distillers Grains - 9.2%Export – 8.4%FSI – 12.1 %

Corn Demand

Million Acres

Source: USDA

Billion Bushels

Acres and Production

Land Use Soil Loss Irrigation Energy Climate

Amount of land to produce one bushel of corn

Soil loss per bushel, above a tolerable level

Irrigation water use per bushel

Energy used to produce one

bushelGHG emissions

per bushel

30% 67% 53% 43% 36%

Source: Field to Market

Sustainability increases 1980-2011

The cost of corn in these food items at… $4per bushel

Corn Flakes Cereal 12.9 ounces of milled corn produces one 18-ounce box (USDA) 6 centsSoda/Soft Drink15 ounces of corn (as HFCS) per 2-liter bottle (USDA) 7 centsBeef 2.6 pounds of corn to produce 1 pound (Beef Checkoff) 18 centsPork3.6 pounds of corn to produce 1 pound of pork (Pork Board) 25 centsChicken2.6 pounds of corn to produce 1 pound of chicken (USDA) 18 centsTurkey2.6 pounds of corn to produce 1 pound of turkey (NTF) 18 centsEggs4 pounds to produce one dozen (American Egg Board) 28 centsMilk1.8 pounds to produce one gallon (USDA) 13 cents

Corn is an inexpensive ingredient

Source: Bunge

62% starch (polymer of glucose)15% moisture3.8% oil19.2% protein and fiber

What’s in a kernel?

31.5 lbs. of starch OR33 lbs. of sweetener OR2.8 gallons of ethanol OR22. 4 lbs. of PLA fiber/polymer

+ 17.5 lbs of DDGS

+ 1.5 lbs. of corn oil

C2H6O

Composition:protein, fat, fiber

Corn Ethanol Production has TWO Co-products

Enacted by Congress and implemented by EPA in 2005and modified in 2007 (RFS2) to:

• Decrease reliance on petroleum

• Decrease GHG emissions

• Enhance rural economy

Purpose of the RFS

Renewable Fuel Standard Volumes

U.S. still imports 3 billion barrels/year

RFS has decreased U.S. foreign oil

Since 2007, a reduction of approximately 200 million metric tons of CO2 - the equivalent of taking 39 million cars off the road.

EPA predicted by 2022 corn starch ethanol would produce 20% less GHG emissions than gasoline from petroleum. We are there TODAY and a strong scientific case has been made that the number is closer to 50% reduction.

The RFS has decreased GHG emissions

• Since the RFS was enacted in 2007 total direct government payments, adjusted to 2009 dollars, have decreased

• Since 2005, farming sector property tax payments have increased by 28%

• Since 2005, increase in ag jobs of 5.4%

• Since 2006, 97% increase in farm income

The RFS has spurred rural economy

2014 Required Volume Obligation, RVO

Biofuel Category*

RFS2Statute

EPA Proposed

NCGA Proposed

Cellulose 1.75 0.017

Biomass-based diesel

1.5 (minimum)

1.92(1.28 actual)

>2.55(>1.70 actual)

Advanced (total) 3.75 2.20 3.75

Total Biofuel 18.15 15.21 18.15

*all volumes are ethanol-equivalent unless otherwise specified in billions

Total – Advanced = 14.4 13.01 14.4 (conventional)

If the EPA moves forward with a reduction in corn ethanol volumes this will most certainly: • Confound agricultural planning and marketing• Threaten the economic viability of corn growers and

ethanol producers• Diminish the reduction in GHG emissions• Diminish energy security• Undermine business plans for future biofuel

optimization and expansion• Threaten the further development of engines to run on mid-level blends of ethanol (MLEB)

RFS must stay the course

Auto makers embrace octane from ethanol

Summary of multiple published articles from the automobile industry and a government lab show that ethanol in the 20-30% range can:

• Increase compression ratio, thereby engine efficiency

• Reduce knock tendency• Reduce combustion gas temperatures and

criteria pollutant emissions• Produce no loss in volumetric fuel economy

(mpg) and range 

Moving to mid-level ethanol blend requires…

• Feedstock and fuel providers working with automotive manufacturers

• Alignment with fuel retailers and equipment manufacturers and supportive education, promotion,

marketing

• Policy alignment between USDA, DOE, EPA

• All of us promoting ethanol as: non-toxic, renewable,cleaner, low-cost source of octane (compared to BTX)

• Buy FFVs, use E85 and E15

Thank you!

Proposed 2014 Volume Requirements

22

Category Volume (Mean)a Range

Cellulosic biofuel 17 mill gal 8 - 30 mill gal

Biomass-based diesel 1.28 bill gal 1.28 bill galb

Advanced biofuel 2.20 bill gal 2.0 – 2.51 bill gal

Renewable fuel 15.21 bill gal 15.00 – 15.52 bill gal

aAll volumes are ethanol-equivalent, except for biomass-based diesel which is actual volume.bEPA is requesting comment on alternative approaches and higher volumes.