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NCGA Ethanol Stance Validated by EIA Report
April
18, 2002
FOR
IMMEDIATE RELEASE
Contact:
Gary Bradley, NCGA, 636-733-9004, ext. 139
John McClelland, NCGA, (202) 628-7001
(ST. LOUIS) April 18, 2002 -- After several attacks on ethanol in recent
media reports, the National Corn Growers Association's (NCGA) promotion
of ethanol has been validated after the U.S. Department of Energy's
Energy Information Administration (EIA) provided a briefing to Senate
staff. The briefing included price impacts of the Senate Energy Bill
(S. 517) fuel provisions and compared them to several other scenarios
including current law, a 19-state ban on MTBE, and a total national
ban on MTBE.
The media reports
focused on erroneous speculation of higher gasoline prices resulting
from enactment of the fuel provisions of S. 517. Those fuel provisions
include the renewable fuel standard (RFS) requiring refiners to use
2.3 billion gallons of renewable fuels, like ethanol, in 2004, and increase
that to 5 billion gallons by 2012.
"The EIA analysis
shows that the fuel provisions of S. 517 will increase average gasoline
prices by about 3 cents per gallon," said NCGA Director of Energy Analysis
John McClelland. "However most of that price increase is due to the
elimination of MTBE from the market. Price increases attributable to
implementing the RFS in S. 517 are minimal, on the order of one-half
cent per gallon or less."
McClelland said
key elements of the S. 517 fuel provisions are:
- The RFS;
- Eliminating the
RFG oxygen requirement;
- Banning MTBE
in four years;
- Creating a renewable
credit trading system; and
- Protecting the
environmental performance of RFG.
"Reformulated gas
(RFG) prices are likely to increase as much as 8 cents per gallon under
S. 517," McClelland continued. "Most of that increase is also due to
removing MTBE from the market. MTBE supplies about 10 percent of RFG
volume and if you reduce supply by 10 percent, prices increase."
"EIA's analysis
also states that the S. 517 fuel provisions are the lowest-cost way
of eliminating MTBE from gasoline," he said. "Therefore, the Senate
is not only implementing legislation that eliminates MTBE from the market,
they are mandating that this be done at the least possible cost."
McClelland concluded
by expressing his anger and disappointment concerning the actions of
media sources such as ABC, NBC, the Washington Post and the Wall Street
Journal, who have erroneously reported the misinformation concerning
ethanol in the last week.
"All of this information
was out there," he said. "For reputable media organizations such as
these to report so-called news in such an irresponsible manner is very
disappointing. For these groups to spread these myths when the truth
and the facts are easily accessible is simply unacceptable."
Ethanol supporters
can encourage lawmakers to approve a comprehensive energy package that
includes an RFS by clicking on the action alert on the NCGA
web page.
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The National Corn
Growers Association mission is to create and increase opportunities
for corn growers in a changing world and to enhance corn's profitability
and usage. NCGA represents more than 32,000 members, 25 affiliated state
corn grower organizations and hundreds of thousands of growers who contribute
to state checkoff programs.
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