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By Tim Rudnicki, Esq.
Why should you care about what’s behind all the hype over “renewable identification numbers” (RINs)? If you buy gasoline for your vehicle, you probably know ethanol displaces dirty and expensive petroleum and serves as an octane booster for the gasoline. While it’s not immediately visible, here in the Midwest, the biofuel ethanol has helped to suppress the price of gasoline by approximately $1.69 per gallon. So where do the RINs come into the picture and why do they matter?
Under the Renewable Fuel Standard (RFS), a federal law, an oil refiner is obligated to demonstrate to the U.S. Environmental Protection Agency each year that the oil refiner has used a certain volume of biofuel like ethanol. A renewable fuel identification number is associated with each gallon of biofuel that is produced and the number goes to an oil refiner when the oil refiner buys the biofuel. With ownership of the biofuel the oil refiner may do three things with the RINs: KEEP to demonstrate compliance, BANK for the following year or SELL on the market.
With these three options, refiners have great flexibility in the marketplace. If an oil refiner is below their renewable volume obligation, the refiner can simply draw from its banked RINs. In this situation, the oil refiner uses its banked RINs to complete its volume obligation rather than actually putting more biofuel into the gasoline market. On the other hand, if the oil refiner failed to use enough biofuel or to bank any RINs, the refiner will need to buy the RINs in the marketplace.
So what happens when oil refiners keep buying their compliance with the law rather than actually providing consumers with more biofuels at the pump? You end up with the current contrived crisis. The feigned crisis is based on claims about scarce RINs, not scarce biofuels, and how scarce RINs might impact the price of gasoline.
Given the long history of the renewable fuel laws, how could this happen? To find out, here is a starter list of questions we should put to big oil:
1. Would you agree this is March 2013? When did you first learn about the Energy Policy Act of 2005? About eight years ago, this law required a growing amount of biofuels be blended with gasoline.
2. Who is responsible in your oil company for complying with the Energy Independence and Security Act of 2007? This Act was signed into law on December 19, 2007, a little over five years ago, is referred to as RFS2 and calls for greater use of biofuels.
3. Tell us what actions your oil company has taken to make E15 available to consumers? Just a reminder, in June 2012 the U.S. Environmental Protection Agency approved the use of E15 in 2001 and newer cars and light duty vehicles on the nation’s highways (approximately 70% of the vehicles).
4. Do you have a problem giving consumers more biofuel choices at the pump? The last time I purchased E15, a premium fuel, it cost about $0.10 less per gallon compared to regular gasoline.
This is not the time to change any renewable fuel law. The laws are working. The part that is not working is big oil. Big oil controls 90% of the gasoline market and they appear to be working to get more. Rather than capitulate to big oil, we need bold leadership at the state and federal level of government to hold the oil companies accountable for complying with the law - the law that requires oil companies to give consumers more biofuel choice at the pump!
Take a look at the balance of Minnesota Bio-Fuels Buzz for a sampling of some important issues in the world of biofuels. As always, if you have questions or comments about what you read in the Buzz, send me a note (This email address is being protected from spambots. You need JavaScript enabled to view it.) or call me (612.924.6495).
By Tim Rudnicki, Esq.
Shortly before Earth Day, the International Energy Agency (IEA) released a report about the progress, or lack thereof, for clean energy production. The substance of the 154 page report is reflected in these words from the IEA Executive Director: “Despite much talk by world leaders, and despite a boom in renewable energy over the last decade, the average unit of energy produced today is basically as dirty as it was 20 years ago." What factors form the basis for this statement? How is the IEA report relevant to biofuel producers and consumers in the U.S. Midwest? Are there any actions we can take to improve the situation?
The IEA is an autonomous entity that was formed in response to the oil crises in the early 1970's. It is comprised of 28 member nations, including the United States, and provides reports to the Clean Energy Ministerial which consists of 23 governments whose nations account for approximately 80% of the total global Greenhouse Gas (GHG) emissions. Among the IEA’s key initiatives is its work to ensure clean energy supplies for its members as well as other nations.
Tracking Clean Energy Progress 2013 (the “Report”) is one tool the IEA relies upon to measure progress in meeting target GHG emission reductions by 2020 and beyond. The reduction numbers are those required to stabilize the climate. While this Report covers a wide range of energy sectors and issues, we limit our focus here to the biofuel portion of the Report.
What does the IEA Executive Director mean by “dirty” energy? In two words, fossil fuels. According to the Report, while progress is being made in developing and deploying clean renewable energy, such as biofuels, the full potential and availability of renewable energy has yet to be realized in the marketplace. Meanwhile, the use of the more carbon intensive fossil fuels, including oil extracted from the tar sands of the Boreal Forest in Canada, are on the rise.
Although the carbon intensity of fossil fuels and the environmental benefits of energy efficiency and renewable energy sources have been known for decades, little substantive progress has been made in reducing carbon emissions over the last 40 years. The total carbon intensity between the 1970's to the present has been reduced by a mere 7% according to the IEA Report. To grasp the magnitude of the situation, contrast the historic progress with the carbon intensity reductions necessary in the future: 6% required by 2020 and 64% by 2050. Report at 8.
Our atmosphere is a global commons since it has no geopolitical boundaries. As energy producers and consumers, we play very important roles in caring for the atmospheric commons. Our individual as well as collective health and well-being are improved by maximizing energy efficiency and using sustainably produced, regenerative renewable energy sources. Biofuels, according to the IEA, is one of those energy sources. In fact, to achieve the target GHG reductions necessary to stabilize the climate, the IEA calls upon biofuel producers to double global production. This can be achieved by deploying advanced biofuel conversion technologies and working to improve efficiency, cost and sustainability of conventional biofuels. Report at 91.
The Producer Members of the Minnesota Bio-Fuels Association (MBA) are part of the solution! Right here, right now, these producers are leaders with respect to process efficiencies. From the field where the renewable ingredients are grown to the fuel dispenser, the life-cycle GHG emissions for the ethanol Minnesota Producers make from corn starch is 48% to 57% less relative to petroleum gasoline. Michael Wang, Well-to-wheels energy use and greenhouse gas emissions of ethanol from corn, sugarcane and cellulosic biomass for US use, December 2012. MBA Producer Members continually seek new opportunities to further improve the thermal efficiency of their operations and reuse storm and wastewater so they can provide consumers with the best environmentally responsible biofuel possible.
While Minnesota biofuel producers are part of the solution to the environmental challenges raised by the IEA, the full availability of biofuels at higher blend levels is still a problem. For instance, Minnesotans know about the environmental and pocket book benefits of “Minnesota Grown Energy - for Today and Tomorrow,” yet they have a difficult time finding the higher octane, lower priced (compared to regular gasoline) E15.
Once E15 is readily available to consumers, they can switch to E15, a higher blend of biofuels with lower GHG emissions, and immediately “green” their 2001 or newer vehicle (no need to buy a new car). How do we turn this situation around so more biofuels, such as E15, are available to consumers?
Here is one solution: the next time you stop for fuel at your favorite gas station, ask for E15. Consumers have the power to immediately decrease GHG emissions as they drive by simply using E15. E15 contains 50% more biofuel having fewer life-cycle GHG emissions compared to petroleum gasoline. Meanwhile, MBA will continue to do its part by working with coalition partners and interested retailers so consumers have more biofuel options at the pump. This concerted effort can help Minnesota consumers immediately reduce GHG emissions when driving and save more money at the pump.
Take a look at the balance of Minnesota Bio-Fuels Buzz for a sampling of some exciting issues in the realm of biofuels. As always, if you have questions or comments about what you read in the Buzz, send me a note (This email address is being protected from spambots. You need JavaScript enabled to view it.) or call me (612.924.6495).
By Tim Rudnicki, Esq.
Historical price charts tell some ugly stories about the average retail price of gasoline. According to GasBuddy.com, the price for a gallon of regular gasoline snapped from approximately $3.48 per gallon to $3.70 in early June 2012. As we follow the data forward to January 2013, we find a steep drop to $2.94 until we are snapped back up to a whooping $4.29 per gallon. Now, during the last few days of May, the gasoline price yo-yo is dropping back to about $3.89 per gallon.
This yo-yo effect in the price of gasoline, hitting the top and dropping down and doing it all over again, is easy to spot when the data is plotted on a chart. Information conduits for the petroleum industry, however, would like for us consumers to be content with the stories about “supply tightness” due to the switch from winter to summer gasoline or refiners diverting supplies to “take advantage of higher prices” in the Great Lakes states. Is this the first time refiners have experienced a change of season? Am I supposed to take comfort in knowing refiners are simply chasing the dollar in another part of the country? Perhaps the more interesting story is what the data, rather than talking-heads, tells us.
Despite the occasional drops in the price of gasoline, the trend line for the last 10 years has been shifting upward. The numbers contained in these historical price charts are, in part, about our energy past, present and future. If we base predictions on the trend line, the future will clearly include even higher gasoline prices. Given that so many factors, such as the trading price of crude oil and the petroleum refiner control of production and distribution, are beyond our individual control, what can a consumer do about the yo-yo price of gasoline?
Professors Xiaodong Du and Dermot J. Hayes studied the impact ethanol production has on gasoline markets. Their findings are astounding. Although the price for a gallon of regular gasoline is high now, it could be $1.69 per gallon higher without 10% ethanol! In short, the multi-year research found that as more ethanol entered the marketplace, it shifted the demand for petroleum downward and thereby helped to suppress the price of gasoline.
Minnesotans definitely gain a pocketbook advantage by having 10% ethanol in regular gasoline. Consumers can gain additional control over the yo-yo price at the pump by having more fuel choice options. Right now, 2001 and newer vehicles, nearly 80% of the cars on the road today, can use a blend of 15% ethanol and 85% gasoline. E15, as this blend is called, is one more fuel choice option that can further suppress the price of gasoline and help bring down the trend line because it is made from renewable ingredients. If you don’t see E15 at your favorite retail station, ask for it so you can take advantage of its environmental benefits and start saving money at the pump.
It's great to hear from you. Send me a note ( This email address is being protected from spambots. You need JavaScript enabled to view it.) or call me (612.924.6495) with your biofuel questions and ideas for the next Buzz.
By Tim Rudnicki, Esq.
Give consumers choice at the gas pump! That’s what the June 24th decision by the U.S. Supreme Court means as it let stand an August 2012 ruling by the U.S. Court of Appeals. Here’s the basis for my observation about how and why these legal issues translate into good news for consumers.
In brief, the case before the U.S. Court of Appeals was about standing. Put another way, the issue in the Grocery Manufacturers Association vs Environmental Protection Agency case was whether the parties representing the food, petroleum and engine manufacturers experienced some harm that the Court could fix. The simple answer is this: there was nothing for the Court to fix because the parties had no harm traceable to E15 (15% ethanol added to 85% gasoline - only 5% more ethanol than is now contained in regular gasoline)!
What were the food, petroleum and engine groups trying to argue? To paraphrase the Court, the engine group used a “hypothetical chain of events” and provided “almost no support for their assertion that E15 ‘may’ damage the engines they have sold” as the group cited one internal study that talked about “potential vehicle damage” from use of E15. (Page 9). The petroleum group made unsubstantiated claims about potential misfueling problems. (Pages 11-12). As for the food group, the Court found their “interest in low corn prices is much further removed from” the petroleum and engine groups who had no basis for a claim. (Page 17).
So where does this leave matters for consumers who want to use E15? The Appeals Court reviewed the process used by the U.S. Environmental Protection Agency as it approved the use of E15. For instance, the record shows the U.S. EPA was meticulous in its assessment of test results. That’s why the U.S. EPA made two approvals. First, the U.S. EPA “approved the introduction of E15 for use in light-duty motor vehicles from model-year 2007 and later.” (Page 4). Then, only after the U.S. EPA obtained “further results from Department of Energy (DOE) tests that measured the effects of ethanol blends on the durability of engine catalysts...” (Pages 4-5) did the U.S. EPA expand the approval to use E15 for vehicles built within the last 12 years.
Here is a key take away point: E15 was carefully tested and is ready for use in approved motor vehicles (2001 and newer, approximately 80% of the vehicles on the road today). E15 has been tested over 6 million miles, tested more than any other fuel in history!
To sum up, current U.S. law requires increasing amounts of renewable fuel to be made available to consumers. With higher blends of ethanol and other biofuels, we can decrease dependence on finite fossil fuels. Using homegrown renewable ethanol and other biofuels also improves air quality, keeps thousands of jobs in Minnesota and helps consumers save dollars at the pump.
It's always great to hear from you. Keep the messages ( This email address is being protected from spambots. You need JavaScript enabled to view it.) and calls (612.924.6495) coming with your biofuel questions and ideas for the next Buzz.
By Tim Rudnicki, Esq.
Race horses can’t remove their blinders, but thoughtful, engaged people can remove their metaphorical blinders to understand energy issues and ideas that surround them. When it comes to fueling our motor vehicles, big oil would like for us to keep the blinders on so we see oil as the only way to supply the energy we need to maintain a high quality of life. What are the big oil blinders preventing us from seeing?
With big oil blinders on, we might overlook some critical issues. For instance, the $31 billion in combined profits reported by several oil companies through the second quarter overlooks how these companies drill deeper into the fragile Gulf of Mexico, frack for oil and use huge amounts of water and energy to tear up the Boreal Forest for tar sands oil. Those blinders also make it difficult to see the effects of oil spills and pipeline releases around the globe including in the pristine waters of British Columbia and on popular beaches in Thailand.
Energy does, and will indeed continue to, play a role in helping us live a high quality of life. But the rate at which our life sustaining planet is being drilled and fracked for oil is not sustainable. Whether drilled or fracked, fossil fuel hydrocarbons are finite, and perpetuating the addition to them is hazardous to the planet and our health.
So how did we get stuck on finite fossil fuels as our primary energy supply? Daniel Yergin, in “The Quest: Energy, Security, and the Remaking of the Modern World,” examines this question in some detail. Yergin explores more than 100 years of energy history and details the struggle for access to oil, the consequences of its use, the impact oil has on the global economy and the complex geopolitics surrounding oil. Through this examination we learn how various public policies and taxes tamped down renewable biofuels, such as ethanol, and supported the oil industry.
Despite the policies that favored oil, in the early years of the 20th century, Henry Ford envisioned a different energy future. It was Ford who built and introduced the Model T, the first flex-fuel vehicle that could operate on either ethanol or gasoline. Later, Ford introduced the “Fordson” tractors which could also run on ethanol or gasoline. Ford was not alone in his understanding about the role biofuels could have played decades ago. Yergin also writes about a scientist from General Motors who warned that oil is finite and found the solution to be alcohol fuel: “...the most direct route which we know for converting energy from its source, the sun, into a material that is suitable for use as fuel.” The Quest at 647.
What can we see when we pull off the big oil blinders? According to Yergin and other experts, a high quality of life based in large part on renewable biofuels such as ethanol. But the future is here in some measure because Minnesota’s biofuel industry is already producing enough clean, renewable fuel to displace approximately 50% of all the gasoline purchased by Minnesota drivers. That’s only the beginning. Based on biomass processing research being done by energy and agricultural experts like Prof. Bruce Dale (Professor of Chemical Engineering at Michigan State University), cropland can be used even more efficiently and sustainably to provide more food, feed and fuel while further reducing greenhouse gas emissions.
Let’s pull off those big oil blinders and get the full picture about today’s renewable biofuels. Right here, right now, ethanol produced in Minnesota uses a small amount of water to make each gallon of fuel. Ethanol is a premium motor fuel that has 57% fewer lifecycle greenhouse gas emissions compared to gasoline. The men and women who run biofuel plants in Minnesota support 12,600 jobs. The Minnesota biofuel producers inject $5 billion into the economy. Ethanol actually holds down the price at the pump.
What else will you see when you pull of the big oil blinders? Coming very soon to Minnesota: E15! E15 is 85% gasoline added to 15% ethanol (that’s only 5% more ethanol than is currently found in most “regular” gasoline sold in Minnesota, but that 5% will make a big difference in lowering greenhouse gas emissions). Will your favorite fueling station be leading the way with E15? Find out by asking the next time you stop for fuel.
By Tim Rudnicki, Esq.
Think, for a moment, how you started your day. You probably flipped a light switch on, heated some breakfast, rode a bus or drove to your destination. Seldom do we have time to consider the energy sources used to brighten our homes or workplaces, cook meals and power a bus or other vehicles. Yet the type of energy we use, and where that energy comes from, has profound implications for our quality of life today and well into the future.
As always, I really appreciate hearing from you. Keep the messages ( This email address is being protected from spambots. You need JavaScript enabled to view it.) and calls (612.924.6495) coming with your biofuel questions and ideas for the next Buzz.
By Tim Rudnicki, Esq.
Did you hear the news? The United States Environmental Protection Agency (U.S. EPA) is proposing to roll back the amount of biofuels, like ethanol, to be mixed with gasoline. Why? When you dig deep into the rationale it goes like this: because the oil industry doesn’t want to blend more biofuels into gasoline!
Those of us who care about having fuel choice at the pump, saving money when fueling up, keeping the Minnesota biofuel producers that support over 12,000 jobs strong, decreasing pollution and keeping billions of energy dollars in Minnesota need to give the U.S. EPA an important reminder.
• The Energy Policy Act of 2005, from eight long years ago, was the big hint given to the oil companies that they needed to do something about blending increasing amounts of biofuels, like ethanol, into the nation’s fuel supply for motor vehicles.
• Two years later, via the Energy Independence and Security Act of 2007, Congress went even further to make clear its intent by explicitly stating the increased volumes of renewable fuel that needed to be blended into transportation fuel through the year 2022.
• For 1.5 years the petroleum industry has had another approved fuel (E15 which is 15% ethanol and 85% petroleum) that can be used to meet its volume obligations intended by Congress.
The U.S. EPA proposed rule for 2014 sends the wrong message to the petroleum companies: do everything you can to not comply with the law and the law will be changed so you are in compliance. That’s the wrong message because it gives the petroleum companies a “get out of jail free pass” while undermining Minnesotans’ efforts to use more renewable fuel. The U.S. EPA proposed rule sets the amount of renewable fuel to be used below the amount which is already being used in Minnesota!
To the U.S. EPA we say: don’t undermine all that is important to Minnesotans like having fuel choice, maintaining our strong homegrown renewable energy industry, growing quality jobs, cutting pollution and keeping energy dollars on Main Street. With eight years to prepare for this time, the petroleum industry does not deserve a free pass on fulfilling its obligations under the law. Keep the original renewable fuel requirements and do what’s right for consumers.
If you think it’s important to keep moving forward with renewable fuels, now is the time to make your voice heard. To help you communicate your support for biofuels and oppose the U.S. EPA proposed rule, check out this “Take Action Now” web banner (www.MnBioFuels.org ) for some ideas and contact information.
Don’t let the U.S. EPA take Minnesotans backwards when it comes to our future and quality of life. Let’s keep working together and moving forward for a brighter, more sustainable energy future.
Please keep those email This email address is being protected from spambots. You need JavaScript enabled to view it.and calls (612.924.6495) coming with your biofuel questions and thoughts about how biofuels have improved your quality of life.
By Tim Rudnicki, Esq.
Last week, the Minnesota Department of Agriculture began a tour of ethanol plants in Minnesota to signal its support for the renewable fuel standard.
This tour, which ends next week, aims to raise awareness about a proposal by the Environmental Protection Agency that, if it becomes law, could severely and adversely impact the rural and overall economy in Minnesota.
To recap, the EPA has proposed to cut the statutory requirements for ethanol in 2014 under the renewable fuel standard, which calls for the production of 14.4 billion gallons of ethanol, by 10 percent to 13.01 billion gallons.
This is very puzzling because the EPA’s proposed requirement for this year is even lower than 2013, which was at 13.8 billion gallons, while the potential to use more ethanol is higher in 2014.
Those who support this proposal refer to the oil industry-created “blend wall” or claim decreasing gasoline sales. As such, they wrongly conclude ethanol use should decrease.
Right now, the bulk of gasoline sold in this country contains 10 percent ethanol (E10). The congressional intent behind the renewable fuel standard, however, is to have biofuels, like ethanol, comprise an ever-increasing volume of transportation fuel.
Thus, we need to decouple this notion that only 10 percent ethanol can be in the fuel mix. Fuels such as E15 (a higher octane fuel which contains 15 percent ethanol) can easily satisfy the original 2014 RFS requirements since 77 percent of vehicles on our roads today can use E15.
For Minnesota, the EPA’s proposal is bad news.
There are currently 21 ethanol plants in Minnesota, which makes us the fourth-largest ethanol producing state in the country. Given the state’s renewable energy policies going back to the 1990s and the implementation of the renewable fuel standard in 2005, ethanol has played a significant and positive role in our state’s economy.
With 1.1 billion gallons of ethanol produced annually, the ethanol industry here supports about 12,600 jobs and injects $5 billion into the economy per annum.
Should the EPA’s proposal go through, the MDA expects the state’s economy to lose $610 million this year with a loss of 1,532 jobs.
These jobs are directly linked to the ethanol industry and include personnel in the plant as well as the suppliers of products and services that help to keep the plants operating to produce clean, renewable fuel.
Not included in the calculation are farmers who provide the renewable ingredients used to produce ethanol. What will happen to these individuals and their families who run businesses in the communities where one of these ethanol plants are located?
Under the EPA’s proposal, ethanol production in Minnesota will be reduced by over 100 million gallons, causing a ripple effect that could cost the economy another $101 million in co-products, such as dried distillers grains, which is used as a high-protein animal feed.
Lower ethanol production also means consumers could stand to lose out on potential savings at the pump.
As previously mentioned, the renewable fuel standard sought to increase the availability of fuels such as E15 and in turn drive down the demand for and price of petroleum.
E15 is priced 10 to 15 cents less than regular gasoline and is available at select stations in the state. The Minnesota Bio-Fuels Association has been working with retail gas stations to increase the availability of E15.
But this momentum may be lost if the EPA’s proposed rule becomes law. Instead, it brings us backward because it sets a threshold below the current ethanol usage in Minnesota.
Ultimately, the EPA’s proposal is going to hurt our economy and consumers. It will lower the amount of ethanol used in 2014 and hinder efforts to reduce greenhouse gas emissions, save consumers money at the pump and build a strong foundation for the next generation of biofuels.
The bottom line is this: The EPA should reverse its proposed rule and stick to the original ethanol requirements Congress put in the renewable fuel standard.
We recently launched an online platform on mnbiofuels.org that enables Minnesotans to send a message to the EPA, the White House and the state’s Senate and House representatives in Washington.
Through this platform, it takes under a minute to send a message indicating your opposition to the EPA’s proposed rule. The EPA has set Jan 28 as the deadline for comments regarding its biofuel proposal. With enough voices, we may be able to persuade the EPA to reconsider its backward-looking proposal so we can keep moving forward to a more sustainable energy future with renewable biofuels like ethanol.
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By Tim Rudnicki, Esq.
Whether you are taking a road trip, running errands around town or driving the kids to after school sports, most likely it’s biofuels that are helping you get to your destination. When you fuel up with “regular,” at least one in 10 gallons is clean, renewable ethanol. If you are among the growing number of drivers who are finding “E15" at your local retail station, at least 1.5 gallons in 10 is high octane ethanol.
Why should you care if you are buying biofuels? In short, biofuels, such as ethanol, help to hold down the overall price of fuel, save you money at the pump and put all of us on the path toward a sustainable energy future. If it weren’t for biofuels, gasoline prices would be from $1 to $1.69 more per gallon. That’s because biofuels are pushing down demand for the more expensive, $108 per barrel, petroleum. The piece found in this newsletter, “RFS Kept Gas Prices Down,” by Philip K. Verleger, Jr., gives us a broad perspective on the role of biofuels and how they help our household budgets.
As for additional savings, have you noticed the difference in price for E15, or E85, compared to regular gasoline? If you drive a 2001 or newer vehicle, you can use E15. For those who drive a Flex Fuel Vehicle (check for the badge on the back of your vehicle, statement on the gas cap or details in your owner’s manual to find out if you have such a vehicle), you can use E85 (that means up to 8.5 gallons in 10 is renewable ethanol). A few days ago I paid 20 cents less per gallon for E15 compared to regular. Even though I was buying a higher octane fuel for our turbocharged car, I paid less! And at a nearby E85 dispenser, drivers of Flex Fuel Vehicles were waiting in lines to fill up at 87 cents less than regular.
Biofuels are about more than holding down prices and saving drivers money at the pump, they are about providing all of us with a renewable energy source for today as well as tomorrow. Consider this: Today’s 21st century biofuels come from the solar energy stored in renewable ingredients grown right here in Minnesota.
The full scientific analysis is a bit beyond the scope of this piece, but here is a high level view of what makes biofuels a sustainable and renewable energy source. Thanks to photosynthesis, plants use solar energy, soil nutrients, water and carbon dioxide, a greenhouse gas, to grow during the spring, summer and fall seasons. For instance, entire corn plants, the starch in kernels of corn or grasses, all can regenerate. Next, the biofuel producers in Minnesota use natural processes, similar to those used in making beer, to unlock the solar energy stored in the renewable ingredients and thereby give us ethanol.
Much has changed over the years when it comes to making the biofuels that power our vehicles. With low input farming practices used throughout Minnesota, farmers can grow more food and renewable ingredients on fewer acres. Minnesota based biofuel producers use high efficiency boilers, recycle water and reuse heat to make a renewable fuel that is truly green.
In addition to getting more energy out than what goes in to make ethanol, the total lifecycle greenhouse gas emissions (all the inputs to grow renewable ingredients and actually make ethanol) are 44% to 57% less than petroleum. So every time you increase the amount of ethanol you are using, for example using E15 instead of regular, to get from place to place, you are helping to cut down on greenhouse gas emissions. Check out “Why Are We Producing Biofuels?” (in this newsletter) for an expanded view on harnessing the sun’s energy.
It’s rather amazing when one stops to ponder what biofuels are and what they do for us. In a society where we have been conditioned to think the only energy is that which comes from drilling, it is refreshing to know we, as Minnesotans, have the potential to grow our way into an even more sustainable energy solution. I invite you to study the many scientific reports on our website to learn more about renewable ingredients and how biofuels are made here in Minnesota. Biofuels move us from place to place, save us money and provide a renewable energy source for today and tomorrow.
Please keep those email This email address is being protected from spambots. You need JavaScript enabled to view it. and calls (612.888.9138) coming with your questions and thoughts about biofuels.
By Tim Rudnicki, Esq.
The Editor’s Note points to a major problem confronting society but it also points to part of the solution to the problem. According to the Intergovernmental Panel on Climate Change (IPCC), many of the observed climate changes, including temperature, storm patterns and intensity and the amounts of rain and snowfall, are unprecedented over decades to millennia. And the largest contribution to climate change “is caused by the increase in the atmospheric concentration of carbon dioxide.” Carbon dioxide is one of the gases released from the fuel we use to power our vehicles.
Not all fuels are the same when it comes to carbon dioxide. In Greenhouse Gas Emissions Reduction: Biennial Report to the Minnesota Legislature (January 2013), the Minnesota Pollution Control Agency notes petroleum “fossil fuels contain carbon from millions of years ago which have long been removed from the carbon cycle.” On the other hand, renewable biofuels, such as ethanol, are made from living plant material. Fossil fuels cannot recapture carbon, but living plants can. “Carbon dioxide will be used by plants during photosynthesis and incorporated into the next crop of biofuels.”
While the science behind some of these statements can be rather involved, one of the take aways is this: using more biofuels can help decrease the amount of greenhouse gas emissions. That’s a good thing for all of us.
Remember, you are part of the solution to the climate change challenge. In fact, if you have a 2001 or newer vehicle powered by a spark ignition engine, you can use E15. E15 is a blend of 15% ethanol and 85% gasoline. E15 is a higher octane fuel that is usually priced 10 cents to 15 cents under the price of a gallon of regular gasoline. But with E15 you will be using 5% more biofuel than is found in regular gasoline.
If you have a flex fuel vehicle (check owner’s manual, look for the badge on the back of your vehicle or check for a message on the gas cap), you can use even more biofuels, up to 85% ethanol. With E85 you will be saving more than 80 cents a gallon compared to regular gasoline and driving down even more carbon emission each time you need to use your vehicle.
For more details about the reports referenced here, send me an This email address is being protected from spambots. You need JavaScript enabled to view it. or call me at 612.888.9138, Ext. 101.
By Tim Rudnicki, Esq.
Let’s not confuse testing models with the real issues of the day, namely, the adverse effects of oil, a finite fossil fuel. By the time you read this piece, several days will have passed since the study on biofuels from crop residue was released and many other commentators have written about their points of view that challenge the science behind some questionable assumptions in the study. The operative word in all of this is science. Science is important in the day-to-day production of biofuels just as science is important in other aspects of life. Science is especially important when dealing with long-term energy and climate issues that will have a profound effect on humanity and the rest of the planet far into the future.
In this short piece, I attempt to unpack a few complicated issues with you and shift the spotlight to where I think it can do the most collective good.
We often hear the word “science” bandied about. What is science? Science, as defined in The American Heritage Dictionary of the English Language, is: “The observation, identification, description, experimental investigation, and theoretical explanation of natural phenomena.” This rich definition suggests science is rather substantive. How can we tell if an investigation or report uses the scientific method?
If, for example, I merely attempt to describe how biofuels are made, is that science? Probably most of us would conclude the description of the biological process for making biofuels is not in and of itself science. The reasoning behind that conclusion is simple: we are missing the other four essential elements of the definition which are observation, identification, experimental investigation (test, controlled conditions, demonstrate a known truth, examine the validity of a hypothesis, or determine the efficacy of something previously untried) and theoretical explanation of natural phenomena. In short, we can determine whether an investigation or report is credible science by testing it against apolitical elements.
Interestingly, despite sound science that passes all the tests to be science, Greenwire news service from April 28, 2014, reports “polls show that significant swaths of the American public distrust climate science, even though scientists have been warning about the risks of climate change for several decades.” Science is not about winning a popularity contest. Remember, at one time, contrary to scientific findings, people believed the sun revolved around the earth. So what can possibly explain the distrust some people have of climate science? Could it be due to the way some scientists are vilified or how some critics cloud science with uncertainty? More importantly, if we were to collectively embrace the climate science, as a people, state, nation and global community, we would be racing to further reduce our use of high carbon fuels such as oil. We would be racing to find ways to be even more fuel efficient and indeed use a higher percentage of renewable biofuels since these fuels are derived from plant ingredients that work with the cyclical natural systems to absorb carbon dioxide and emit oxygen.
Now for some cloudiness. Without going too deep into the merits, or soundness of science, behind the crop residue study done by the Department of Biological Systems Engineering, University of Nebraska, it seems this study gives critics of biofuels and proponents of oil just what they wanted. With media attention focused on one part of a study that relies on 39 other studies instead of in the field measurements, it can create confusion and cloud the broad range of science on this complicated issue. The crop residue study examines other reports and data and tests models and the effects of removing extremely high levels of corn residue from fields to make biofuels. In fact an environmental team leader at the Argonne National Laboratory said the study looked at “extreme levels of corn stover removal — up to 100 percent.” In the real world, however, stover removal ranges from 10% to 25%, well within the range required to replenish the soil.
The crop residue study itself does acknowledge its focus is on the removal of high levels of crop residue without any mitigation actions. On the other hand, within the same study, specific mitigation factors and management options are suggested as actions that can be taken to balance soil carbon dioxide emissions. In other words, the study tests what appears to be the absolute extreme effects associated with removing virtually all the crop residue and yet it does suggest ways to avoid the extreme so as to keep a balance between soil carbon and emissions. Confusing, or confusing enough to take the spotlight off petroleum for a brief time?
Let’s take a look at the fine print of other studies and apply some critical thinking. In the study Well-to-wheels energy use and greenhouse gas emissions of ethanol from corn, sugarcane and cellulosic biomass for US use, Argonne National Laboratory determined that ethanol made from corn starch reduces lifecycle GHG emissions from 48% to 57% below emissions from petroleum. This study examined the full spectrum of emissions for fertilizer, farming, production of biofuels and combustion in vehicles. Biofuels, such as ethanol, produced in Minnesota unequivocally reduce GHG emissions.
In the same study by Argonne National Laboratory, the use of corn stover, the material in the crop residue study done by the University of Nebraska, was examined. Here is the finding from Argonne’s examination of the issue: using the corn stover increases the GHG reductions to approximately 103% better than petroleum! The critical factor that differs between the Nebraska study and Argonne is this: management of corn stover removal. The Nebraska study is based on removing virtually all the stover whereas Argonne’s position was “The general consensus has been that we would manage corn stover removal to avoid adverse impacts to soil health, including a decline in soil organic carbon.”
If we go back to the real issue of the day, it is GHG emissions and how to significantly reduce them. Biofuels, including from corn stover (crop residue), is part of the solution. The sound science we have, based on countless studies done over the years, should be enough to remove any clouds of doubt. Those studies demonstrate that biofuels, including advanced biofuels that use crop residue, are indeed a solution to our climate change challenge because their lifecycle GHG emissions are far below those for petroleum.
Furthermore, renewable biofuels produced in Minnesota provide some solid economic benefits. In a recently released comprehensive economic study conducted by John Dunham & Associates, we learn the production of biofuels in Minnesota injects $11.7 billion annually into the economy. This same economic analysis finds the Minnesota biofuel producers help support 48,506 jobs (direct, induced and supplier), pay $3 billion in wages annually and contribute $1.1 billion annually in combined state and federal taxes.
While the fine print does matter, we should be clear about the issues. The high carbon emitter in town is oil. On the other hand, biofuels, for today and tomorrow, are an important renewable, low carbon emitting energy source. Biofuels do, and will, continue to drive down GHG emissions to help stabilize the climate. Biofuels do, and will, continue to be a big economic boost for Minnesota as well as the consumers who benefit from having a higher octane fuel that holds down the price of gasoline. By keeping the focus on the real issues and applying science to further enhance the production of biofuels, we can indeed displace at least 30% of petroleum use in Minnesota by 2025 and be on a truly sustainable, low carbon biofuel cycle.
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By Tim Rudnicki, Esq
Just a few days ago the National Conference of State Legislatures convened policymakers from across the country in Minneapolis. Several thousand legislators, legislative committee staffers and other interested observers of public policy development listened to presentations from a variety of subject matter experts on topics ranging from education to health care to energy to name just a few.
The purpose of the National Conference of State Legislatures is to create a venue in which policymakers can exchange ideas on some of the most pressing issues confronting states including on matters involving energy.
When it came to the issue of energy, however, the National Conference of State Legislatures (NCSL) fell flat in its efforts to stimulate the exchange of ideas about energy and, in particular, renewable energy such as biofuels. Based on the energy sessions I attended, the mantra was the three "F's": fossil fuels and fracking.
Although one keynote presenter acknowledged biofuels can play some role in meeting the need for liquid transportation fuels, a golden opportunity to make the case for biofuels was missed. For those who follow the biofuel industry in Minnesota and in other parts of the United States, the evidence is clear: biofuels provide significant benefits for the environment, consumers, the economy and in the drive toward greater energy independence.
If a picture is worth 1000 words, the images in the NCSL’s glossy energy policy guide tells only part of the energy story. One can find photos of drilling rigs, cooling towers associated with electricity generation, rail tank cars, photovoltaics and wind turbines. Arguably some of the photos, such as the wind turbines and photovoltaics, suggest an energy policy might include renewable energy. But neither the text nor the photographs hint at a farm field or a biofuel plant. And there are no charts showing the dramatic decrease in the amount of greenhouse gas emissions from biofuels compared to petroleum.
Interestingly, one of the energy plan goals refers to developing energy independence. Unfortunately, while the suggested plan makes reference to decreasing a State's dependence on foreign and out-of-state energy sources, the example cited to accmplish this goal is to use the natural gas resources rather than, for instance, other renewables such as corn starch or plant residue.
I cite these examples in the hope that we can further expand a conversation about the role of biofuels in Minnesota, across the Midwest and throughout the nation. I challenge them to have a conversation with policy makers to further explore creative ways in which we can introduce higher volumes of biofuels to consumers in the marketplace. We have lots to talk about as Minnesota is starting to lead the way on helping fuel retailers make E15 available to consumers.
If I could make one suggestion to the NCSL, it would be this: let’s open up future discussions about planning for the energy future by affirmatively presenting the full scope of benefits offered by biofuels. Let’s share with other state policymakers some of the innovative approaches Minnesota is taking to lessen dependence on finite fossil fuels, obtain environmental benefits, pump more dollars into the economy and help consumers save money at the pump. While not every state can replicate the progress we are making in Minnesota to offer consumers more biofuels, a more balanced discussion about renewable energy policies could expand vocabularies to include the “b” word: Biofuels.
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By Tim Rudnicki, Esq
The carbohydrate economy, or the biofuel vision, has been in the works for more than 100 years. At present, the most significant manifestation of that biofuel vision is expressed in the Renewable Fuel Standard (RFS) and Minnesota’s Petroleum Replacement Statute (PRS). For those of us concerned about the future of biofuels and the role they can play in boosting our energy security, creating economic prosperity, helping consumers and reducing greenhouse gas (GHG) emissions, it is especially important that we take our right and responsibility to vote one step further. We need to diligently seek out candidates for elected office who really do understand and support biofuels, then we should vote for those candidates and once they are in office we need to hold them accountable for their actions that either hinder or help biofuels.
We've come this far. Let's not backslide. Most of you probably realize that the first Flex-Fuel Vehicle was the Model T which was introduced by Henry Ford in 1908. The Model T was designed to run on gasoline as well as ethanol. Although gasoline was the dominant fuel at that time because it cost about a third less than ethanol, gasoline prices rose significantly near the end of World War I. Those price increases for petroleum gasoline sparked a healthy debate about the role of biofuels as explained in “The Quest” by Daniel Yergin.
According to Yergin, some leading thinkers in the early 20th century were considering the advantages of biofuels over petroleum and a couple of prominent scientists had this to say about biofuels:
"(...alcohol is) a wonderfully clean-burning fuel… that can be produced from farm crops, agricultural waste and even garbage." - Alexander Graham Bell
"(alcohol fuel is) the most direct route which we know for converting energy from its source, the sun, to a material that is suitable for use as fuel." - Scientist for General Motors.
And biofuels did indeed get a boost in the marketplace.
Just as ethanol was on the rebound, the 18th Amendment to the Constitution took effect and alcoholic beverages were prohibited. This prohibition reached into the fuel sector as critics claimed that "To force the use of alcohol in motor fuel would be to make every filling station and gasoline pump a potential speakeasy." It was only after the 21st Amendment repealed Prohibition, and when the Great Depression took a toll on farmers and commodity prices, that ethanol became a key component in farm relief and within the fuel supply. By the late 1930s, "Agroblends" - a mixture of gasoline and alcohol - were sold across the Midwest.
But the success of ethanol in the Midwest and other parts of the United States was short-lived as evidenced by a series of events over the following 66 years. Shortly after World War II, ethanol, once again, fell out of favor. But by the 1970s the United States was dealing with the adverse economic hardship caused by the oil shocks. Subsequent energy policies served to once again encourage the development of ethanol facilities.
Unfortunately, when oil prices collapsed in the mid-1980s, ethanol, once again, faded away. This type of whipsaw effect was due, in part, to the absence of a comprehensive renewable energy policy and inaccurate and incomplete economic cues regarding the externalities associated with petroleum. The runaway petroleum industry, with all the overt and hidden subsidies, had taken a toll on the economy, energy security, the environment and consumers.
It was only in 2005, with the introduction of the RFS and the PRS, that policymakers demonstrated an understanding about the complex interplay between energy policy, the agricultural sector, consumers, the economy, energy security and the environment.
While it might seem farfetched to expect that 100 years of neglect and damage to biofuels could be reversed in 10 years, the RFS and PRS are doing just that. These laws, while not fully implemented yet, are helping to deliver many positive benefits to people across Minnesota and the Nation.
Due to the RFS and PRS, Minnesota has seen some dramatic improvements and tangible benefits on a number of fronts. As for energy security, Minnesota ethanol producers are displacing at least 1.1 billion gallons of finite, carbon intensive, petroleum. Although Minnesotans have yet to maximize use of all the biofuels produced within the state, current biofuel production levels are approximately one half of the total motor fuel consumed annually in Minnesota.
As for economic benefits, Minnesota-based biofuel producers annually are injecting approximately $11.7 billion dollars into the economy as we grow our liquid transportation fuel. Rather than sending our energy dollars out of Minnesota to purchase and import finite petroleum, energy dollars used to purchase homegrown renewable energy are dollars that go to Main Street Minnesota.
Consumers receive economic benefits directly at the fuel dispenser. The more visible benefit is in, for example, the difference in price between non-oxygenated gasoline versus regular unleaded gasoline (E10 which consists of gasoline at 90% and ethanol at 10%) versus E15 which ranges from 10 cents a gallon to 20 cents per gallon less than regular gasoline. While less obvious, an equally important economic benefit is the role ethanol plays in offsetting the demand for petroleum. Several comprehensive studies have found that the supply of ethanol at the wholesale and retail levels helps to suppress demand for, and therefore the price of, gasoline by up to $1.69 per gallon in the Midwest.
Biofuels, such as ethanol, provide energy security, economic and consumer benefits as well as a broad range of environmental benefits. For example, according to scientific findings and reports compiled by the Renewable Fuels Association, ethanol contains 35% oxygen which, when added to petroleum gasoline, promotes more complete combustion and thereby reduces harmful tailpipe emissions. Further, while ethanol displaces the use of toxic gasoline components such as benzene - a carcinogen - ethanol also decreases GHG emissions. In 2013 alone, the amount of ethanol produced in the United States reduced GHG emissions from on-road vehicles by 38 million metric tons which is equivalent to removing 8 million cars from the road.
But we’ve only just begun. The RFS and PRS have laid the foundation for a more durable and sustainable energy future. For nearly 100 years we have been beholden to petroleum, including all the risks that come from putting all of one’s proverbial energy eggs in one finite fossil fuel basket. Finally, thanks to the RFS and PRS, we have at least another seven and ten years respectively to more fully grow, use and realize the full scope of benefits from renewable biofuels.
As you prepare to vote on Nov 4, if you value the benefits of biofuels and want to keep moving forward rather than getting caught in the past biofuel whipsaw, take some time to do a bit of homework and put the tough questions to the incumbents and their challengers. Examine past votes the candidates might have taken on energy policy matters. Ask whether a candidate supports the RFS and the PRS. Determine what, specifically, the candidates have done, or propose to do, to advance the production and use of renewable biofuels? If a candidate states they support the RFS and the PRS and generally like biofuels yet they call for keeping E10 as the status quo, ask them to explain their position until you have a clear understanding of where they really stand regarding biofuels. Finally, after you have weighed the evidence and made your decision, be sure to cast your vote.
As always, you can direct your questions or comments to me This email address is being protected from spambots. You need JavaScript enabled to view it.
By Tim Rudnicki, Esq
The dust is still settling following the recent mid-term elections and the U.S. EPA’s action to delay making a decision about the 2014 Renewable Volume Obligations (RVO). Even though we can’t see clearly through the dust quite yet, some fundamentals and challenges remain the same. At least for now.
With respect to some of those fundamentals, the Renewable Fuel Standard (RFS) and the Minnesota Petroleum Replacement Statute (PRS) are still intact. These two laws provide the backbone for moving us as a State and Nation away from being beholden to carbon intensive finite fossil fuels and toward a society grounded more fully in the use of greater amounts of renewable energy.
But what should we make of the U.S. EPA’s announcement that it will delay finalizing the RVO until 2015? As the dust settles on this issue, it is becoming clear that to delay making a decision is to not make a decision.
There is no excuse for the EPA to delay a decision. The black letter law of the RFS is clear as is the Congressional intent behind the law: push beyond petroleum’s comfort zone! For years the petroleum industry has been comfortable with using enough ethanol to boost the octane in gasoline. But the intent of the RFS is to lessen our dependence on finite fossil fuels. And the only way for that to happen is for the EPA to stand firm on the biofuel requirements set forth in the RFS. For too many years the petroleum industry has been using Renewable Identification Numbers to buy its compliance with the RFS rather than actually working to make more biofuels available to consumers.
As explored in my last column, the history of biofuels has been a roller coaster ride over the last century because various public policies, whether overt or through hidden subsidies, have favored carbon intensive fossil fuels. It is the RFS and PRS, however, that are helping to smooth out the roller coaster ride for ethanol and other biofuels. That’s important for all of us as we try to free ourselves from the fossil fuel shackles and more fully enjoy the benefits of homegrown ethanol and other biofuels. The benefits of biofuels are in the form of greater energy independence, economic growth, consumer savings and environmental quality.
With respect to the elections, just as there has been a shift in the control of the U.S. Senate, so too, has there been a shift in control of the Minnesota House of Representatives. The Minnesota Bio-Fuels Association will continue to work with all Members of the Minnesota Congressional Delegation, the Minnesota Legislature and the Governor to remind everyone that biofuels are a bipartisan solution to the economic, energy and environmental challenges that confront us.
“The economic activity started by the renewable fuel sector creates a ripple effect as supplier firms and employees respond throughout the economy.” John Dunham & Associates, Inc. (2014). In practical terms, biofuel producers located in rural communities are a positive catalyst for economic growth in those communities as well as across Minnesota. For instance, in the Twin Cities metropolitan area there are over 14,000 industry-related jobs which contribute approximately $3 billion annually to the economic well-being of the area.
Thanks in large measure to the RFS and PRS, renewable fuels also provide a strong overall economic boost to the economy, and there can be room for further growth of the biofuels industry if the RFS and PRS are allowed to function and consumers are allowed to have more choice at the fuel dispenser. Based on the Dunham & Associates Report from 2014, Minnesota’s renewable fuel industry generates approximately $11.7 billion of total annual economic output, supports over 48,500 jobs, generates $3 billion in wages annually and contributes $708.2 million in Federal taxes and $401.9 million in Minnesota taxes each year.
Economic, consumer and energy security benefits stemming from ethanol and other biofuels are also accompanied by some powerful environmental benefits. According to the Minnesota Environmental Quality Board, for example, biofuels are an important tool for reducing carbon emissions. By replacing carbon intensive petroleum with low carbon biofuels such as ethanol, Minnesota is projected to reduce carbon emissions by 874,000 metric tons which is equivalent to removing at least 188,000 cars off the road each year. That decrease in carbon emissions will grow as more biofuels are used. Biofuels help to reduce GHG emissions because green plants act as solar collectors which also use carbon dioxide to make and store energy. The energy stored in the plant is unlocked by biofuel producers to form ethanol and other biofuels. Further, including all the energy used to grow the crops to the point where the ethanol is used as fuel in an engine, the total lifecycle carbon emissions for ethanol are up to 57 percent less compared to petroleum, according to a 2012 study by the Argonne National Laboratory.
Given all the potential the biofuels industry has to provide consumers with more low cost, low carbon renewable fuel; grow the economy; and increase energy independence, now is the time to stay the course and allow the RFS to work as it was intended. Is it expecting too much for the U.S. EPA to enforce the law?
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By Tim Rudnicki, Esq
Historical GasBuddy.com price charts tell some contrasting stories about the average retail price of gasoline over the last eleven years. A gallon of gasoline skyrocketed from a low of $1.44, when a barrel of crude oil was selling for $29 just before the Iraq war, to $4.10 per gallon before the Great Recession when a barrel of crude oil was selling for $141. Then the oil and gasoline prices of the Great Recession plunged to $34 per barrel and $1.64 per gallon of gasoline. But those prices started to climb until they hit $112 per barrel and $4 per gallon of gasoline by the summer of 2011. And yes, the price for a barrel of crude oil and a gallon of gasoline has dropped again, but where do you think those prices will be headed and why?
The “why” part of the question, for the moment, is beyond the scope of this short column. Crude oil and gasoline prices stem from a host of global commodity market, economic, political, supply and demand and other rational and irrational factors. Analyzing the why prices fluctuate issue would involve many factors including the battle between Saudi Arabia and U.S. shale producers as explained in our blog “Cheap Gas May Not Last For Long.”
Focusing on the “where” are prices headed part of the question, however, might serve as a useful guide as we, as a society, attempt to make some timely, rational decisions about our energy future and concomitant quality of life. To be clear, the “where” part of the question is complicated, but one underlying factor will continue to drive where the price of petroleum, regardless of the short-term price swings, heads and that factor is: finiteness.
“Earth's endowment of conventionally reservoired crude oil is a large but finite volume.” See the Energy Information Administration (EIA) article “Long-Term World Oil Supply Scenarios: The Future Is Neither as Bleak or Rosy as Some Assert.” As the report explains, the future is neither bleak nor rosy for a couple of reasons. Based on a two percent crude oil growth rate, some predictions indicate the future recoverable amount of oil could meet demand for at least another 32 years or until approximately 2047. At that time, however, revised predictions show a steep drop in recoverable oil over a span of only another 13 years. In other words, we have a few years before life as we know it with crude oil ceases, but there really is a limited supply of crude oil no matter what oil producing nations do about short-term pumping strategies.
Put another way - crude oil, in all forms, will become increasingly scarce. As the finite crude oil resource becomes increasingly scarce, the price will rise. Eventually, the price per barrel of crude oil and a gallon of gasoline will rise to the point where the last few barrels on and in the earth will be too expensive to extract or use for a variety of purposes including transportation fuel. My take on the recoverable crude oil predictions is this: if we, as a society, were to allow our quality of life to be dictated by crude oil, the future is actually very bleak. Fortunately, we are liberating ourselves from the constraints of crude oil, a finite fossil fuel.
Thanks to the Renewable Fuel Standard and Minnesota’s Petroleum Replacement Statute, we are actually on a brighter, more rosy, energy path. That path is heading toward greater availability and use of clean, renewable biofuels. With renewable biofuels we can sustain a higher quality of life far into the future.
Biofuels, such as ethanol, are made from renewable plant material or biomass. Plants, the original solar collectors, use sunlight, soil nutrients and carbon dioxide from the atmosphere to grow. The plant material, or biomass, will be available for making biofuels and other products as long as good soil, adequate moisture and sunlight are available. Biofuels can supply our energy needs today and far into the future because, unlike crude oil, biofuels are made from renewable, regenerative plant biomass.
Finite crude oil will continue to escalate in price while biofuels actually help to suppress fuel prices. Professors Xiaodong Du and Dermot J. Hayes, Center for Agriculture and Rural Development, studied the impact the availability of ethanol in the fuel market has on the price of gasoline. Their findings, which examined wholesale gasoline prices within the fuel supply chain, are astounding. In the Midwest, for example, ethanol was found to offset the demand for petroleum and thereby had a price cascade effect which held gasoline prices down by as much as $1.69 per gallon.
Let’s continue to heed the warning signs about finite crude oil and upward trending price lines for both crude oil and gasoline. The prices may fall in the short-term, but historical pricing shows the trend line has been, and will continue to be, upward. On the other hand, the Renewable Fuel Standard and Minnesota Petroleum Replacement Statute call for giving consumers access to more renewable biofuels. So let’s not be lulled into complacency because the currently low gasoline prices will eventually shoot up again.
We still have some time to make a smooth transition from crude oil to greater use of renewable biofuels. Here is what you can do today to make sure all of us stay on a sustainable, greener, more affordable energy future path:
1. The next time you go to fuel up at your favorite retail station, use E15 in your 2001 or newer vehicle. If you don’t find E15 at your fuel retailer, (1) tell your fuel retailer you want E15 and ask when they plan to carry E15 and (2) tell me the name of your favorite fuel retailer so we can help them launch E15 for you.
2. If you have a Flex Fuel Vehicle, use E85. If you don’t find E85 or other mid-level ethanol blends at your fuel retailer, (1) tell you fuel retailer you want E85 and ask when they plan to carry it and (2) tell me the name of your favorite fuel retailer so we can help them launch E85 for you.
3. Contact your legislators and let them know you support the Renewable Fuel Standard and the Minnesota Petroleum Replacement Standard because biofuels are (A) good for the environment (up to 57% fewer greenhouse gas emissions compared to gasoline), (B) support 48,000 jobs in Minnesota, (C) inject $11.7 billion into the economy each year, (D) keep energy dollars in Minnesota and (E) help consumers save money. For more facts and where they come from, check out the MBA website at www.mnbiofuels.org .
From all of us at Minnesota Bio-Fuels Association, we wish you a Happy New Year.
As always, you can direct your questions to me This email address is being protected from spambots. You need JavaScript enabled to view it.
By Tim Rudnicki, Esq
Yes, the Renewable Fuel Standard and Minnesota’s Petroleum Replacement Statute both call for increasing use of biofuels such as ethanol. And, most importantly, consumers, based on our survey work, seek out and have been using increasing amounts of E85 and E15. One complaint we hear from consumers, however, is about the lack of access to E15 or E85 at their favorite fuel retail station locations.
What can be done to give more consumers greater access to E15 and higher blends of biofuels and why does this matter? Access to higher blends of biofuels does matter for some practical and profound reasons. With 18 retail fuel stations in Minnesota now offering E15 (the “new regular”), many consumers have already had the opportunity to experience the satisfaction and benefits of using a “green fuel” in their vehicles. They save money at the pump, keep energy dollars in Minnesota, use a product that supports thousands of jobs in Minnesota and drive down greenhouse gas (GHG) emissions.
With respect to GHG emissions, if you are driving a non-flex fuel vehicle manufactured after the year 2000, you can immediately reduce GHG emissions the next time you fill your tank with E15. By using E15 (5% more ethanol compared to regular gasoline) the carbon dioxide emissions drop. The emissions drop because liquid biofuels are made from renewable ingredients that captured, used and stored solar energy. Counting all the inputs used to grow crops, make and transport biofuels and use the biofuel in your vehicle’s engine, the GHG emissions are up to 57% less compared to petroleum gasoline.
How does the use of E15 translate into GHG numbers? If the fuel used in Minnesota during 2013 had contained E15, carbon dioxide emissions would have been pushed down by another 399,161 metric tons. That amount of reduction in GHG emissions by using E15 is equivalent to removing 84,034 vehicles from Minnesota roads for one year. Put another way, that emission reduction from E15 is also equivalent to operating 110 wind turbines, each at 1.94 MW, for one year. In other words, in addition to the economic, consumer and energy independence benefits associated with E15, E15 can contribute in a very profound way to reducing GHG emissions today!
So what can be done about giving more consumers greater access to E15? First, let’s focus on the reality at retail fuel stations. Some who are content with the status quo (that is, petroleum continues to limit consumer choice at the pump), might say it’s too difficult or too expensive for a retail fuel station to make the changes necessary to offer E15. To that comment we would ask, what station are we talking about and what changes are you referring to?
Let’s get the site specific facts before drawing any conclusions. A retail fuel station might already have the proper storage and dispensing system or otherwise be able to offer consumers E15 today. The easiest way to find out is to contact the Minnesota Bio-Fuels Association. Interested fuel retailers can explore whether their station might be an E15 candidate by simply calling Greg at 612.888.9138, ext. 104 and asking about the E15 Project.
One big incremental pathway forward for biofuels and consumers is within reach right now. That pathway is called E15. The Minnesota Bio-Fuels Association can help retailers determine if they are an E15 candidate. E15 can provide retailers with an important addition to their product line up and give consumers the competitively priced high octane fuel that will keep them coming back for more.
As all stakeholders work to make more E15 available to consumers across Minnesota, we are building a solid parallel pathway that will make even higher blends of biofuels available to consumers in the coming years. Maximizing all that can be done with E15 today will provide the solid parallel pathway we can use to give consumers even greater access to higher blends of ethanol and other biofuels.
Meanwhile, the next time you go to your retail station for a fill, look for E15 if you have a non-flex fuel vehicle manufactured after the year 2000. If you don’t find E15, ask for it and give the retailer Greg’s telephone number. By working together, we can do even more to give consumers greater access to renewable biofuels today and tomorrow.
As always, you can direct your questions to me This email address is being protected from spambots. You need JavaScript enabled to view it.