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A conversation with Ron Batey

Dec 7, 2023

As state and national policy continues to push for carbon reduction, the energy landscape is evolving. In an education session on December 7 at the CHS Annual Meeting, Ron Batey, CHS senior director, refined fuels pricing and economics, and other experts from CHS discussed the impact of emerging energy on supply chains and markets, as well as how policy affects energy’s evolution.   

Just before the Annual Meeting, we chatted with Batey about the future of emerging energy.

What are the top things CHS owners need to know about emerging energy?

Things like electric vehicles and new renewable fuels are growing slower than the media would have you believe. This is an evolution, not a revolution. Nobody's invented a new energy — it’s the same energy sources, but global governments want to lower the carbon intensity of our energy system. We are researching how to supply lower-carbon energy, but it’s going to be a slow change, not a disruptive change.

Will there be a point where agriculture will not rely on diesel fuel?

The lower the energy use, the easier it is to switch to an alternative energy. For example, there have been electric golf carts for a long time. For heavy-duty applications where you need a lot of power in short seasonal bursts, you still need the power and portability of diesel fuel. Technology and power transmission would have to drastically change for farming and agriculture to not be diesel dependent.

How does the evolution toward renewable fuels affect crop production and producers?

It’s exciting for CHS and our owners. There is a whole supply chain built up around soybean oil for renewable diesel. As new crush plants come online to support that renewable diesel, they'll need more United States soybeans. That's a big shift in demand that didn't exist in the past. 

When it comes to corn ethanol, a lot of people are nervous about electrification driving down gasoline demand, which is where most of the ethanol in the United States goes today. But on the upside, we're looking at selling E15, so 15% ethanol in gasoline, as a way to decarbonize the gasoline that everybody uses every day. Another exciting technology that's further out in the future is we may be able to make sustainable aviation fuel out of ethanol. We may be able to make plastics and chemicals out of ethanol.

How is CHS preparing for the future of energy?

CHS has taken a scenario-planning approach. Our goal is to keep our owners’ energy needs as a priority, making sure they have the fuels that are going to supply them today, as well as the fuels of tomorrow. So we participate in the crush of soybeans, we participate in producing ethanol and we participate in petroleum refineries. Our goals are safe, reliable facilities that are competitive but also have options. As we look to do this while decarbonizing our refineries, we are going to keep evaluating scenarios and key metrics so when the time is right, we can capitalize on energy’s evolution. 

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