In the News
April 10, 2015
By Erin Voegele
The U.S. EPA has posted a notice to its website announcing that the volume requirements for the 2014, 2015 and 2016 renewable fuel standard (RFS), along with the 2017 volume requirement for biomass-based diesel, will be finalized by Nov. 30. A portion of the new compliance schedule is the result of a proposed consent decree in litigation brought against EPA by the American Petrochemical Institute and American Fuel and Petrochemical Manufacturers.
Under the proposed consent decree, the EPA said that it will propose 2015 RFS volume requirements by June 1 and finalize volume requirements for 2014 and 2015 by Nov. 30. Also under the decree, the EPA will resolve a pending waiver petition for 2014.
Outside the scope of the decree, the EPA has committed to propose RFS volume requirements for 2016 by June 1 and finalize them by Nov. 30. The agency also said it will finalize the RFS biomass-based diesel volume requirements for 2017 on the same schedule. Regarding the 2014 standard, the EPA said it will re-propose 2014 volume requirements by June 1 that reflect the volumes of renewable fuel that were actually used in 2014.
The consent decree relates to a lawsuit filed against the EPA by the API and AFPM on March 18 in the U.S. District Court for the District of Columbia. In the compliant, the oil groups allege the EPA has violated a nondiscretionary duty under the Clean Air Act to establish renewable fuels obligations for 2014 and 2015 and to approve or disapprove a petition filed by the API and AFPM to waive, in part, the 2014 RFS. That waiver petition was submitted to the EPA in August 2013.
Documents published by the EPA explain that the consent decree is not yet final. While it has been signed by the API and AFPM and lodged with the court, it has not been signed by EPA and has not been signed or entered by the court at this time. According to a notice filed by the EPA with the court, the consent decree is not final and cannot be entered by the court until the EPA administrator provides a reasonable opportunity by notice in the Federal Register for members of the public to comment in writing. Following the public comment period, if none of the comments disclose facts or considerations which indicate that the decree is inappropriate, improper, inadequate, or inconsistent with the CCA requirements, the administrator will request that the court enter the decree.
The Renewable Fuels Association has spoken out in support of the EPA rulemaking timeline. “We applaud EPA and API for reaching an agreement that will provide all stakeholders some certainty with regard to the renewable fuel standard,” said Bob Dinneen, president and CEO of the RFA. “No one has benefited from the delays in setting annual renewable volume obligations; and while we are sympathetic to the difficulty EPA faces in promulgating annual targets, the statute is clear about the volumes required and the agency simply has to do a better job moving forward. This consent agreement is a good start. We are particularly pleased that the agency has committed to addressing the 2016 RVO in the same timeframe even though that is outside the scope of the consent agreement. More important than EPA meeting its statutory deadlines, however, is that the agency recognize the market transforming purpose of the RFS and allow the RIN mechanism to drive investment in infrastructure and compel consumer choice at the pump.”
The Adavanced Ethanol Council also supports the agreement between the EPA, API and AFPM. “The scheduling agreement between the oil industry and EPA is actually a good signal for the advanced biofuels industry because it lays out a time frame and a reasonable market expectation for resolving the regulatory uncertainty around the RFS,” said Brooke Coleman, executive director of the AEC. “Now that we have a better idea of when it will happen, we look forward to working with EPA to make sure that the new RFS proposal supports the commercial deployment of advanced biofuels as called for by Congress. We were encouraged by EPA’s decision late last year to pull a problematic 2014 proposal, and we are optimistic that EPA will make the necessary adjustments and put the RFS back on track going forward.”
Growth Energy said the EPA’s timeline will provide the industry with some certainty. “I am pleased to hear that the EPA has finally put a process in place to establish some certainty for biofuel producers with the recent announcement of the timeline for the proposed 2015 RVO rule by June 1st as well as the final 2014 and 2015 volume obligations by Nov. 30, 2015,” Tom Buis, CEO of Growth Energy, said. “Our producers have faced ambiguity for too long and today is welcome news that they are establishing a level of certainty with this announcement. However, far more important than timing is that that the EPA establishes a final rule that moves our industry forward, and reflects the bipartisan vision Congress intended for the RFS. Additionally, while not part of the consent decree, we are pleased to see that the EPA has committed to finalizing the 2016 RFS RVO numbers this year as well. By taking this action, they are ensuring that the RFS is back on a path to certainty for the biofuels industry, providing the necessary guidance for the industry to continue to thrive and advance alternative fuel options for American consumers.”
The American Coalition for Ethanol is also pleased with the EPA’s newly announced timeline. “ACE has consistently said it is much more important for EPA to get the RFS done right than it is for them to get the RFS done quickly, and that bears repeating given today’s announcement that the RFS will be getting back on track for implementation,” said Brian Jennings, executive vice president of ACE. “Last year Big Oil came close to bullying EPA to completely re-write the RFS so they could escape their legal responsibility to blend E15 and flex fuels into gasoline. But thanks to comments from ACE members and other biofuel supporters, EPA wisely chose to abandon their proposal to set the 2014 RFS on the E10 blend wall. It appears EPA is going to get the RFS back on track for implementation. Our priority will continue to be to ensure EPA holds oil companies legally responsible under the RFS for making cleaner and less expensive fuel choices, such as E15 and E85, available to consumers.”
The National Biodiesel Board said it is supportive of the EPA’s announcement. “We are pleased to see the EPA make these further commitments toward ending these delays,” said Anne Steckel, vice president of federal affairs at the NBB. “Biodiesel is the most successful EPA-designated Advanced Biofuel under the RFS to date, and the Obama Administration should be doing everything it can to promote biodiesel so we can show that Advanced Biofuels are here today, cutting greenhouse gas emissions by more than 50 percent, creating jobs and reducing our dependence on global petroleum markets that wreak havoc on our economy. The RFS is the most successful policy we have for reducing emissions in the transportation sector, and it is working. We applaud the EPA for taking this step and look forward to working with the Administration in the coming weeks to get this program back on track.”
Read the original story here : EPA To Finalize 2014, 2015 and 2016 RFS Rules By November
April 10, 2015
By David VanderGriend
In baseball, they often refer to the leadoff man as the igniter, whose job is to get the offense going: get on base, start a rally and set the stage for a lot of runs. In many respects, that’s the role of the renewable fuel standard (RFS), to set the stage for a bigger score for biofuels. But rather than focusing on a big inning, the ethanol industry may be playing small ball as we await the final rulemaking renewable volume obligations (RVO). The U.S. EPA stated it intends to package 2014 with the 2015 and 2016 volumes in what could be one heck of an announcement by the end of June.
I am encouraged by numerous recent statements out of EPA that it remains committed to making the RFS all it can be. But at the same time, let’s not kid ourselves. Do we really think there are going to be any surprises? We know that the 2014 RVO will be exactly what was consumed and 2015 is not likely to be any different. EPA will be hard-pressed to do anything more than take what was used the first half of 2015 and multiply by two, so we probably know that number as well. Sure, there might be a little more due to an increase in E15, midlevel blends and E85. For 2016, there might be a slight increase, if total gasoline use goes up. But for now, it is clear we will wind up somewhere in the 14 to 15 billion-gallons-per-year range for corn ethanol. There may be another billion or two gallons in the export market, but would the corn ethanol industry be satisfied with a 17 billion-gallon cap, when the motor fuel market is 125 billion gallons plus? I certainly am not.
I have always viewed the RFS as an important building block, assuring a base market. Whether wearing my hat as CEO of ICM or as president of the Urban Air Initiative, or as a member of most ethanol trade organizations, I support the RFS. However, it should not be viewed as what defines the value of biofuels, a value which can only be realized if we get the fuel into the market.
How do we get access to the market? How do we maintain the RFS and build on it? The answer lies with carbon controls and protecting public health—the new value proposition.
One element Congress got right with the RFS was to reward fuels that reduce carbon emissions. While the corn cap is law and, to some extent, EPA's hands are tied, the carbon footprint of corn ethanol is demonstrably better than the credit given by EPA. Our work at ICM and other new, and constantly evolving, research clearly shows that corn ethanol can attain advanced biofuel carbon-reduction levels, one of the primary objectives of the RFS.
If refocusing on achieving carbon reduction is one way to create new demand, another is the critical issue of improving fuel quality and emissions of gasoline. Ethanol's greatest strength is its high octane. This is an issue of public health in that ethanol used in midlevel blends like E15 or E30 can replace some of the most harmful components of gasoline—if we have access to the market. At ICM and Urban Air Initiative, we have concluded that EPA is blocking access to the market for midlevel blends and we are challenging them.
In legal action along with the Energy Future Coalition, ICM has asked the courts to agree that the certification procedures adopted by EPA are keeping E30 out of the market. In another challenge, UAI is calling EPA out on its antiquated modeling used to guide states on how to control pollution that includes an unwarranted penalty for ethanol. Our research, supported by auto industry experts, clearly shows many of the negative emissions attributed to ethanol are, in fact, changes made to base gasoline. Splash blending ethanol always improves gasoline quality and EPA’s outdated models simply need to be updated. Why is this so important? Gasoline is the source of some of the most dangerous and harmful pollutants linked to a range of health and respiratory ailments, including lung disease and even neurological disorders. Infants, the elderly and expectant mothers are particularly at risk.
The RFS is the platform to launch and engage the environmental and health communities in this discussion. Let’s get past the RFS numbers game—as important as it is—and look at additional ways to reduce carbon and protect public health.
Read the original story here : Setting The Table For The Big Score
April 7, 2015
As world food prices hit a near five-year low, dropping 1.5% last month according to the United Nations' Food and Agriculture Organization's most recent price report, Growth Energy said this is proof that " claims of ethanol increasing food prices do not hold any merit."
According to the FAO, the global food price has been on a downward path since April 2014. It tracks five major food commodity groups internationally: cereals, meat, dairy products, vegetable oils and sugar.
In the latest report comparing February 2015 to March 2015, sugar was down significantly, charting a 9.2% drop; vegetable oil a 3.1% drop; cereal and meat about a 1% drop; and dairy was the only gain, with a 1.7% increase.
Tom Buis, CEO of Growth Energy, said the report shows the U.S. and other nations are "capable of producing increased quantities of food, feed, fiber and fuel."
He noted that global grain stocks increased between 2006-07 marketing year and the 2013-14 marketing year by 160 million metric tons, or 47%. Those dates correspond with the enactment of the Renewable Fuel Standard, he said.
The RFS is a policy that sets the amount of renewable fuels to be blended in the domestic fuel supplies.
Buis said global crop prices have strengthened also, helping farmers invest in new production practices that improve sustainability and productivity.
Read the original story here : FAO's Latest Food Price Report Good News For Ethanol
April 5, 2015
By Ryan Koopman
Chicken Little ran nervously through the barnyard, warning that "the sky is falling, the sky is falling."
For the last decade, Big Oil has been running nervously through the halls of the U.S. Capitol and the EPA, screaming — to anyone who will listen — that the Renewable Fuel Standard is an "unworkable," "infeasible," "unsustainable," rule that will create a "death spiral" in the fuels market.
The stories are similar, with one difference: Chicken Little believed his tale.
A new study published this week by University of Calgary professor (and one-time Iowan) James Coleman shows that for years, Big Oil hasn't been completely honest about the RFS. They've been telling the EPA one thing (that the RFS is a horrible, economy-killing law) and telling their shareholders another thing (that it's no big deal). That general concept — that Big Oil has been misrepresenting the effects of the RFS — is something Iowans have been saying for years. But until now, no one has realized that Big Oil has effectively admitted as much.
Each year, the EPA proposes a new RFS — a rule that governs how much biofuel must be sold — and solicits comments on that proposed rule. These comments aren't supposed to be a joke. The EPA is required to consider them, and it's important that it does. When a regulatory body makes law, it needs input from stakeholders; they're the ones on the ground, after all. So it's important that those stakeholders be honest in their assessments.
As you might expect, oil companies — Chevron, ExxonMobil, Marathon, Shell, and others — take the opportunity to tell the EPA what they think of the proposed RFS standard. And as you might expect, they don't have good things to say. Shell told the EPA in 2013 that the proposed RFS would "limit the supply of gasoline," which would hurt its business and cause "severe economic harm." Even more forceful, the American Petroleum Institute — which boasts that it is the only "association that represents all aspects of America's oil and natural gas industry" — recently told the EPA that its 2013 RFS proposal could cause "large increases in transportation fuel costs" that "would ripple through the economy imposing significant costs on society" that would eventually push the fuel markets into a "death spiral."
That seems pretty bad. And it would be, if it were true. But it's not, and we know because Big Oil has told us.
Each year, publicly traded companies must file what's called a Form 10-K. The purpose (and the legal requirement) is to tell shareholders how the company is doing and to warn them about significant bumps in the road ahead. So if the proposed RFS is really such a problem — if there really is a risk that it will create a death spiral in the fuel markets — then Shell, ExxonMobil, Chevron, and other oil companies should be telling their investors in the 10-K.
They're not. Professor Coleman collected the comments that publicly trade oil companies made to the EPA on the RFS from 2009 to 2013 and compared those comments to those company's 10-K filings. He found that oil companies tell the EPA that the RFS could create significant financial hardship for them and the country, and at the same time they assure their shareholders that everything is OK. Indeed, Shell — the company that said that the RFS could limit the gasoline supply and cause "severe economic harm" — suggested in its securities filing that the RFS was a boon for its bottom line.
The EPA should take note, and it should review the oil companies' comments with the appropriate skepticism.
Of course, maybe the oil companies think that their sky-is-falling assessments of the RFS are accurate; maybe it's the shareholder disclosures that are the fib.
Probably not. The failure to make full disclosure to shareholders is against the law and can lead to costly lawsuits. Oil companies and their lawyers know that. Exaggerating to the EPA, on the other hand, doesn't come with legal consequences.
Professor Coleman has a simple solution for this problem: If a publicly traded oil company (or any public company, for that matter), comments on the EPA's proposed rules, it should attach its 10-K. That way, it can't tell the EPA one thing and its shareholders another. We'll get the truth — at least as Big Oil sees it.
Read the original story here : Study Shows : Big Oil Is Chicken Little Over Ethanol
April 3, 2015
By Kim Ukura
MORRIS — Local business leaders helped share the story of ethanol and its importance to the rural economy during a meeting with members of the Minnesota House of Representatives last week.
On Friday, March 27, House Majority Leader Joyce Peppin and Rep. Jeff Backer visited the Morris area to tour Denco II and, later, meet with constituents at the annual Wulf Cattle Opportunity Sale.
Backer said he invited Peppin to tour the district to better understand how ethanol works and its impact on different aspects of the agricultural economy.
"Ethanol is extremely important to the U.S. economy and our local area," said Backer. "Ag, even though it's a very small percentage of the budget, brings a lot of money into the economy and so forth."
General Manager Mick Miller said the ethanol industry's current challenge is the Renewable Fuel Standard, a federal program that requires transportation fuel to contain a certain percentage of renewable fuels like ethanol.
Without a requirement to include renewable fuels, the oil industry would force ethanol producers out of the fuel market.
"That takes consumer choice away, that's going to raise pump prices — all that we're asking for is stabilization in Congress to make sure that we have a renewable fuel standard that allows us access to the market so we can grow and continue to show the impacts ethanol is having on America," Miller said.
Miller added that the food versus fuel debate over the use of corn is also misleading. Ethanol production uses about 30 to 35 percent of corn produced in the United States, while the rest is either fed to cattle or exported.
"We're not tilling up more ground to make more corn for ethanol demand — our farmers are becoming more and more efficient," said Miller.
Board member Lowell Nelson told Peppin that without ethanol, "agriculture would go in the tank."
"Agriculture is so unbelievably dependent on ethanol at this point, it's scary to think about it without it," he said.
Miller also highlighted the ways that Denco II's production process works throughout economy. Denco II was formed in 1998 and is owned by local shareholders. The plant works directly with about 275 producers to procure corn for the facility.
During the ethanol production process, about 33 percent is turned into ethanol, while another 33 percent is converted into distillers grain. This is a high protein feed that can, in turn, be fed to cattle. Approximately 65,000 tons of distillers grain is eaten by cattle in the region, Miller said.
City Manager Blaine Hill also noted the impact that Denco II has on the local community. Hill said the plant helps create jobs in the community and offers other benefits and support for local producers.
"Our county, this area, is doing very, very well in the overall scope of the economy," said Hill. "The future looks really bright, but this is a very important thing to the community.
Denco II has also partnered with local gas retailers to build the local market for E85, a fuel mixture that is 85 percent ethanol and 15 percent gasoline. Miller said that despite misinformation distributed by big oil companies, E85 is safe for and effective for vehicles.
The plant devotes about 10 percent of their production to direct sales of E85 to about 45 gas stations in the region. Thirteen of those stations close to the plant are part of a price promotion program that started in 2013. Those stations receive the ethanol at a discount from Denco II, then sell it to customers for $1 less than regular E10 fuel.
Miller said vehicles using E85 do show about 30 percent reduction in miles per gallon, but if E85 is priced competitively consumers will see a savings.
"Traditionally, they say if you're saving 30 percent at the pump, you're better off using E85," said Miller.
Read the original story here : Local Business Leaders Share Story Of Ethanol With Legislators
March 27, 2015
WASHINGTON — Science Magazine has published yet another study from environmental activist and attorney Timothy Searchinger today that re-packages his already disproven theory of food vs. fuel. His assertions about the impact of biofuels on food markets run counter to the facts on the ground and have been debunked time and time again. The Renewable Fuels Association (RFA) once again exposes the holes in Searchinger’s theory as Bob Dinneen, president and CEO of the RFA, released the following statement:
“Economic models are one thing — reality is another. Data from the last decade clearly show that feed grains (like corn) used to produce meat have not been ‘diverted’ away from animal feed markets to make biofuels. In fact, even after accounting for the grain used for ethanol, more grain is available for feed and food use today than at any time in history. If biofuels were truly diverting grain away from food and feed production and causing scarcity, we would expect to see food prices rising abnormally — but this clearly isn’t happening. The United Nations food price index is at its lowest point since the global recession in 2009, and in real terms today’s food prices are lower than in the 1960s and 1970s.
“What’s more, the UN says per capita food supply and protein supply are both at record levels globally — in other words, there is more food available per person today than ever before. Global hunger has fallen 21 percent since 1992 and undernourishment is also at all-time lows, according to the UN. Indeed, ‘scarcity’ isn’t the problem facing the world’s undernourished and hungry — rather, the incredulous amount of food wasted is the largest nutrition-related challenge facing our world. The UN shows that ‘roughly one-third of food produced for human consumption is lost or wasted globally, which amounts to about 1.3 billion tons per year.’ For context, that amount of wasted food is almost equivalent to the global supply of coarse grains (corn, oats, barley, sorghum, rye, and millet). Or, in other words, the amount of food wasted is 15 times larger than the net amount of feed grains used by the U.S. ethanol industry.
“Let’s not forget that ethanol producers make both fuel and feed. Only the starch in the grain feedstock is converted to ethanol, while 100 percent of protein, fat, and fiber remain available to the feed market in the form of distillers grains or other co-products. The world wants more protein — not more carbohydrates — and using grain for ethanol has absolutely no impact on global protein supplies.”
Read the original story here : Economic Models Are One Thing - Reality Is Another
The Washington Post With Bloomberg
March 24, 2015
By Mario Parker
The Environmental Protection Agency moved Tuesday to gather output data from cellulosic ethanol producers to help it determine the consumption targets. That form of the biofuel is produced from non-edible sources, compared with first-generation grain-based ethanol.
EPA’s request for the data comes as it’s more than 15 months behind a statutory deadline to issue requirements under the Renewable Fuels Standard for how much biofuels refiners should have used in 2014, and four months late in releasing targets for this year.
“At a minimum, that could portend delays to the finalization of cellulosic targets,” Timothy Cheung, vice president and research analyst a ClearView Energy Partners LLC, a Washington-based policy analytical firm, wrote in a note Tuesday.
Biofuel and petroleum interests have battled on whether the 2007 energy law is tenable.
Last November, EPA decided to put off setting 2014 quotas, saying it would issue rules for last year, 2015 and 2016, this year.
In February, EPA Administrator Gina McCarthy said the rules would be issued “very soon.”
Public Comments
Today’s notice asks for public comments on the possible request to collect information from the cellulosic producers. The responses are due by May 26, leaving a scarce amount of time for the agency to meet its “self-imposed June 20 deadline to propose the multiyear RFS package,” Cheung wrote.
“This does not impact the volume rule in terms of timing, numbers or policy,” EPA said in an e-mailed statement. “It is simply a step to stay in compliance with the paperwork reduction act.”
Compliance with the standard is tracked by Renewable Identification Numbers, or RINs, certificates attached to each gallon of biofuel. Once a refiner blends biofuel into petroleum, they can keep the RINs or trade them to another party.
Advanced biofuel RINs for 2015 jumped 2 percent to 75.5 cents, while 2015 corn-based ethanol RINs increased 1.1 percent to 67.25 cents, according to data compiled by Bloomberg.
In deciding the consumption mandates, EPA is likely to align 2014’s requirement with how much biofuel refiners used and base 2015 and 2016 on gasoline consumption and biofuel production, Aakash Doshi, an analyst at Citigroup Inc. in New York, said in a report earlier this month.
Read the original story here : EPA Request For Biofuel Data Signals Renewable Fuel Delays
March 24, 2015
By Robert White
RFA talks with thousands of fuel retailers at petroleum marketer meetings, conferences, webinars, and one-on-one meetings. Over the course of these meetings it quickly becomes clear that every decision made by fuel retailers is based on return on investment (ROI) and the outcome of every decision is compounded exponentially for the 60% that are single station owners. Today, nearly all of these stations offer premium fuel, but should they?
Until this year, the business case for E15 hinged on what vehicles the EPA had approved: 2001 & newer light duty cars, trucks and SUVs. These vehicles tally over 203 million, or 83% of the U.S. fleet. That is more than enough to justify the infrastructure to support them. But that has not happened and we must ask why not. The reason most often given is that while the Environmental Protection Agency (EPA) has approved the use of E15 in these vehicles, the auto manufacturers have not.
So what do the facts say? RFA recently found that 70% of MY15 vehicles are explicitly warranted for E15 — a trend that has been moving upward since MY12. So, just how many vehicles are now explicitly warranted for E15? More than 41 million! Add to that the 18 million FFVs that are also approved for E15, and there are 59 million E15 warranted cars on the road today. For comparison, there are just 15 million cars requiring premium gas today. But, no high performance automobile owner has trouble finding premium fuel!
Here is the breakdown:
- ~ 244,000,000 light duty vehicles on the road today
- ~ 15,000,000 require premium fuel
- ~ 203,000,000 are 2001 & newer and approved by EPA to use E15
- ~ 41,000,000 are explicitly warranted for E15
- ~18,000,000 are FFVs (also warranted for E15)
- ~ 41,000,000vehicles are 2000 & older
The fact that there are four times as many vehicles fully warranted for the use of E15 than those requiring premium gas today should be a compelling consideration for retailers considering the switch to E15 and E85. Many retailers are shocked to find that they are dedicating an entire fuel tank to premium fuel, which allows them to service fewer vehicles than if they sold E15 and E85. If retailers would consider converting their premium tank to E85 and installing a blender pump to allow for E15, they would gain both segments from one existing underground storage tank. The potential consumer fleet would jump from just 15 million vehicles to 59 million vehicles. Moreover, premium sales have been dropping. Most retailers will concede that premium sales are between 1–4% of their total volume, while stations making the conversion to E85 — and adding E15 — have demonstrated that they can turn that 1–4% into 20–30%.
The business case for higher blends of ethanol is actually quite simple. If retailers want to differentiate themselves, lower their consumer price at the pump, increase their overall fuel volumes, boost their in store sales, and ultimately increase their profits … premium might not be the wisest fuel choice. Success will come in the form of higher-level ethanol blends.
Read the original story here : Should Premium Fuel Still Warrant A Tank?
RFA talks with thousands of fuel retailers at petroleum marketer meetings, conferences, webinars, and one-on-one meetings. Over the course of these meetings it quickly becomes clear that every decision made by fuel retailers is based on return on investment (ROI) and the outcome of every decision is compounded exponentially for the 60% that are single station owners. Today, nearly all of these stations offer premium fuel, but should they?
Until this year, the business case for E15 hinged on what vehicles the EPA had approved: 2001 & newer light duty cars, trucks and SUVs. These vehicles tally over 203 million, or 83% of the U.S. fleet. That is more than enough to justify the infrastructure to support them. But that has not happened and we must ask why not. The reason most often given is that while the Environmental Protection Agency (EPA) has approved the use of E15 in these vehicles, the auto manufacturers have not.
So what do the facts say? RFA recently found that 70% of MY15 vehicles are explicitly warranted for E15 — a trend that has been moving upward since MY12. So, just how many vehicles are now explicitly warranted for E15? More than 41 million! Add to that the 18 million FFVs that are also approved for E15, and there are 59 million E15 warranted cars on the road today. For comparison, there are just 15 million cars requiring premium gas today. But, no high performance automobile owner has trouble finding premium fuel!
- See more at: http://www.ethanolrfa.org/exchange/entry/should-premium-fuel-still-warrant-a-tank/#sthash.Va5dzaeo.dpufMore...
This month, we spotlight Christianson & Associates, PLLP. We spoke to John Christianson, the founding partner at Christianson & Associates, about the firm’s history and its involvement with the ethanol industry.
John Christianson, founding partner
Please tell us about Christianson & Associates.
Christianson & Associates, PLLP (C&A) is a full service Certified Public Accounting firm established over 28 years ago, with offices in Willmar and Litchfield, MN. C&A has deep roots in the agricultural industry; the partners and many of the staff have farming backgrounds. Our clients include ag producers, cooperatives, ag elevators, ag supply companies, feed mills, ag processing, and renewable energy.
With a strong tradition of client service for the ag industry, C&A has grown by developing services and products based upon the needs of these clients. With over 50 staff members, C&A is ready to meet ag industry needs such as forecasting, development-stage accounting services, unique tax planning strategies, auditing, RIN consulting and attestation services, and other consulting services including performance analysis and government grant writing and consulting.
The firm has developed deep expertise in the EPA and regulator reporting for producers. C&A has had the opportunity to develop the Biofuels Benchmarking service, which is a confidential analytical tool and provides over 65 ethanol production facilities a means by which to compare themselves to their peers in the industry and query unique groups or time periods to run additional reports and graphs. The firm has also funded the development of a commodity processing software, “Intellego,” which is integrated with Microsoft Dynamic GP. Over 75 plants operate on the C&A platform which gives them maximum flexibility to monitor their operational and financial activity through a multitude or reports.
Please tell us about Christianson & Associates’ role within the ethanol industry in Minnesota and why the company is committed to supporting the ethanol industry now and in the future?
C&A has been fortunate to be involved from the early stages of the development and growth of the ethanol industry. Working with the early industry leaders and trade organizations for over 20 years, the firm had the opportunity to work on changing federal legislation related to tax credits in the ethanol industry. C&A has been committed to providing unique solutions for our clients to solve their needs. The deep roots of our ag backgrounds are demonstrated by our commitment to the ethanol industry. We support the industry through the trade organizations and support and participate in the industry events. Our goals is to be the financial resource to the industry with our products, services, and expertise.
From your perspective, what would you like consumers to know about the ethanol industry and the fuel it produces?
Consumers need to understand a number of things about ethanol:
1. Ethanol is not subsidized by the government like petroleum.
2. Ethanol will not cause our young men and women to be sent to war in the Middle East.
3. Ethanol is the cheapest octane in the market.
4. Ethanol reduces the price of gasoline for the consumer.
5. Ethanol is clean and reduces GHG emissions.
6. Ethanol improves our energy security by reducing oil imports required.
7. Ethanol creates jobs in rural areas where jobs are scarce.
8. The ethanol industry produces fuel and food.
What do you think is needed for the availability of E15 to grow?
For E15 to grow, consumers need to be educated and understand the impact ethanol has on the economy and environment. The work the industry is doing by developing the blender pump build-out will need to continue and expand. Ultimately the ethanol industry will need access to the market to allow the consumer to choose. Members of the industry are confident that consumers will choose ethanol if they are educated and have access to the consumer choice of fuel blends.
What do you see as the ethanol industry’s biggest challenge?
The biggest challenge the industry faces is market demand. We must have demand for ethanol in order for the industry to grow. Demand will be created by consumer education and access to the market. The blender pump build-out within the retail petroleum market is critical for access to the motor fuel market to be obtained. Maintaining the status of the Renewable Fuels Standard II is important for short-term demand. Long-term, ethanol will need to be sold as a less expensive high-quality octane source.
What does your company see for the future of ethanol and advanced biofuels?
C&A hopes to assist the industry to grow beyond the E10 market. We see the ethanol market evolving to higher blends beginning with E15 and eventually beyond. In addition to higher blends in the market, the ethanol plants will continue to evolve into biorefineries that produce a wide range of renewable fuel and food products. Many producers will have components of advanced biofuels as part of their product mix in the future. I sincerely hope the ethanol industry will grow beyond the E10 levels we are producing now for the benefit of our country, economy, and future generations.
March 17, 2015
By Erin Voegele
Legislation pending in Minnesota aims to establish state production incentives for advanced biofuels, renewable chemicals and biomass thermal. The measure was introduced in the Minnesota House of Representatives and the Minnesota Senate in early February.
The House version of the bill, H.F. 536, was introduced on Feb. 2 by Reps. Rod Hamilton, Jeanne Poppe, Paul Anderson, Jason Metsa, Ron Kresha, and Bob Gunther. Reps. Bud Nornes and Debra Kiel later signed on to support the measure. The Senate version of the bill, S.F. 517, was also introduced on Feb. 2 by Sens. Tom Saxhaug, David Tomassoni, Julie Rosen, and Bill Weber. Sen. Scott Dibble later signed on to support the legislation.
According to the text of H.F. 536, the bill would create an incentive $2.1053 per MMBtu of annual production of cellulosic advanced biofuels. For advanced biofuel produced from sugar or starch, the incentive would be $1.053 per MMBtu of annual production. The incentive would be available to eligible producers for 10 years after the start of production at a specific location. Eligible facilities producing advanced biofuel using agricultural cellulosic biomass would be eligible for a 20 percent bonus payment for each MMBtu produced from agricultural biomass derived from perennial crops, or from farms where cover crops are used. Total payments for an individual producer would be capped at 2,850,000 MMBtu per year, with the cap for total payments made under the program set at 17,100,000 MMBtu annually.
The legislation indicates the advanced biofuel production incentive would be available for eligible facilities that source at least 80 percent raw materials from Minnesota. If a facility is sited within 50 miles of the state boarder, raw materials may be sourced from a 100-mile radius. The bill specifies the raw materials must be from agricultural or forestry sources, or from solid waste. Eligible facilities must be located within Minnesota and begin production at a specific facility by June 30, 2025, but must not begin above 95,000 MMBtu of annual biofuel production before July 1, 2015. The bill also notes eligible facilities can include existing companies and facilities that add additional advanced biofuel production, as well as new companies and facilities. The advanced biofuel facilities, however, must produce at least 95,000 MMBtu per year to be eligible. The incentive would not be available for conventional corn ethanol or conventional biodiesel.
Eligible advanced biofuel producers that utilize cellulosic biomass would be required to submit a responsible biomass sourcing plan to the Minnesota commissioner of agriculture prior to applying for the production incentive. The plan would include a detailed assessment of how the agricultural cellulosic biomass would be produced and managed and include the producer’s approach to verifying that biomass suppliers are following the plan. It would also discuss how the producer will encourage continuous improvement during the life of the project and include specific goals and timelines for making progress. An annual report would also be submitted that includes data on progress being made to meet plan goals.
According to the legislation, many of the facility location and biomass-sourcing requirements would be the same for the renewable chemical production incentive and the advanced biofuel incentive. To be eligible, renewable chemical facilities must produce at least 3 million pounds per year. In addition, renewable chemicals produced through processes that were fully commercial before Jan. 1, 2000 would not be eligible. The renewable chemical production incentive would be 3 cents per pound of sugar-derived renewable chemical, 3 cents per pound of cellulosic sugar, and 6 cents per pound of cellulosic-derived renewable chemical. The incentive would be available to a particular facility for 10 years after the start of production. An eligible facility producing renewable chemicals from agricultural cellulosic biomass would be eligible for a 20 percent bonus payment for each MMBtu produced from agricultural biomass that is derived from perennial crops or from acres where cover crops are used. Eligible producers who utilize agricultural cellulosic biomass would also be required to submit a responsible biomass sourcing plan. Total renewable incentive payments would be capped at 99,999,999 pounds for an eligible producer on an annual basis, and 599,999,999 pounds per year for the entire incentive program.
The biomass thermal incentive would have facility and feedstock requirements similar to the other two incentives. To be eligible, facilities would be required to produce at least 1,000 MMBtu per year. The amount of the incentive would be $5 per MMBtu of biomass thermal production produced at a specific location for 10 years after the start of production. Eligible facilities using agricultural biomass would be eligible for a 20 percent bonus payment for each MMBtu produced from agricultural biomass that is derived from perennial crops or from acres where cover crops are used. Eligible producers who utilize agricultural cellulosic biomass would be required to submit a responsible biomass sourcing plan to the Minnesota agricultural commissioner. Total payments to an eligible thermal producer would be capped at 30,000 MMBtu per year, with the total incentive for all eligible producers capped at 150,000 MMBtu annually. While eligible facilities can blend cellulosic feedstock with other fuels in the production facility, only the percentage attributable to cellulosic material listed would be eligible to receive the producer payment.
The bill appropriates $2.5 million in fiscal year 2016 to the program, along with $2.5 million in fiscal year 2017.
A full copy of H.F. 536, along with a link to the companion Senate bill, is available on the Minnesota Legislature website.
Read the original story here : Minnesota Bill Aims To Create Cellulosic Biomass Incentives
March 16, 2015
Odometers are not standard equipment on the race cars competing in NASCAR but if they were, collectively they surpassed a momentous milestone over the weekend at Phoenix International Raceway. NASCAR began running Sunoco Green E15 in its three top national series back in 2011 and Saturday during the NASCAR XFINITY Series Axalta Faster. Tougher. Brighter. 200 race, NASCAR hit and surpassed 7 million miles of racing, the equivalent of almost 30 trips from the earth to the moon or 281 laps around the earth!
NASCAR made the fuel change in conjunction with their NASCAR Green® Platform, the largest and most comprehensive recycling, tree planting and renewable energy programs in sports. Not only has the move to Sunoco Green E15 proven to be an environmentally beneficial decision, it’s actually boosted the performance of the race cars in all three national series – lowering emissions and increasing horsepower.
“From our initial seamless transition to Sunoco Green E15, a 15 percent American-grown, American-made ethanol racing fuel blend in Daytona in 2011 to 7 million miles reached here at Phoenix International Raceway, NASCAR has shown under the most demanding competition that E15 is safe, reliable and it works,” said Dr. Michael Lynch, Vice President, NASCAR Green Innovation and STEM Platforms. “NASCAR fans are 80 percent more likely than non-fans to support the use of ethanol blends in their own car on the street, because they understand that NASCAR and our diligent race teams did our homework from the start with thousands of miles and hours of testing.”
“NASCAR validates what a great performance fuel [E15] is,” said Tom Buis, CEO of Growth Energy. “If you meet with the teams and talk with the owners, they have noticed only increased horsepower, higher performance, and reduced emissions without a single issue when it comes to durability and dependability.” Buis added, “This partnership has been critical in showing the American consumer that if E15 performs in the most rigorous and demanding situations in motorsports, it’s clearly a safe, high performance reliable fuel that is good for American consumers who want a choice and savings at the pump.”
“Thanks to countless miles of testing, research and collaboration with NASCAR, we were prepared to run Sunoco Green E15, a 15 percent ethanol fuel in our race cars and the transition was flawless,” said Richard Childress, Chairman and CEO of Richard Childress Racing. “We didn’t listen to the negative rhetoric about this, we did our own homework and testing and the switching of fuels has gone fantastic. It has also been very welcomed throughout NASCAR. Since this change took place, we have seen increased horsepower from a higher-octane ethanol fuel blend and decreased emissions. In our own internal tests at RCR, we used ethanol blends up to E30 and found no issues with that fuel, either. If you need any further proof, look no further than the 7 million miles NASCAR is about to complete.”
“Drivers across the United States have a long and successful history with 10 percent ethanol blended fuel,” said Jon Holzfaster, a farmer from Nebraska and National Corn Growers Association Board member. “Frankly, they like the cost savings provided by ethanol and the fact it comes from family farmers. Automotive technology has changed and so have the needs of the public. Cars made since 2001 are designed to run on E15 and NASCAR has proven to be a great way to grow consumer awareness as E15 availability grows.”
Learn more about American Ethanol here.
March 11, 2015
By Erin Voegele
On March 11, Fuels America hosted a media event featuring leaders in the U.S. ethanol industry preemptively responding to a call from the American Petroleum Institute, the Environmental Working Group and ActionAid to repeal the corn ethanol portion of the renewable fuels standard (RFS).
During a joint press event, the API, EWG and ActionAid repeated previously-debunked claims that the RFS will harm consumers and the economy, drive up food prices, and that higher ethanol blends will damage cars.
Tom Buis, CEO of Growth Energy, opened the Fuels America event stressing the API, EWG and ActionAid were repeating the same old misinformation that they’ve publicized before. "We are here to tell you the ethanol industry continues to innovate, get cheaper and cleaner, and increase America’s energy security, while creating jobs and benefiting the environment and consumers at the pump," he said.
Buis noted that at the recent Iowa Ag Summit, six out of nine republican presidential hopefuls expressed support for the RFS, noting that he thinks more politicians see the misinformation that Big Oil is dishing out.
Rob Elliott, first vice president of the National Corn Growers Association, spoke about the myth of food versus fuel, noting that research has shown that energy, transportation, marketing and packaging drive food price increases much more than raw materials costs. “There is about a dime’s worth of corn in a $4 box of corn flakes, which kind of tells that tale,” he said. Elliott also noted that corn prices are currently below the cost of production, and stressed that falling corn prices have not translated into lower food prices.
In addition, Elliott addressed the myth of crop expansion, noting that the law that establishes the RFS prohibits crop land expansion beyond 2007 levels. He also indicated that U.S. crop land has actually trended downward since the RFS was implemented, at the same time biofuel production has increased.
He also stressed that the RFS caps the amount of corn ethanol that can qualify for the program at about 15 billion gallons. The industry is already operating at an annualized rate of approximately 14.7 billion gallons, so the cap is essentially been reached. “There will be no massive expansion of first generation biofuels in the U.S.,” he said, noting that future increases in RFS requirements are likely to be met with biofuels manufactured from cellulosic and waste-based feedstocks.
Finally, Elliott noted that even with the RFS, more grain is available today worldwide for food than has been at any point in history. “We’ll actually finish this marketing year with huge piles of corn left over as we move into the 2015 harvest,” he said.
Adam Monroe, president of Novozymes America, spoke about the investments his company has made in both the first-generation and second-generation biofuel sectors as a result of the RFS. Regarding cellulosic production, Monroe noted the price of enzymes has dropped by 90 percent when compared to prices just a few years ago. He also spoke about progress with first-generation technologies, noting his company has spent a lot of investment, time and effort to improve the sustainability and efficiency of grain-ethanol production. As a result of these improvements, a typical ethanol plant can produce the same amount of ethanol annually with 22,000 tons less corn. “We’ve invested more than $500 million into North America,” Monroe said, noting Novozymes plans to spend hundreds of millions more, as long as biofuel policy continues.
According to Monroe, the RFS has driven a lot of private sector investment. However, if Congress or President Obama give in to oil lobby efforts to weaken the RFS, that investment could go away. He added that the ongoing argument over policy also helps weaken the investor community. This is no doubt a tactic to try to create uncertainty in the biofuels space, he said, adding that efforts to dismantle the RFS make it difficult to attract new investors into the advanced biofuel space.
Bob Dinneen, president and CEO of the Renewable Fuels Association, also stressed there will be no massive U.S. expansion of corn-ethanol production. “The [RFS] is designed specifically to drive investments in new technologies, using new feedstocks,” he said.
Dinneen encouraged those on the Fuels America call to question the API, EWG and ActionAid on how they’d explain the fact that the price of corn has dropped since the RFS was passed, that two of the lowest food price inflation rates of the past 50 years have occurred over the past six years, and that the UN acknowledges that hunger worldwide has fallen. He also noted the dead zone in the gulf has shrunk while the RFS has been in pace due to more efficient farming practices, and that U.S. forest area has actually increased. “Their doomsday scenarios make no sense, and people just need to question and reflect what they say against what is actually happening,” Dinneen said.
Read the original story here : Fuels America Responds To Anti-RFS Claims From API, Others
March 11, 2015
By Cindy Zimmerman
Holding a press conference in advance of the American Petroleum Institute continuing its call to weaken the Renewable Fuel Standard (RFS), representatives of the ethanol and advanced biofuels industry and corn growers defended the law and the fuel.
Growth Energy CEO Tom Buis said the oil industry is making the same old arguments about ethanol that are simply not true, but he thinks the industry received a good boost over the weekend “when six out of nine of the Republican presidential candidates that came to the Ag Summit expressed support for the RFS.”
National Corn Growers Association (NCGA) first vice president Rob Elliott of Illinois talked about how the facts dispel the perpetual myths about food versus fuel. “Corn prices are now below cost of production … so obviously food prices have not followed a similar path,” he said.
Adam Monroe, president of advanced biofuels producer Novozymes, said if Washington gives in to pressure by the oil industry to weaken the RFS it will keep second generation biofuels from going forward. “It makes it tremendously difficult for us to bring in new investors and spend more money,” he said.
Renewable Fuels Association president Bob Dinneen says no matter what ethanol critics say, there is now real world data that shows no detrimental effects have occurred as a result of the RFS and he encouraged reporters to question API. “Ask them to explain the fact that the price of corn is lower than it was when the RFS was passed,” he said, noting also that food price inflation has been lower, the dead zone has gotten smaller, and hunger worldwide has fallen.
Read the original story here: Biofuels Leaders Defend RFS
March 10, 2015
By Erin Voegele
The U.S. Energy Information Administration has published the March issue of its Short-Term Energy Outlook, increasing its forecasts for both 2015 and 2016 ethanol production.
According to the EIA, ethanol production hit a new record monthly average of 1.002 million barrels per day in December 2014, with production in February estimated to have fallen to an average of 948,000 barrels per day. Ethanol production averaged 935,000 barrels per day last year.
The EIA currently predicts ethanol production will average 947,000 barrels per day this year, up from a forecast of 938,000 barrels per day made in the February STEO. In 2016, ethanol production is expected to drop slightly, averaging 942,000 barrels per day, up from the 936,000 barrel per day estimated included in the February STEO.
Biodiesel production averaged an estimated 93,000 barrels per day in 2014 and is expected to average 84,000 barrels per day this year and next year.
According to the EIA, average U.S. gasoline retail prices increased for the sixth consecutive week, from $2.04 per gallon on Jan. 26 to $2.49 per gallon on March 9. In the STEO, the EIA said the increase reflects rising crude oil prices and several outages at West Coast refineries. Gasoline retail prices, which averaged $3.36 per gallon last year, are expected to average $2.39 per gallon this year, up 5 cents per gallon when compared to the forecast made in the February STEO. In 2016, gasoline prices are expected to increase, averaging $2.73 per gallon.
The EIA’s most recent weekly ethanol production data shows production averaged 931,000 barrels per day for the week ending Feb. 27, down slightly from an average of 947,000 barrels per day for the week ending Feb. 20. The most recent monthly import and export data indicates the U.S. imported 292,000 barrels of ethanol in December, with 285,000 barrels of that volume imported from Brazil. Only 33,000 barrels were imported in November. The U.S. exported nearly 1.8 million barrels of ethanol in December, down from nearly 2.17 billion barrels in November. Top export destinations in December included 630,000 barrels to Canada, 414,000 barrels to Brazil, and 251,000 barrels to the Philippines.
Read the original story here : EIA Increases 2015, 2016 Ethanol Production Forecasts
March 7, 2015
By Jon Ward
DES MOINES, Iowa — The political operative, a man named Monte Shaw, pointed to the poured concrete floor and drew an imaginary box that he said Jeb Bush was standing in, metaphorically speaking.
“I thought Bush was fine. Right now we have him in the pro [Renewable Fuel Standard] box,” Shaw, executive director of the Iowa Renewable Fuels Association, said. “What I heard was, ‘Hey, I'm gonna keep it in place.’”
This was the sort of conversation that took place in an assembly hall at the Iowa State Fairgrounds here on Saturday after Bush made his first onstage appearance as a likely presidential candidate in the state, whose caucuses in 2016 will kick off primary balloting.
The event was unprecedented in the state’s political history: Nine potential presidential candidates, including Bush, trekked to Iowa specifically to sit on a stage and answer questions not from a journalist, but from businessman Bruce Rastetter, a “pork and ethanol giant” who has become a political player in the state over the past several years. Iowa political observers said they’d never seen anything quite like it.
Rastetter asked the same set of questions, with a few variations, to each potential candidate at the 2015 Iowa Ag Summit. At the top of his priority list was to get each politician on record, in Iowa, on where they stand on the Renewable Fuel Standard, which was created in 2005 and requires each gallon of transportation fuel sold in the U.S. to include 10 percent renewable fuels, with a certain percentage of that being ethanol, a corn-based fuel that’s crucial to Iowa’s economy.
“Iowa has largely missed out on this last recession because of the success of our renewable energy sector,” said Ron Heck, past president of the Iowa Soybean Association.
Bill Couser, co-chairman of America’s Renewable Future, the group organizing the event, bluntly laid out the agriculture sector’s calculus heading into the event Saturday. Their “challenge” for potential candidates, he said, was, “You support us, we’ll support you.”
Most of the possible candidates fell into one of two camps. They were for the RFS, with two exceptions. Former Texas Gov. Rick Perry and Sen. Ted Cruz (R-Texas) have stated in the past that they favor ending the RFS and did not veer from that position onstage with Rastetter. In response, ARF sent out a press release while the event was still going slapping Perry and Cruz down in sharply worded language.
“Cruz, Perry Need Education on Renewable Fuel, While Other Leading Candidates Support Renewable Fuel Standard,” the group said.
New Jersey Gov. Chris Christie was unequivocal in his rhetoric on the RFS, a response certain to please the organizers. “The law requires it,” he said.
Wisconsin Gov. Scott Walker, who currently leads in Iowa polls, reversed his position on the issue. In the past he has expressed opposition to ethanol subsidies, but on Saturday he said that because ethanol does not have full access to the fuel market, the RFS should be continued for now. “It’s something I’m willing to go forward on continuing a Renewable Fuel Standard,” Walker said. He said it should be phased out at some point in the future, but did not specify when.
However, after Bush sat down with Rastetter, listeners were left debating what he’d actually said.
Bush said that the RFS “has worked, for sure” and “has been a benefit” because it has “reduced our dependence on foreign oil.” But he also gave a nod to the more conservative elements of the GOP who oppose government support for industry and corporations.
“I would suggest to you that ultimately, whether it’s ethanol or any other alternative fuel, renewable or otherwise, the markets ultimately are going to decide this,” Bush said. “At some point we’ll see a reduction of the RFS need because ethanol will be such a valuable part of the energy piece of our country. Whether that’s 2022 or sometime in the future I don’t know.”
That sounded like a knock on the RFS. But Couser, Shaw and other renewable fuel advocates noted that the law actually requires the phasing out of the RFS in 2022.
Immediately after Bush finished speaking, Craig Robinson, a widely read conservative blogger who runs the Iowa Republican website, said he thought Bush was coming down ever so slightly against the RFS in a play for hardcore conservatives.
“Bush didn’t come out and say that he outright opposed the Renewable Fuel Standard and wind tax credit, but he didn’t embrace them either. Bush essentially took a similar position to Senators Ted Cruz and Rand Paul by saying that ultimately the market should decide,” Robinson wrote in an e-mail.
Robinson thought this might be an attempt to win over conservatives who are unhappy with Bush’s moderation on immigration and education, a move with dubious prospect for success and one that could hurt him in a general election, when voters in both parties will want federal support for Iowa’s economy.
But the renewable fuel and ethanol advocates said they were generally happy about Bush’s appearance, though they wanted to get more clarification.
“He's doing a little bit of dancing,” Shaw said. “Bush was pretty good, but we probably need to clarify just to make sure we heard what we thought we did.”
Couser said he wanted to follow up with Bush as well. “I'm anxious to sit down with him. ... I would really like to get a definite answer. He kind of sidestepped it."
Another ARF adviser, who asked not to be named, put it more bluntly: “We felt pretty good about it,” he said of Bush’s comments.
An Iowa Farm Bureau official added that Bush’s comments “keep him in the wheelhouse, keep him in the game.”
Bush’s first trip here to the Hawkeye State included a fundraiser Friday night with first-term congressman David Young, a Republican from southwest Iowa; a private meeting with volunteers and activists at a barbecue restaurant in West Des Moines; and a meet and greet with voters at a Pizza Ranch in Cedar Rapids, two hours east of Des Moines.
Another question that Rastetter asked each candidate was about genetically modified crops and whether food manufacturers should be required to label food that is modified. A group of protesters outside the event in the morning held signs demanding that such a requirement be passed into law. To a man, each Republican said they were opposed to requiring labeling.
But some, including Bush, said they were in favor of requiring that food be labeled with its country of origin. When he and his family make guacamole at home, Bush said, “I want to know where that avocado is from.”
Read the original story here : Jeb Bush Remarks On Ethanol Have Iowans Reading Tea Leaves
March 6, 2015
By Bobby Likis, President of Car Clinic
Jay Leno is a car guy … and someone I’ve respected for many years. But Jay’s AutoWeek article “Can’t We Just Get Rid Of Ethanol?” makes zero sense to me.
I’m a car guy too. Restored and own a classic 1980 Weisssach Porsche 911. Auto service shop owner for 44 years with over 200,000 vehicles (from classics to hybrids) rolling through the bays. Engine builder. Car-talk host answering more than 100,000 car questions live on radio, television, web and social media.
What I read in the “Rid” article does not sound like Jay Leno, the car guy. Oddly enough, not too long ago at SEMA, Mr. Leno was touting E85 and other ethanol-blends of gasoline with his Z06 ‘Vette. Now, for whatever unknown reason, he’s slamming ethanol. I cannot believe “what Jay said” is “what Jay really believes.” His words smack of otherwise invested horse-whisperers who use personal agendas to sway vulnerable-for-whatever-reason people towards their way.
So as a car guy, allow me to share a few ethanol facts with you.
1) Water absorption: No doubt that ethanol emulsifies and holds water. Yay!! That’s a good thing! In fact, “holding” / suspending /emulsifying water is an ethanol ASSET — not detriment — as gas tanks actually run dryer after the transition from E0 to E10. Mercury Marine — the boat engine manufacturer — states this fact. Specifically with regard to moisture, a gallon of ethanol suspends FOUR (4) TEASPOONS of water per gallon of fuel before phase separation. On the other hand, gasoline suspends only POINT ONE FIVE (.15) TEASPOON (that’s LESS than ONE teaspoon) of water per gallon before phase separation. So PHASE SEPARATION WILL OCCUR 26 TIMES MORE RAPIDLY WITH GASOLINE THAN WITH ETHANOL! This has been demonstrated hundreds of times (including one demonstration I recently saw by Dr. Andrew Randolph, technical director of Earnhardt-Childress Racing), clearly substantiating that gasoline does NOT effectively hold (suspend) water. So with straight gasoline, whatever water is in any tank or atmosphere “phase separates” and falls to the bottom of the tank. In contrast in ethanol-blended fuel, the ethanol will suspend that water during the driving of the vehicle; then, harmlessly carry it through the system to be vaporized by the engine without affecting the engine in the least. The suspended water, vaporized by the engine, produces NO harmful emissions. And one more point: at 70 degrees Fahrenheit and 70 percent relative humidity, it takes more than two months for even gasoline to absorb water. Since ethanol has 26 times the suspension capability of gasoline, it would take literally months and months before any phase separation could possibly take place. I can state categorically that I own a Classic 1980 Limited Edition Weissach Porsche 911 and have driven it three times in the past three years … to buy fresh gas. I start this vehicle (about every three months) and let it run for no less than ½ hour to circulate the E10 gas.
2) Increased car fires over past three decades: Totally spoken out of context. GM recalled nearly 1.5 million cars as a result of rocker covers leaking oil. Maybe the next article should be “Why Can’t We Remove Oil From All Engines?” Leaking fuel lines allow fuel to hit hot engines and ka-blooooie … really? I’ve operated my own bumper-to-bumper full service automotive repair and service shop for 44 years and had more than 200,000 cars and small trucks come through our doors and not one has ever had an engine damaged by ethanol much less a fire.
3) “The worse can happen”: Not according to studies/research. Hagerty Insurance — you know, THE classic car insurance company — funded a study by Kettering University (known for its reputation in the field of automotive research) on the use of E10 in older cars. Wouldn’t you think if E10 caused damage in the collector cars that Hagerty insures that Hagerty would be the first to say, “Can’t We Just Get Rid of Ethanol?” Instead, after 1,500 hours of testing with E0 (0 percent ethanol) and E10 (10 percent ethanol), general consensus was that “with minor updates and proper maintenance, E10 will not negatively affect your old car or truck.” Ah, the voice of reason … and research. For more reason and research, check out the Renewable Fuels Association’s detailed and facts-forward guide for classic car owners (“Gasoline Ethanol Blends in the Classic Auto”).
4) Renewable Fuel Standard: My head is still spinning with the totally out of context references to ethanol in classic cars, but Mr. Leno’s reflections on the Renewable Fuel Standard should be titled “Can’t We Simply Continue America’s 100+ Year Dependence On Foreign Oil?” Unthinkable. Tossing the Renewable Fuel Standard not only ensures we remain dependent on foreign oil, but also such actions literally cause would-be investors to pause and reconsider their potential investments in our nation’s renewable energy opportunities.
With all due respect for the beautiful, treasured classics in garages and at car shows, let’s clear the smoke about any conclusion — even dead-wrong ones — about E10 in classic cars. How about refocusing on the other 260,000,000 light (non-commercial) vehicles on U.S. roads today? The average age is about 11½ years. So most of us drive cars made in this millennium … not made in the ‘70s or before. “Why Can’t We Just Get Rid of Steak ‘Cause Babies Can’t Eat It?” would be a nice, scare-tactic, demotivator for auto manufacturers worldwide to design, engineer and manufacture future vehicles that optimize the high-performance, environmentally friendly engines that thrive on high-octane ethanol.
Thank goodness the early 1900s best seller “Why Can’t We Just Get Rid of Cars” — written by the horse breeders — didn’t catch on.
Read the original story here : Can't We Just Get Rid Of Ethanol Ignorance?