In agriculture, we generally focus on energy as an input and a cost to operations. But as consumers and governments look for alternative sources of energy, not only to meet their needs but to clean up emissions, “energy” is a golden opportunity to create demand for the commodities we grow.
In the early days of ethanol (E10 to E85) coming to market, we saw great market demand for commodities, specifically corn. Corn took acres away from other crops, effectively raising prices on nearly all other commodities. We enjoyed a short window of higher commodity prices, success in the marketplace and farm profitability.
We are now seeing a movement toward E15, and hopefully E30. Ethanol is a great blend for gasoline to enhance octane levels and reduce some of the emissions and health issues associated with emissions. I am proud to see CHS, our farmer-owned cooperative, put E15 into terminals in North Dakota to make it more readily available for everyday use.
The next big step will be renewable diesel. Renewable diesel fuel is a biofuel that is chemically identical to petroleum diesel fuel. Renewable diesel meets the American Society for Testing and Materials (ASTM) specification for petroleum diesel and may be used in existing petroleum pipelines, storage tanks and diesel engines. This is different than blended diesel (B5 or B20), which is simply a blend of a refined plant or animal oil with crude oil diesel. Renewable jet fuel can also be made in the same or similar process as diesel fuel and would supply our military, which is a large consumer of energy.
It is likely that renewable diesel will be produced from soybeans or canola. As you can imagine, this will be a huge market for farm commodities. It will continue to create demand for products that can be converted to energy. Demand generally means higher prices, which is our overriding goal at Farmers Union. NDFU will continue our efforts to increase usage of ethanol blends, and to work with budding renewable diesel plants to get a supply of this product to market.
Many people like to confuse the use of commodities to produce renewal fuel as competition for food acres. This is not true. Dry distiller grains are an important byproduct of ethanol production as is leftover soymeal and canola meal in renewable diesel production, all of which are excellent animal feeds.
The U.S. and world economies rely on energy for them to thrive. We will need all sources to meet demand. Even when wind, solar and other sources are added to the mix, we will still need current energy sources. Agriculture has a great opportunity to be part of the energy solution.
As a member of NDFU, you should always request fuels from renewable sources, blended or otherwise. This grows the market for farm commodities!
– NDFU President Mark Watne