Ethanol here to stay, MFA marketing head says

October 21, 2013

in Local


Tom May

By Randy Kirby
Managing editor

Tom May, head of marketing for MFA’s fuel program, delivered a speech to the Sedalia Rotary Club on Monday at Best Western State Fair Motor Inn, 32nd and Limit, focusing on ethanol. May is also chairman of the Missouri Propane Education and Research Council (MOPERC), a position he was named to earlier this year.

Virtually every gallon of gas sold in the US now contains ethanol, also called ethyl alcohol, a volatile, flammable, colorless liquid. Best known as the type of alcohol found in alcoholic beverages, it is also used in thermometers, as a solvent, and as a fuel.

Labeling on the pumps is not required for ethanol blends up to five percent, May said. That applies to unleaded as well as biodiesel fuel.

But there is a lot of controversy about ethanol, May noted. “People are pretty equally divided when it comes to ethanol. But in reality, for years, 10 percent of your gas has been ethanol based. One of things that has changed … is that the federal government passed a renewable fuel standard law in 2008. And that was really good at the time, because it gave the corn industry an opportunity to build jobs and grow towards that,” he said.

“They set these ever-increasing standards of how much ethanol should be produced,” May noted. Refineries have to purchase credits to stay in business and meet the government regulations. The recession lowered the number of workers driving to work every day, but the amount of ethanol mandated to be mixed with gasoline has increased, he noted. That presents a challenge to the oil refineries to meet the federal standards.

“But before you feel too sorry for the refineries, their (profit) margins have been off the charts this year,” May said.

A new technology called “cellulosic ethanol” can be used as a fuel additive as well. And the federal government will be requiring that more of it is used in the fuel sold in the US. “But there’s virtually none of it being made out there,” May said of the fuel additive made from organic material other than corn.

Currently, there are 40 E-85 pumps across Missouri for those driving flex-fuel vehicles. There are also five pumps that offer E-20 and E-30 fuel. “From our standpoint, and (MFA) is a farmer-owned cooperative, it offers people a choice.”

Some studies have shown that ethanol has helped reduce the price of gasoline by as much as 35 to 50 cents per gallon. “I would agree with that,” May concurred.

The price of corn today is around $4.40, May pointed out, as opposed to 10 years ago, when it hovered around $2 per bushel.

The charge that ethanol (and the increased price of corn) caused food prices to rise last year is basically bogus, he stressed. “You really can’t blame ethanol for that piece of it,” May said.

Missouri’s corn economic impact is $4.3 billion a year and sustains nearly 70,000 jobs in the state, he said. “When we buy ethanol, we’re buying it from these local companies that are producing it. So when you buy gas, 10 percent of it goes back to the local economy, he concluded. “The future looks good for ethanol,” he proclaimed.

At the time when the ethanol market really started picking up, the US was more dependent on foreign oil than it is now, May noted. But the fact remains that ethanol is an alternative choice, and a personal choice when it comes to buying and driving flex-fuel cars.

In conclusion, May noted that Sedalia is one of the cheapest places in the US to buy gas. Photo by Randy Kirby, Sedalia News Journal.

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