WILMOT, S.D. — Some ethanol promoters used advertisements to push for 30% blends of ethanol President Donald Trump during his visit to Mount Rushmore at Rapid City, S.D., for the Independence Day holiday.
Orrie D. Swayze would like to see that, but wants so much more.
Swayze, 76, a retired farmer from Wilmot, S.D., for several has been buying his own newspaper ads from time to time, trying to nudge and needle the powers-that-be into greater support for ethanol fuel. Instead of stopping at 15%, or even 30% — both of which are controversial among some opponents — Swayze wants to go to 50%, which even ethanol enthusiasts say is a bridge too far.
Swayze acknowledges some of his best friends would like him to shut up. They tell him to cool it with his partisan shots but he thinks getting under people’s skin it’s worth it to spread the “truth” of ethanol.
If existing taxes on the petroleum industry were more fully used to promote ethanol among consumers based on environmental and human health priorities, and “they’d just buy it.” And, he adds, “If South Dakota does it, the nation does it. That’s the history.”
Swayze grew up on his family’s homestead where his son still farms. He went to South Dakota State University in general chemistry and into ROTC. He was in the Air Force and dropped bombs over North Vietnam. His brother was killed in action in Vietnam in 1969. Swayze resigned and came back home to teach school and then farm.
He became worried about Middle Eastern oil imports, and thought ethanol made from corn might help improve U.S. energy independence. “I knew the next war would be oil, and I wanted to take it off the table,” he remembers.
As time has gone by, the U.S. has become more energy-independent. Swayze has shifted his focus on ethanol as a way to improve the environment and human health. He’s seen a parade of ethanol policies, starting in the late 1970s with federal tax incentives.
In the 1980s, federal and state subsidies helped keep ethanol in production when prices fell with crude oil and gasoline prices.
Swayze was one of a handful of South Dakota corn leaders who was dubbed by politicians of the time as a “missionary lobbyist” in his efforts to pass a “pipeline tax” (more formally, an “oil tank inspection fee”) in the mid-1980s, a sales tax on South Dakota tax on any oil imported at the pipeline.
Swayze was the founding vice president and president of the South Dakota Corn Growers Association, serving eight years in those two posts. He was an early leader in the South Dakota Corn Utilization Council. Today, he acknowledges he’s often out of step with the groups, in part because often his messages have partisan overtones.
But he says it was the policies he and allies advocated that helped lure Jeff Broin to come from Minnesota to buy a bankrupt ethanol plant at Scotland, S.D., an ethanol enterprise that became POET Inc., which is one of the major ethanol producers in the country.
They created a toehold for South Dakota to create $4 billion a year of economic input.
In 1989, Swayzee and friend Merle Anderson of Climax, Minn., were among the founding board members for the American Coalition for Ethanol, a group that lobbies for ethanol. Those pioneers dramatically would flout laws, putting E85 the 85% ethanol blend — E85 — into standard cars and driving them, even when manufacturers advised against it and if it was technically illegal.
David Hallberg of Omaha, Neb., and a Sioux Falls, S.D., native, is ethanol strategic consultant, and longtime acquaintance of Swayze. Hallberg is raising funds for a legal challenge to the Trump administration’s recent fuel efficiency rules. Hallberg and friends say the EPA downplays the harm from reduced fuel standards and ignores the efficiency and health benefits of higher ethanol blends.
Hallberg says Swayze has often been ahead of his time. A former chief of staff to Rep. Berkley Bedell, D-Iowa, Hallberg worked in league with former Sen. Tom Daschle, D-S.D., to champion ethanol and other biofuels as the fuel was rising. Swayze sometimes is “tone deaf” to the “politically practicalities” that ethanol proponents must deal with, akin a “John the Baptist” — a prophet for ethanol.
Hallberg says tax credits Swayze and his promoted for ethanol went away 2010. The trade-off was that the Renewable Fuels Standard that has helped driven the demand at 700 million gallons a year. Today, the value proposition for ethanol is octane, and the octane costs at the refinery made out of crude oil is expensive,” Hallberg said. Swayze keeps pushing — even pushing too hard.
“I like to talk about it as truth,” Swayze says with a smile. It’s what he can do.
Ethanol’s rich history
Swayze has witnessed or lobbied on key ethanol developments over four decades:
1976 — Led by U.S. Sens. George McGovern, D-S.D, and Bob Dole, R-Kan., the 1976 Tax Act started at 4 cents per gallon of ethanol, or 40 cents a gallon at 10% ethanol.
1979 — President Jimmy Carter started policy toward gasohol (E10) use to offset the political effect of grain export sanctions against Russia when they invaded Afghanistan. Reagan rescinded the executive order.
1990 — Clean Air Act amendments eliminated lead in gasoline and included a provision to, over time, replace ethanol would “greatest achievable extent” the carcinogenic aromatics in gasoline.
2000 — Federal government started a phase-out of MTBE as an oxygenate in gasoline because its manufactures contaminated groundwater, creating an opening for ethanol as an oxygenate.
2003 — Minnesota required gas stations to sell E10 blends of gasoline, and amended it to require the highest blend of ethanol mixes allowed by federal law. This was a harbinger.
2005 — Saudi Arabia increased oil production, crashing prices. The U.S. passed the first Renewable Fuel Standard act the same year.
2007 — Congress passed a second RFS, increasing use from 7.5 billion gallons ethanol to 15 billion, and setting even higher amounts for non-corn ethanol. The U.S. settled into “blend wall” where refiners blended ethanol to 10% ethanol for most gasoline purchased. EPA said “standard vehicles” (those that aren’t built as flex-fuel, to take 85% ethanol) weren’t proven to take more than 15% ethanol. This is despite other tests by Swayze and others and Brazilian anecdotal data. “If EPA want to prohibit E15 ... it’s their obligation to prove that it makes bad emissions. That’s what we’re going to prove in court.”
2007 — Minnesota got its first “blender pump” at Ortonville, Minn., now Border State’s Cooperative, where Swayze was on the board.
2010 — Federal tax credits for ethanol expired. Underlying this fact is that gasoline makers blend in their full amount, so they can buy RFS “credits” from those who make more than required. These described are “renewable identification numbers,” or RINs, which carry a cost. The administration has the authority to waive the requirement on a “hardship” basis. Since 2013, the EPA has grants waivers in batches, which reduces ethanol demand.