Media
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 It was only after the 21st Amendment repealed Prohibition, and when the Great Depression took a toll on farmers and commodity prices, that ethanol became a key component in farm relief and within the fuel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?
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
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.
By Tim Rudnicki, Esq
Minnesota State Agencies’ opaque, top-down approach to future fuels in the transportation sector is very disappointing and dangerous. The Minnesota Pollution Control Agency (MPCA), Environmental Quality Board (EQB) and Department of Commerce are among several branches of State Government either participating in or using the Climate Solutions and Economic Opportunities (CSEO) project to create a new greenhouse gas (GHG) emission reduction policy. By its own reckoning, the MPCA determined in 2013 that the combination of increased vehicle efficiency as well as biofuels helped to significantly reduce GHG emissions in the transportation sector. Now, even with Governor Dayton’s repeated call for efforts to significantly increase the amount of biofuel available to consumers, the MPCA denies ethanol any future role in reducing GHG emissions.
What new finding led the MPCA to reverse its position on the positive role biofuels have played? More importantly, what finding led the MPCA to set a predetermined policy outcome which (1) rejects the future role of ethanol and (2) caps biofuel use at E10 rather than embrace the more significant role biofuels, such as E15 and higher blends, can play in further reducing GHG emissions in the future?
In an attempt to understand the MPCA and CSEO positions on and reasoning about biofuels, the Minnesota Bio-Fuels Association (MBA) launched repeated agency information requests over a two month period of time. Eventually MBA was provided with a spreadsheet. The spreadsheet contains inaccurate information and assumptions about Minnesota’s petroleum replacement law, transportation fuel use and questionable lifecycle GHG calculations. MBA’s follow up information requests to agencies were met with advice from a project facilitator to participate in a webinar session which purportedly was to allow for information exchange. Instead, the webinar was limited to accepting written participant questions which were screened by the Environmental Quality Board.
The lack of transparency in the CSEO process was especially evident as the CSEO presenter attempted to over simplify and compartmentalize complex social, economic and environmental issues. One written question read to the CSEO presenter asked: by what amount can E15 reduce GHG emissions compared to E10 (regular unleaded gasoline)? Without any explanation regarding the variables in the equation, the CSEO presenter provided the answer - zero.
This lack of transparency by CSEO regarding models, variables and assumptions is at odds with the rest of the scientific community. And this flawed CSEO process threatens to derail the progress Minnesota is making as it reduces GHG emissions in the transportation sector. With respect to biofuels such as ethanol, there exists a vast body of knowledge and scientific information about the entire GHG lifecycle for ethanol including, for example, upstream and downstream emissions associated with growing renewable ingredients, biorefining and actually using biofuels, such as E15, in motor vehicles.
What are the facts? What does science tell us, rather than an opaque agency top-down process, about E15 (15% ethanol, 85% gasoline)? As reported on February 16, MBA checked with Dr. Steffen Mueller, principal research economist at the University of Illinois at Chicago, about E15’s potential to reduce CO2 emissions. He informed us that a gallon of E15 saves 1.26 g of CO2 equivalent (CO2e) per megajoule over regular E10 (gasoline that contains 10 percent ethanol). CO2e includes carbon dioxide, nitrous oxide and methane. Further, according to Mueller, should all 2.4 billion gallons of gasoline consumed annually be converted to E15 from E10, CO2e savings in the state would total 358,000 metric tons annually. Using the U.S. Environmental Protection Agency’s greenhouse gas equivalencies calculator, this would amount to eliminating 75,368 passenger vehicles from Minnesota’s roads annually.
To the MPCA, EQB and Energy Division in the Department of Commerce we ask, what part of the science do you question? Let’s have that conversation with scientists, not project facilitators. How many more meetings do we need to have in an attempt to more fully inform the CSEO process when the process is actually closed to the facts and science? Given the GHG emission reductions called for in Minnesota law and knowing E15 can be part of the solution by immediately reducing GHG emissions, when will Minnesota State Agencies reject the flawed CSEO process and allow the science on biofuels and GHG emission reduction to enter into the analysis?
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 Timothy J. Rudnicki, Esq
A growing number of consumers are coming to expect E15 at all their favorite retail fueling stations and have concerns when they can’t find E15. Generally, those concerns are called into the Minnesota Bio-Fuels Association with the callers prefacing their questions like this: I have been using E15 for the last six months because I am saving money at the pump, I know the higher octane is good for my engine, I feel good about using a renewable fuel, but what do I do if I can’t find E15?
We appreciate your inquiries. The question about “what to do when E15 is not available” signals to us that consumers really do care about the type of fuel they use in their vehicles. To the questioners, we now have two answers for you. First, if you’ve been using E15 for your 2001 or newer vehicle but can’t find it near you, ask your neighborhood retailer to carry E15. The Minnesota Bio-Fuels Association can help these retailers, wherever they are in Minnesota, learn about E15 and assist them in taking the necessary steps to begin dispensing it.
Second, to all those who would like to see even greater access to and availability of E15, call your legislators and ask them to support the E15 Dispenser bill which has been introduced in both houses of Minnesota's state legislature (Senate File 1912 and House File 1904). This bill can pave the way for E15 to be made widely available throughout Minnesota.
Among the key components of the bill is to address issues currently faced by retailers interested in offering E15. As it stands, there is an information void with regards to consistent, reliable and accurate technical information regarding fuel storage and dispensing systems when it concerns E15. Moreover, in some cases, there are retailers that only need to make a few simple changes to their fuel dispenser to offer E15. The E15 Dispenser Bill will streamline the process and make it easier for retailers to carry E15.
Some 300, or 10 percent, of fuel retailers in the state will be partnered with under the first phase of the E15 Dispenser bill and once these stations begin offering E15, we will make a significant step towards reducing statewide greenhouse gas emissions.
When E15 becomes the new regular fuel in Minnesota, annual CO2 equivalent emissions will be reduced by 358,000 metric tons (equivalent to removing 75,368 passenger vehicles form Minnesota's roads for a year). Moreover, under the E15 Dispenser bill, consumers stand to save between $7.6 million to $10.9 million at the pump as E15 is generally priced 7 to 10 cents lower than regular unleaded gasoline.
Minnesota legislators recognize that more and more of their constituents would like access to E15 because it’s a high-octane fuel (88 octane rating) that reduces greenhouse gas emissions and prices at the pump. But to ensure passage of this bill and deliver this victory to all Minnesotans, be sure to voice your support for Senate File 1912 and House File 1904. For more details, please contact me This email address is being protected from spambots. You need JavaScript enabled to view it..
By Timothy J. Rudnicki, Esq
Telephone calls and email messages to Minnesota legislators from supporters of ethanol, energy independence, consumer savings at the pump and environmental benefits are helping to move a bill at the legislature. As was reported to you in the last newsletter, some 300, or approximately 10 percent, of fuel retailers in Minnesota could be partnered with under the first phase of the E15 Dispenser bill if it is fully funded. When those fuel retailers begin offering E15 and displacing more carbon intensive finite fossil fuel, Minnesotans will make even more progress in fulfilling the Minnesota petroleum replacement law as well as statewide efforts to reduce greenhouse gas (GHG) emissions.
Minnesota House File 1904 and Senate File 1912 are now in the next to last phase of the legislative process. In the next few days, a Conference Committee will be named to work out the difference in a tax bill which includes provisions and funding to help fuel retailers make E15 available to thousands more Minnesotans. Some of the benefits to Minnesotans by having E15 broadly available include reducing annual carbon dioxide equivalent emissions by 358,000 metric tons (equivalent to removing 75,368 passenger vehicles form Minnesota's roads for a year). And under the E15 Dispenser bill pilot project, consumers stand to save between $7.6 million to $10.9 million at the pump as E15 is generally priced 7 to 10 cents lower than regular unleaded gasoline.
The House and Senate Conferees who will determine whether the E15 Dispenser bill moves forward are expected to be named within the next few days. We will continue to track and monitor the progress of the bill. Once the Conferees are named, the Minnesota Bio-Fuels Association will make an announcement. You will be able to use that information to contact Conferees and remind them about your support for the provisions needed to make more E15 available to consumers across Minnesota.
We are close to a victory for Minnesotans who want more clean, renewable ethanol, greater energy independence, savings at the pump and the environmental benefits that come with Minnesota grown biofuels. For more details, please contact me This email address is being protected from spambots. You need JavaScript enabled to view it..
By Timothy J. Rudnicki, Esq
What the U.S. EPA does, sometimes, so does the Minnesota Pollution Control Agency (MPCA). At present, that means keeping the blinders on with respect to the science centered on E15 and its compatibility in fuel storage and dispensing systems. Unfortunately, the failure of Agencies to keep the focus on science also means restraining E15 from having widespread access in the marketplace even though E15 is a least cost method by which to immediately reduce greenhouse gas (GHG) emissions. To both the U.S. EPA and MPCA, I say, tear down those blinders and be open to empirical evidence.
Lately, at some White House briefings, the United States military has been underscoring the national security challenges presented by the continuing rise in GHG emissions and the concomitant climate change. The military, however, is also underscoring its expanding use of biofuels to provide a renewable source of energy for its operations and to decrease GHG emissions. What’s striking about this latest focus on biofuels by the U.S. military is its robust support for biofuels so as to reduce emissions of climate changing gases.
While the military’s focus on the GHG benefits of biofuels might come as a surprise to some, the GHG benefits of biofuels have been well studied and documented for more than a decade. To make the GHG benefits of ethanol a bit more parochial, if all the spark ignition engine transportation fuel (Regular gasoline with 10% ethanol) used in Minnesota were E15 rather than E10, we could cut annual GHG emissions by an additional 358,000 metric tons.
Another, but perhaps less practical, way to achieve the same reduction in GHG emissions is to pull slightly over 75,300 vehicles off Minnesota roadways for a year. Still another way to look at the GHG benefit E15 can provide is to recognize it would take at least 98, two megawatt wind turbines a year to displace the same amount of GHG emissions that E15 can displace in 2001 and newer motor vehicles on the road right here, right now.
So what are we waiting for? Why is the U.S. EPA and MPCA fixated on perpetuating the fictitious blend wall by restraining consumer access to E15 and maintaining the status quo for carbon intensive, finite fossil fuels? After sitting through hours of meetings with the MPCA, one reason for delay is because some agency staff think and feel that E10 is an illegal fuel and that E15 will start seeping out of all the underground storage tanks, pipes and dispensers. Perhaps those are good thoughts and feelings to have and from which to begin ascertaining the facts, but we need to ask, again, are those thoughts and feelings based on science, the evidence?
To better understand the science and evidence, we can turn to a new National Renewable Energy Laboratory (NREL) report released in May 2015, entitled E15 and Infrastructure (the “Report”). Here are some key findings in the Report:
"It is often stated that tanks cannot be used to store E15, but this assumption is incorrect as the majority of installed tanks can store blends above E10. For many decades, underground storage tank (UST) manufacturers approved their tanks for blends up to E100…"
"…there are UL (Underwriters Laboratories) testing standards available now for all gasoline–ethanol blends from 0% to 85% ethanol… Certain equipment types are typically UL listed—these include tanks, pipes, dispenser, hanging hardware, submersible turbine pumps, and shear valves."
"A review was conducted with each manufacturer to determine compatibility with ethanol blends. There is an extensive list of E15 and E15+ compatible equipment available in the appendices."
With respect to E10, the Report examined literature from the past 15 years to find out if “…there were any negative impacts during the multi-year deployment of E10 nationwide” and, based on extensive research, determined that “No incidents of E10 causing releases (also referred to as leaks) from UST systems were identified. None of the reviewed literature noted any association between E10 and any specific UST release. The EPA OUST’s Performance Measures’ data on UST releases were reviewed, and as E10 was deployed nationwide, the trend was fewer UST releases.”
Once again, the Agencies have put the burden of proof on E10 and E15. And E10 and E15 have met that burden and demonstrated, once again, they are effective and compatible with most of the fueling infrastructure. To the Agencies, now you have more evidence to support the facilitation of widespread access to E15. Now is the time to allow E15 to thrive in the marketplace so consumers can save at the pump, we can displace more carbon intensive petroleum and we can further drive down GHG emissions by using more homegrown, renewable biofuels.
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By Timothy J. Rudnicki, Esq
For those who take up reading the Federal Register from time-to-time, you might have noticed the 53 pages from June 10, 2015, dealing with the Renewable Fuel Standard and the proposed Renewable Volume Obligations. The U.S. Environmental Protection Agency (EPA), in short, provides a host of excuses for not keeping on track with the volume requirements set forth in the Renewable Fuel Standard which is the law of the land. Rather than working with stakeholders to fully implement the law, the EPA, by their own words, capitulate to the petroleum industry.
Consider this from the EPA: “...we have seen analysis concluding that the ambitious statutory targets in the Clean Air Act exceed real world conditions.” And the EPA, in its Regulatory Announcement, goes on to cite, for instance, its consideration of factors such as the market and infrastructure. Unfortunately, the EPA is blinded by the blend wall, this notion that the market can only handle 10% ethanol at the most.
Last Thursday, June 25th, at least 200 people descended upon Kansas City, Kansas to help the EPA see the real “real world conditions.” What if the EPA had considered the latest study showing that virtually all the fuel storage and dispensing equipment is compatible with E15, which has been the new regular fuel since 2012? That’s at least 15 billion gallons of ethanol. What if the EPA had acknowledged that some states, like Minnesota, are relying on stability in the interpretation and application of the law as it invests in making more renewable biofuels available to Minnesotans?
The Minnesota Bio-Fuels Association did its part to help the EPA get a better grasp of the real world. Perhaps the EPA will seriously consider the input from, and collective wisdom of, all those who testified last week and reach a new conclusion: drop the proposal to deviate from the Renewable Volume Obligations in law because they are just right and it’s the law.
Testimony on the Renewable Fuel Standard
U.S. Environmental Protection Agency Hearing - RFS Proposal
Kansas City, Kansas
June 25, 2015
Delivered by Timothy J. Rudnicki, Esq
Executive Director
Minnesota Bio-Fuels Association
We must not make a scarecrow of the law,
Setting it up to fear the birds of prey,
And let it keep one shape, till custom make it
Their perch and not their terror. – Shakespeare, Measure for Measure, Act II, Scene 1, 11.
The United States Environmental Protection Agency’s proposed Renewable Volume Obligations come nearly 412 years after Shakespeare wrote those words in “Measure for Measure”. Here is the connection to the situation we face today.
Congress, after much deliberation, crafted the Renewable Fuel Standard. It has been the law of the land for eight years. It was established with the unequivocal purpose of moving us, as a Nation, away from finite, carbon intensive fossil fuel petroleum and onto a changing, incremental pathway toward greater use of biofuels made from renewable ingredients.
The EPA’s consistent refusal to fully adhere to and implement the black letter Renewable Volume Obligations has given the Renewable Fuel Standard one shape, the shape of a bogus, fictitious blend wall which has become the petroleum industry’s perch rather than its terror.
While the EPA cites lack of infrastructure as an excuse to backslide on the Renewable Volume Obligations, the Agency ignores reality and sends a conflicting message to stakeholders in the fuel supply chain. The EPA, however, can get it right this time: adhere to the law and reckon with the infrastructure facts in the field.
According to findings from the National Renewable Energy Laboratory most existing fuel storage and dispensing infrastructure can already handle up to a 15% blend of ethanol and 85% petroleum gasoline. Nearly nine out of 10 light duty vehicles on the highway can use the additional 5% ethanol in E15, or what has been the new regular fuel since 2012. But here we are today. The EPA has the opportunity to get it right and we all have the opportunity to replicate effective models to get the job done.
Using the results of independent studies and with the expectation that the EPA will uphold the Renewable Volume Obligations, Minnesota Legislators worked to craft a bill to introduce an additional 160 million gallons of ethanol into the fuel supply chain. Governor Dayton recently signed the bill into law to assist a limited number of retailers in making appropriate low-cost adjustments to their fuel dispensing equipment so they can offer E15 to their customers.
This action, especially if replicated across the United States, will help to meet or exceed the Renewable Volume Obligations and provide significant environmental benefits. Dr. Mueller with the University of Illinois at Chicago determined that the additional 5% ethanol in the Minnesota fuel supply alone will further reduce greenhouse gas emissions by 358,000 metric tons annually. That’s equivalent to taking approximately 75,368 vehicles off the roadways for a year.
To sustain this progress, to the EPA we say: change your custom and practice, don’t roll back the Renewable Volume Obligations this time. Instead, maintain and enforce the Renewable Volume Obligations in the law. EPA’s adherence to the law will give all of us the certainty we need in Minnesota and across this Nation to continue making the necessary local policy and equipment adjustments to fulfill the letter and intent of the Renewable Fuel Standard.
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
The Minnesota Bio-Fuels Association, just as did many individuals and organizations, submitted comments to the United States Environmental Protection Agency (EPA) last week. In preparing to submit comments, we reviewed the EPA proposed rule found in the Federal Register (FR), Volume 80, No. 111, starting at page 33100. While this might not come as a surprise to anyone reading this column, the EPA, in its proposed rule, did use the phrase “blendwall” and "E10 blendwall" on more than one occasion. What is surprising, however, is the EPA's continued backward looking assessment of total consumption capacity for renewable biofuel.
For instance, the EPA entirely dismisses the role E15 is playing, and will grow to play, in exceeding the Congressional volume targets set forth in the Renewable Fuel Standard (FR at 33126). The EPA, instead, fixates on the old regular E10 and stops its calculations there. From a Minnesota perspective the Energy Information Administration (EIA) reports indicate we are at the 12.2% level of ethanol use. Rather than looking in its rear view mirror where it will only see E10, the EPA ought to look outside and just up ahead.
Did the EPA see, to the side and ahead, the recent report from the National Renewable Energy Laboratory (NREL)? Findings from NREL indicate that virtually all the existing components currently used to store and dispense fuel is compatible with and capable of handling E15, the new regular unleaded fuel. Or did the EPA notice that nearly nine out of 10 vehicles on the highway can use E15? With data provided by the EPA and doing some math, it seems the national E15 annual consumption capacity is close to at least 18.5 billion gallons for each of the next few years.
Interestingly, the EPA segments biofuel consumption capacity by FFVs and everything else. At page 33128, the EPA states: "With regard to E85, according to EIA there will be about 16 million FFVs in the in-use fleet in 2016 with a total consumption capacity of about 14 billion gallons of E 85." The EPA then goes on to discuss market access issues for FFVs, considers potential consumption if at least 5% of FFVs had access to E85 and notes that the "vast majority of vehicles are within reasonable range of more than one retail station on typical trips." Aggregating FFVs and, for example, all the 2001 and newer light duty vehicles which can use E15, the annual total consumption capacity is 32.5 billion gallons.
Does aggregation provide the EPA with another perspective by which to come to the conclusion that it ought to enforce the RFS as written by Congress? Perhaps the totality of the many thoughtful comments that were submitted to the EPA will provide the Agency with the type of public comments which the Agency can use to conclude it ought to comply with and enforce the Renewable Fuel Standard.
What do you think about aggregation or other parts of the EPA proposed rule? 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
In the June newsletter we shared with you the good news about the E15 Dispenser Law. Minnesota Legislators and Governor Mark Dayton understand the way biofuels, such as ethanol, help Minnesotans, strengthen our energy security and economy and improve our environmental quality. They also understand that Minnesotans will only be able to realize these benefits if those who seek a lower priced, higher octane fuel for their 2001 or newer vehicles actually have access to E15.
The outcome of the legislative process is a law which is aimed at helping retailers, with 15 or fewer stations, maximize the potential of their existing fuel dispensing systems so they can offer E15. This law has a very clear focus and narrow scope. At this time, Minnesota Bio-Fuels Association is working with the Minnesota Department of Agriculture and other stakeholders to take the elements of the law and put them into a program format which will be meaningful to and useful for the men and women who make the decisions about their product offerings and actually operate the fuel dispensers.
Based on the feedback we have received from fuel retailers throughout the metro area and across Minnesota, we expect high demand for the E15 program. We will keep you posted on its progress and availability.
On a related environmental matter, a number of you have inquired about the carbon reduction associated with adding another 5% ethanol to regular E10. Our first report on this issue was based on information provided by Steffen Mueller, Principal Research Economist with the University of Illinois at Chicago. In brief, adding 5% more ethanol to regular gasoline sold in Minnesota will help reduce carbon dioxide emissions by another 358,000 metric tons annually. Put another way, this carbon offset is equivalent to removing approximately 75,368 vehicles from Minnesota’s highways for a year. Using the same U.S. EPA GHG equivalency calculator, the additional carbon offset from E15 is like running 98 wind turbines each rated at an output of two megawatts. To realize these environmental benefits, however, we must make more E15 available in the marketplace. And the E15 program will be a great step forward.
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 Timothy J. Rudnicki, Esq
The recent release of the Clean Power Plan has started to spawn community gatherings and agency presentations. Stakeholders are being called upon to help inform a regulatory process which will produce a custom Minnesota plan aimed at further reducing greenhouse gas emissions. Unfortunately, already some agency officials and community leaders are redefining what constitutes renewable energy.
In the most recent gathering I attended solar gardens was the focal point. Why not? Photovoltaic systems can be used to capture solar energy and convert it into electricity that can be used to, for example, light and power our homes, schools and places of work.
Another renewable that received some attention was wind energy conversion systems. Sure, wind turbines connected to generators capture another form of solar energy and convert it into electricity which we use throughout our communities.
And where are biofuels in the presentation? Most of us use biofuels, such as ethanol, to power the vehicles which move us from place-to-place. As we know, plants capture and use solar energy which can be converted into ethanol.
One might have concluded from the one-way communication event that it was geared toward an urban audience who could only relate to community solar gardens rather than farmers and farming. But then, during what was supposed to be the lighter comedic part of the program, the underlying reason for excluding biofuels became evident: ethanol was characterized as big industry, evil and on par with the dirty, carbon intensive tar sands.
This type of misinformation, even when veiled as comedy, carries the risk of undermining efforts for us as a community and state to make further progress in reducing greenhouse gas emissions. Interestingly, the very benefits the urban community leaders seek from solar gardens are those offered by ethanol:
- Locally produced (biofuels are made from renewable ingredients grown in Minnesota),
- More local control over energy supply (twenty-one biofuel producers are located in Minnesota),
- Economic development (in 2014 Minnesota’s ethanol producers generated $7.6 billion in gross sales for Minnesota businesses and supported 18,630 full time jobs. This in turn generated $1.74 billion in household income in Minnesota as well as $132 million to state and local government tax rolls. And the need for biofuels is growing.)
- Cleaner air (ethanol reduces toxic tailpipe emissions) and reduce greenhouse gas emissions (E10 already displaces approximately 750,000 metric tons annually and greater availability of E15 can increase that number to 1.07 million metric tons). Check out this short video for more details.
While some might like to redefine renewable so as to exclude biofuels, federal and state law is clear that biofuels are to be counted among the renewables.
The Renewable Fuel Standard, for instance, states:
Renewable fuel is “fuel that is produced from renewable biomass and that is used to replace or reduce the quantity of fossil fuel present in a transportation fuel.” Whether ethanol is produced from renewable corn starch, stover or other biomass, it is indeed a renewable. The law makes this clear. And it should be self-evident that growing plant material is renewable. After all, where do the raw ingredients come from to make the things that we use in our daily lives or that power our vehicles? One source of supply are those ingredients which are grown.
We at the Minnesota Bio-Fuels Association will continue to do our part to inform community leaders and agency officials about the increasing role that biofuels, such as ethanol, can play in boosting the economy, enhancing energy security, saving consumers money at the fuel dispenser and reducing greenhouse gas emissions. We also ask that you help us. I invite you to share this video with your colleagues and community leaders. Let’s continue the dialogue and remind people that biofuels are indeed renewable and that renewable biofuels hold the potential to reduce greenhouse gas emissions right here, right now.
As always, I look forward to This email address is being protected from spambots. You need JavaScript enabled to view it. from you.
By Timothy J Rudnicki, Esq
In the 16th century, Nicolaus Copernicus dared to challenge the accepted notion that the earth was at the center of the universe. Using his powers of observation, without a telescope (it was another 50 years after his death when Galileo would have a telescope and validate the Copernican model), and relying upon his knowledge of mathematics, Copernicus postulated that it is the sun, rather than the earth, which is at the center of our universe (solar system). Who, today, given the scientific evidence we have, would suggest the earth is at the center of our universe?
We humans, whether we work for federal agencies or biofuel producers, sometimes try our best to interpret the world around us with the tools available to us. The issue is whether we do the analysis with our gut or intellect, capitulate to our bias or use scientific findings and analysis. This short excerpt from a NASA teaching module provides some perspective about a preconceived notion and the role of science:
The earth was considered the center of the universe because the leading theory about this at the time came from the Greek astronomer Claudius Ptolemy in about 140 A.D. In this theory, the earth was at the center of the universe, and the sun, the moon, the planets and stars orbited the earth.
The center of the universe remained at the center of the earth, in the view of the majority of the scientific community, until the 1500s. Occasionally there were those who suggested otherwise, the most famous of which is Aristarchus of Samos, a Greek scientist well-ahead of his time, but he, unfortunately, was not taken very seriously for very long.
The successful challenge to the earth-centered universe was begun by the Polish Astronomer Nicolaus Copernicus in 1543. In his book De Revolutionibus, he argued that the Sun was at the center of the solar system (and hence universe), and that the planets - including the earth - revolved around the sun. This heliocentric theory provided a conceptually simpler explanation for certain peculiar `retrograde' motions of the planets than the Ptolemaic geocentric theory but encountered stiff resistance from those who felt it was heretical to move humanity so far from the center of the universe. http://apod.nasa.gov/htmltest/gifcity/cs_lplan.html
Keep in mind that it was only in the 1930s when humanity gained the understanding, thanks to Hubble, that the universe is actually expanding. So, we keep on learning. But what do we do with this knowledge, whether it’s about the universe or biofuels?
With respect to biofuels and the RFS, the EPA has at least two solid arguments for aggressively enforcing the Renewable Volume Obligations (RVOs). First, plain and simple: it’s the law. The RFS is unequivocal about the number of gallons of renewable biofuels which are to displace finite, carbon intensive petroleum. The public policy purpose is clear - displace petroleum with renewable biofuels to improve environmental quality, reduce dependence on oil and keep more energy dollars at home.
Another argument the EPA has to aggressively enforce the RVOs is found in science. While there are many knee-jerk reactions to the term biofuels, the science is clear: ethanol from biomass such as corn starch is 44% up to 57% fewer greenhouse gas emissions compared to petroleum gasoline. Argonne National Laboratory has done an extensive analysis of the upstream and downstream GHG emissions associated with ethanol from a variety of renewable feedstocks.
In addition to the legal, policy and scientific arguments for the use of more biofuels, there is an important local and regional economic factor. The Minnesota biofuel producers I know actually live near their biofuel production plants. Many who work in the plants live nearby and use their income to support themselves and their families. All the consumer, economic, energy independence and environmental benefits are really straightforward - biofuel producers use locally grown renewable ingredients and a biological process just like that used to brew beer. Biofuels mean real energy independence and economic growth because the fuel is homegrown and more energy dollars stay in Minnesota.
Perhaps in Copernicus’ time it was difficult for the establishment to change its views. Over the last 400 years we have learned much more about our place in the world and the universe. And we have learned a great deal more about the science surrounding biofuels and the economic and environmental benefits. We are not asking the EPA to wrestle with an issue as profound as the heliocentric theory. We simply ask that the EPA comply with the RFS and acknowledge the scientific findings about the way biofuels, such as ethanol, can right here, right now, reduce GHG emissions. EPA, for the well-being of current and future generations, let renewable biofuels displace petroleum - comply with and enforce the RFS.
As always, you can forward your questions to me This email address is being protected from spambots. You need JavaScript enabled to view it.
By Timothy J Rudnicki, Esq
One law which touches the lives of virtually every person in the United States is the Renewable Fuel Standard (RFS). The RFS touches those who fuel their vehicles with renewable ethanol and those who have built and continue to sustain the biofuel industry as well as all of us who benefit from the reduced carbon emissions due to the use of renewable biofuels like ethanol. In the next few days we will know whether the EPA plans to uphold the RFS. At the least, the EPA should uphold the RFS because it is the law and for a host of social, economic, energy security and environmental reasons.
In Minnesota alone the biofuel industry supports approximately 18,600 jobs. These jobs are filled by women and men who support their households. In practical terms, biofuels help real Minnesotans pay the bills and, for example, send their young adults on to higher education and generally do those things which accompany a higher quality of life made possible by biofuels such as ethanol.
On an even more macro level, biofuels in Minnesota contributes about $1.74 billion in annual household income. And along with that are the $132 million paid in taxes. In addition to the social and economic benefits provided by the ethanol producers in Minnesota there are the tangible environmental benefits.
Annually, renewable ethanol is displacing 712,000 metric tons of greenhouse gas emissions in Minnesota. For Minnesota, the use of E15 in place of E10 would serve to displace another 358,000 metric tons of greenhouse gas emissions. The additional GHG emission reduction potential has the same carbon reduction value of removing 76,000 vehicles from the highways in Minnesota.
The RFS is also about consumer value and energy security. Just a few days ago E85 was selling for 62 cents less than regular and E15 has consistently been approximately 10 cents less than regular. And every gallon of renewable biofuel produced in Minnesota is one less gallon of fuel we need to import from the tar sands and overseas.
To uphold the RFS because it is the law should be self evident to the EPA. If the EPA requires additional reasons to justify doing that which is required under the law, consider the full scope of energy security, consumer, economic and environmental benefits the RFS has provided and the many more it has yet to provide under full implementation of the law. All of us are counting on the EPA to do what is right and expect the agency will do so.
As always, you can forward your questions to me This email address is being protected from spambots. You need JavaScript enabled to view it.
By Timothy J Rudnicki, Esq
Despite EPA’s proclamation that it considered many public comments regarding the proposal to lower the Renewable Volume Obligation numbers, the Agency somehow missed the most important comment: enforce the law.
Based on the final rule, it seems the EPA also missed a few other critical public policy and environmental factors. In the 202 page final rule, the EPA reminds us “The fundamental objective of the RFS provisions under the CAA is clear: to increase the use of renewable fuels in the U.S. transportation system every year through at least 2022 in order to reduce greenhouse gases (GHGs) and increase energy security.”
And the executive summary to the final rule goes on to state “Renewable fuels represent an opportunity for the U.S. to move away from fossil fuels towards a set of lower GHG transportation fuels, and a chance for a still-developing low GHG technology sector to grow. These lower GHG renewable fuels include corn starch ethanol....”
In short, the EPA affirms that ethanol, whether conventional or advanced, is a lower GHG transportation fuel. The obvious conclusion which should follow from the EPA restatement of the RFS purpose and the unequivocal statutory volumes is straightforward: (A) enforce the volume numbers to send a message of certainty to biofuel producers so they can continue to grow the sector and (B) push the petroleum industry to give consumers more biofuel options so as to reduce GHG emissions now.
The final volume numbers, without doing a RIN analysis, look like 10% of the actual and projected overall growth for gasoline consumption. While some debate whether the EPA actually did push through the mythical blendwall, we should not loose sight of the fact the actual consumption capacity for biofuels (E85 for Flex Fuel Vehicles, E10 and E15 for 2001 and newer vehicles) with the current fuel dispensing infrastructure is well above 27 billion gallons. In other words, the 15 billion gallon number for conventional biofuels is indeed feasible. For details on the consumption capacity issue, see the EPA reference to the Energy Information Administration in the Federal Register at 33128.
The intent of the RFS is indeed to stimulate and drive change, a move toward greater use of renewable biofuels. In a Nation that has been dominated by petroleum and consumers’ limited access to biofuels for many decades, the RFS provides some modicum of certainty for those who are responsible for making biofuel production investment decisions and giving consumers greater access to renewable biofuels.
Unfortunately, the EPA missed the obvious. The Agency failed to comply with and enforce the black letter law and has thereby put off greater systemic change for another day. Given the clear purpose, intent and demonstrated effectiveness of the RFS thus far, the EPA decision also sends the wrong message to conferees at the Paris Climate Convention as well as investors, the environmental community, those diligently working to tamp down GHG emissions and the petroleum industry.
Digging into the numbers a bit further, we find the RFS set unequivocal volumes for renewable biofuels (conventional and advanced) to be used starting in 2006 and extending out to the year 2022. The total renewable fuel level set in law for 2014 is 18.15 billion gallons which includes at least 14.4 billion gallons as conventional biofuel. Since 2014 is history and RINs have been generated, EPA set the number at 13.61 billion gallons.
While 2015 is not yet history, according to the EIA the overall consumption of gasoline is up. The RFS explicitly calls for 20.5 billion gallons of biofuel to be used with at least 15 billion gallons as conventional. Instead, the EPA set the conventional number at 14.05 billion gallons, essentially mirroring 10% of the overall increase in gasoline consumption. If gasoline consumption were to drop below projections, would the EPA enforce the final rule or find some reason to adjust the number down to once again accommodate the petroleum industry?
Finally, for 2016, the RFS states the number of gallons of renewable fuel to be used is 22.25 billion with at least 15 billion gallons of conventional biofuel. In place of the statutory provision, the EPA used its version of the biofuel future by setting the number at 14.5 billion gallons.
When one considers the history and legislative intent behind the RFS, the EPA’s final rule flies in the face of the law and sets another dangerous precedent. In 2005, the Energy Policy Act (RFS1) put key stakeholders on notice that renewable biofuels were to have more space in the transportation fuel market. Then, in 2007, RFS2 provided a second explicit notice and clear requirements along with methods by which affected parties could comply with the statute. Biofuel producers responded by committing financial and logistic investments to make the production capacity available. On the other hand, the petroleum industry clung to the habits of the past buying RINs rather than facilitating greater consumer access to E15 and higher blends.
It will take some more time to fully assess the immediate implications of the EPA’s backsliding. Meanwhile, a few preliminary observations can be made at this time. The EPA missed the obvious purpose, intent and statutory provisions in the law. Consequently, the EPA missed the opportunity to send a signal to the petroleum industry: consumers can indeed expect more biofuel options at the fuel dispensers and the industry must comply with the law.
Finally, the EPA missed a rare opportunity to stick to the law, as the RFS was written by Congress years ago, for President Obama to present to the Paris Climate Conference. The RFS should still be held up as one of the most constructive and effective models for what can be done to reduce GHG emissions from the millions of vehicles that are, and will be, part of the rolling stock for many years to come.
Despite the EPA decision, we will continue to stand strong together and find ways to push past the EPA’s failure to fully enforce the RFS. We will find creative ways to deploy the USDA Biofuel Infrastructure Partnership and the Minnesota E15 Dispenser grant programs to help fuel retailers give consumers greater access to more biofuel options. Through these actions we will build increased energy security, continue to boost the economy and further reduce GHG emissions.
By Timothy J. Rudnicki, Esq
In 2015, additional new actions were taken and successfully implemented to further pave the way for greater availability and access to clean, renewable biofuels such as ethanol. These actions are important because for Minnesotans, it means greater energy independence, a stronger rural economy by using locally-grown renewable ingredients produced and processed in Minnesota, consumer savings at the fuel pump, and further reductions in climate-damaging carbon dioxide emissions. Looking ahead at the biofuels industry in Minnesota can be placed in these three categories.
Where and How Biofuels Are Produced
Lifecycle greenhouse gas (GHG) emissions from ethanol are up to 57 percent less than gasoline. But on top of that, Minnesota's 21st century biofuel producers have continued to make significant strides in further reducing the amount of energy and water used to make a gallon of ethanol. For example, producers are now using more energy efficient processing equipment and reusing stormwater and municipal wastewater.
In fact, another one of our plants recently announced a major modernization and expansion plan to build on the succeses of the past and maximize the best available technology for today and the future. We can expect to see more our producers undertake more innovative measures to improve efficiency in 2016 to responsibily produce a clean, low carbon fuel for Minnesota drivers.
Greater Availability of Biofuels for Consumers & Fleet Operators
In the past 18 months, we have reached out and directly engaged with 2,500 fuel retailers in the state as well as fuel retail networks in the region, which comprise some 2,700 fueling stations. Based on our findings, most fuel retailers are seeking to diversify their product offerings by replacing typical midgrade fuels with E15 - a fuel that can be used by almost all cars on the road and will be required by the next generation of fuel efficient, high-compression engines.
In 2016, we will see a significant increase in the availability of E15. Independent research has shown that 85 percent of fuel retailers already have fuel storage and dispensing components that are compantible with E15. And thanks to the vision and leadership of Gov. Mark Dayton and the Minnesota Legislature, funds were made availble to assist a few hundred fuel retailers to make minor modifications to dispense E15. This funding has now been augmented by a $8 million grant from the USDA under its Biofuel Infrastructure Partnership program. In total, this funding will enable up to 165 stations to offer blends like E15 and E85 to consumers.
Increasing the availability of E15 in the market as the new regular fuel are far reaching. We can replace millions of gallons of carbon-intensive, finite fossil fuel (including dirty tar sands oil). All vehicles 2001 and newer will immediately benefit from the higher octane and produce fewer GHG emissions.
According to Dr Steffen Mueller from the University of Illinois at Chicago, CO2 reduction in Minnesota from making E15 the new regular (on top of the amount of CO2 already eliminated from E10) would be 1.07 million metric tons annually. This, according to the EPA's greenhouse gas equivalenceis calculator, is the same as removing emissions from 225,895 vehicles from Minnesota's roads annually.
Just as consumers are asking for a cleaner fuel, so too are state fleet vehicle managers and other leaders in local government. In cooperation with these fleet managers and the Minnesota Department of Administration, for 2016, we can expect to see E15 usage increase in state fleet vehicles which will meet their GHG reduction goals.
The Future Is Today
In the last few days, I read news that a major vehicle manufacturer has produced a non-flex fuel vehicle that is approved to use up to E25. We plan to further investigate details of this vehicle and its engine and will report our findings back to you soon. But on its fact, this news is very promising as it confirms what we've heard for years : new fuel efficient, high-compression and low emission engines perfom the best with fuels with higher ethanol content.
To sum up, the Minnesota biofuels industry is delivering on many fronts - energy security, economic, consumer and environmental benefits - and is positioned to do more in 2016. This broad scope of benefits will grow and expand to further serve all Minnesotans as more biofuels will displace a greater amount of fossil fuels and reduce even more GHG emissions. For the vast majority of people who continue to rely on vehicles with an internal combustion engine, ethanol will continue to be the biggest factor in reducing harmful emissions.
Thank you for your support in 2015 and we look forward to your continued involvement in 2016.
Happy New Year!