Brooks: Biofuels Legislation Offers a Lifeline to Petroleum Industry
By Thomas R. Brooks, Western Dubuque Biodiesel
Published March 28, 2021/Dubuque Telegraph Herald
I would like to commend petroleum company owner Steve Demmer for stating his support for farmers and biofuels in a recent opinion piece published in your newspaper. I also applaud the statewide petroleum association for changing its name to FUELIowa to better reflect our evolving fuel supply. However, I must take issue with his reasons for opposing the Iowa Biofuel Standards, which would increase biodiesel and ethanol blends in our fuel supply.
Minnesota has a 20% biodiesel standard in place, but federal data do not align with Mr. Demmer’s claims of decreased sales there. Energy Information Administration data show on-road diesel fuel sales have increased 40% since 2010. Analysis of Minnesota fuel price data shows no increase in fuel prices at the pump due to the biodiesel standard.
Mr. Demmer says there is an infrastructure problem on the petroleum side, with only a few petroleum terminals in the state blending biodiesel and many fuel stations unprepared to offer E15. Luckily, biodiesel distribution from the terminal is not the only option and this bill would more than triple current funding for retailer grants to add the necessary infrastructure to offer E15.
It’s common for fuel suppliers further down the supply chain to have their own blending equipment. This provides the opportunity for fuel suppliers to increase their profit margin and save customers money, because the large oil companies can’t control the entire price and capture the federal incentives for themselves. You have to wonder how big a barrier the terminal availability really is, given that data from the Iowa Department of Revenue show biodiesel-blended fuel represented 70 percent of the total reported sales of on-road diesel last year in Iowa. Something there is working.
Upping that usage of biofuels even more while encouraging higher blends will amplify the benefits returned to our state in the form of reduced carbon intensity and increased economic activity. In fact, a new study by ABF Economics shows the Iowa Biofuels Standard would add $457 million to Iowa GDP and support more than 3,500 additional jobs in all sectors of the Iowa economy by 2026. That’s real impact.
Other states are trying to phase out petroleum entirely by revamping their infrastructure to accommodate mass adoption of electric vehicles to reduce carbon emissions. If our petroleum friends think biofuels infrastructure is a barrier to their business, how do they feel about an electric future that could put many of them out of business altogether? Compared to electrification, biofuels have similar benefit for reducing carbon emissions and are a more economical choice with more immediate benefits.
The petroleum industry has staked its opposition on consumer choice, yet itself has enjoyed unfettered domination of our fuel supply throughout most of our history. It’s time for our fuel supply to evolve for the better, with biofuels. Perhaps the petroleum industry should view this legislation as less of a threat, and more of a lifeline to the future.
Tom Brooks is General Manager of Western Dubuque Biodiesel in Farley, Iowa and past chairman of the Iowa Biodiesel Board.