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Biofuel manufacturers, farmers who are not being sold, are switching to electricity

DES MOINES, Iowa – The president and auto industry claim the nation is on the verge of a giant shift to electric vehicles and away from liquid fueled cars, but biofuel manufacturers and some of their supporters in Congress are not buying them. They argue that now is the time to increase sales of ethanol and biodiesel and not give up.

With the fleet of 279 million petroleum-powered vehicles currently on US roads, the transition from liquid-fueled cars to electric cars would be gradual. And manufacturers of corn-based ethanol and soy-based biodiesel argue that biofuels will be needed for the foreseeable future.

Consulting firm LMC Automotive predicts that more than 1 million electric vehicles will be sold in the US by 2023. By 2030 it will be more than 4 million – still less than a quarter of the normal annual new car sales of around 17 million. Electric vehicles now make up less than 2% of US new vehicle sales.

Citing a recent study by Harvard and Tuft Universities that found ethanol emitting 46% less carbon than gasoline, biofuel proponents say it is imperative to the climate that the nation increases biofuel production Gives priority.

Geoff Cooper, head of the St. Louis-based Renewable Fuels Association, calls ethanol a “low hanging fruit” for reducing carbon emissions and slowing global warming. It supports an immediate switch from gasoline mixed with 10% ethanol to a mixture of 15%.

“If the goal is to reduce the carbon footprint of our transportation sector, and we knew we would be using hundreds of billions of gallons of liquid fuel over the next few decades, why not take action now to reduce the carbon intensity of that liquid? Fuels? “Said Cooper.

Each year, U.S. refineries produce about 15 billion gallons of ethanol – about 10% of the volume of gasoline – and 1.5 billion gallons of biodiesel, which is usually blended with petroleum-based diesel fuel for trucks and other heavy vehicles.

Plants across the country produce the fuel, but most are in the Midwest, led by Iowa with 43 ethanol refineries and 11 biodiesel plants. Almost 40% of the US corn crop is used for ethanol, and 30% of soybeans are used for biodiesel.

Despite the carbon benefits of ethanol, others note that the growth of biofuels has led to an increase in corn acreage, increased use of fertilizers, and increased pollution of waterways. Biofuel plants also typically use hundreds of millions of gallons of water annually.

The two Republican US Senators from Iowa view the move to electric vehicles as a threat to farmers.

Senator Charles Grassley said last fall that a proposal by Democratic Senator Jeff Merkley of Oregon and Rep. Mike Levin of California to end gas-powered vehicles in the US by 2035 would devastate Iowa.

“This … would absolutely destroy Iowa’s economy because it is so dependent on agriculture and agriculture is so dependent on biofuels,” Grassley said.

Iowa Senator Joni Ernst argues that tax credits for electric car purchases typically go to wealthy people on the east and west coasts and support an industry that is hurting demand for biofuels.

“It’s not just the move to fully electric vehicles that should affect Iowans. It’s the crazy tax breaks that wealthy coastal elites get for their electric vehicles, ”explains Ernst on her Senate website. “I firmly believe that Iowa taxpayers shouldn’t be paying the millionaire bill to get a discount on luxury cars.”

It is true that many who have received the $ 7,500 electric vehicle tax credit since it was launched in 2009 can afford a car that costs six figures or more. But since then, new models and higher sales have brought economies of scale and lower prices that appeal to more mainstream buyers.

The ethanol industry itself received a 45 cents per gallon tax credit that provided approximately $ 30 billion to help establish the industry before it expired a decade ago. And farmers who grow commodity crops like corn and soybeans continue to receive help from the federal government, including subsidized crop insurance that costs billions of dollars annually.

Despite assurances that the switch to electricity will be gradual, many farmers view the relocation as a livelihood threat and doubt that state and federal officials from urban areas will protect the rural economy.

“It’s like you’re almost helpless,” said Ed Wiederstein, a semi-retired cattle and grain farmer near Audubon, western Iowa. “It’s like a snowball going downhill.”

Joel Levin, executive director of nonprofit advocacy group Plug In America, said the market will favor electric cars not only for environmental reasons, but also for their high performance.

“It’s not that the Californians want you to eat your broccoli. It’s fun to drive these cars, ”said Levin. “People don’t drive Teslas just because it’s good for the environment. You drive Tesla because it’s a sick car. “

Over time, a switch to electric vehicles will likely force farmers to adapt, said Chad Hart, an agricultural economist at Iowa State University. Farmers in states like Iowa and Illinois will still mainly grow corn and soybeans because the soil and climate are perfect, but farmers elsewhere will grow different crops, he said.

“Agriculture is constantly shifting the crop mix to suit the markets that offer the best opportunities,” he said.

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AP Business Writer Tom Krisher contributed to this Detroit report.

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Follow Scott McFetridge on Twitter: https://twitter.com/smcfetridge

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