12-9 IAT Ethanol-Corn

EPA Proposes to Reduce Ethanol Volume Obligations: Recently the EPA announced their proposed rule for the 2014 renewable volume obligations (RVOs) for the Renewable Fuel Standard (RFS).  EPA is proposing to reduce the RVO for conventional ethanol (corn based) by 1.39 billion gallons from 14.4 billion gallons to 13.01 billion gallons as outlined in the proposal.I wondered about the impact of this new ruling on corn growers and contacted University of Idaho economist Paul Patterson: "Is the whole ethanol thing going to come to a not grinding halt, but is it going to start slowing way down and what is the impact in terms of corn? While I'm not sure I agree with your initial premise. I've seen studies on both sides of the issue in terms of whether corn, grown to be used for fuel, whether or not it is a net positive or net negative and I think those battles will be fought for the foreseeable future. I think the most un-biased analysis that I have seen from the department of energy showed kind of a mixed bag. It was really close. There was a net energy production, maybe not a real big one compared to how many BTUs of energy go into the production of corn versus how many come back out. But then it's all dependent upon where you start and stop that calculation."