Posts tagged “E15”
We’ve Arrived at the “Blend Wall”
The Energy and Commerce Committee of the US House of Representatives has been holding hearings this week on the Renewable Fuel Standard (RFS). It’s otherwise known as the ethanol mandate, although it covers biodiesel, as well. These hearings are timely, since at least two bills have been introduced to reform or repeal the RFS. During Tuesday’s session Rep. Waxman (D-CA) referred to the “gasoline blend wall, which may be around the corner.” In fact, a review of current gasoline sales and this year’s ethanol target confirms that the ethanol “blend wall” has arrived, at least for some of the nation’s refiners. That explains the urgency of the debate about the future of the RFS.
The blend wall is simply the threshold at which the RFS requires more ethanol to be blended into US gasoline than the quantity necessary to dose essentially all of it with the maximum 10% ethanol content for which most cars on the road were designed. Because the Environmental Protection Agency, which administers the RFS, has been unwilling to exercise its flexibility under existing law, the fuels industry must now choose from a set of unattractive options: It can limit mainstream gasoline to 10% ethanol content and absorb substantial RIN costs (see below) or penalties for failing to blend the required volumes of biofuel. It can produce less gasoline than the country needs, or export more of its production, to reduce its renewable fuel obligations. Or it can produce higher-ethanol blends such as E15 and risk the integrity of millions of cars and large portions of the country’s fuels infrastructure, including all but the newest gas station pumps and tanks. All of these choices affect the price consumers pay at the pump.
(RR edit: Some of you need to turn on your sarcasm detectors).
I just finished reading a story that made my blood boil. It was about how the oil industry is using dirty tricks to keep the ethanol industry in check. I need to sit down, take a deep breath, and make sure everyone knows of the atrocity that has happened in Kansas.
The problem started when the ethanol lobby requested — and subsequently received — a waiver from the Environmental Protection Agency (EPA) that would allow up to 15% ethanol in gasoline blends. The current limit is 10%, which is a problem for the ethanol industry because the mandate in the Renewable Fuel Standard already has the country at the 10% limit. It would be a huge boost to the ethanol industry if that limit was moved up to 15%, because that would increase the potential size of their US market by 50%. CONTINUE»
Our brand new weekly newsletter — Energy Trends Insider — debuted this week. We had stories on the implications of the U.S. corn crop, the state of Cleantech investing, Patriot Coal’s bankruptcy, and the potential of pyrolysis oil.
Interested readers can find more information on the newsletter and subscribe at Energy Trends Insider. To give a flavor for the kind of content, I want to share the story on the situation with the U.S. corn crop and how that can potentially impact upon the domestic ethanol sector. This has been a story that we have been on top of for two weeks; had ETI debuted a week earlier this would have been our lead story which was well before the story received much mainstream attention. In fact, I have not seen any detailed analysis yet on the potential implications of this story — but ethanol futures have moved sharply higher in the past two weeks.
Potential Impacts of Poor Corn Crop on Ethanol Market
By: Robert Rapier
I have long felt that one of the biggest threats to the U.S. ethanol industry is a major drought/crop failure in the heart of corn country. This year we may be experiencing such an event. Recent reports indicate that what had been expected to be a record crop of corn has been downgraded such that only 40% of the corn crop is being classified as in good or excellent condition. This is down 48% versus last week and 69% versus a year ago.
Corn prices are naturally surging in response; current corn prices are 21% higher than they were a year ago. Because so much of the corn crop is devoted to meeting ethanol mandates, there is a potential supply conflict being set up between food producers and ethanol producers.
The Domestic Fuels Protection Act Racket Just classic. According to Consumer Reports, the corn ethanol lobby has introduced legislation that would: “ … leave consumers on the hook for any product damage caused by E15 …Rather than trying to solve the problem of preventing damage from E15 and easing its transition into the marketplace, this bill would simply sweep aside all liability for everyone but the consumer,” That picture of a decomposed gasket is an example of what happens over time when an improperly engineered component meets a corrosive compound at elevated pressures and temperatures. In this case, the compound was coffee in an espresso machine. Click here to see a gasket destroyed by ethanol in a gasoline engine. It’s… Continue»
Were U.S. Taxpayers Subsidizing Ethanol Exports?
Over the past couple of years, U.S. ethanol exports have soared. Last year a news article in Financial Times charged that these exports were being subsidized with U.S. tax dollars. The U.S. ethanol industry strongly denied this, but I wrote several articles on the controversy:
To be clear, it wasn’t the exporting of ethanol that concerned me, it was the idea that taxpayers were potentially subsidizing the practice. Although many ethanol proponents denied it, I said at the time that we would know soon enough, because if ethanol exports fell once the tax credits expired at the end of 2011, that would be strong evidence that exports had indeed been benefiting from those tax credits.
Note how the brightly colored original warning label with easy to read contrasting text first proposed by the EPA on the left has, under pressure from ethanol lobbyists, evolved into a dull, greasy looking sticker replete with small print that should quickly fade even further into the background as it accumulates gas pump grime. This sticker is the backbone of the EPA’s “misfueling mitigation plan.”
Picture a harried low-income parent in a hurry to pick up a kid at daycare before it closes, who has to first gas up their older model car. Assuming this parent even notices the bland warning sticker, their thought process might go something like this; “Here’s the lowest priced gas. Up to 15% ethanol? Sounds like a good deal to me. Not sure what year this car was made …wonder what the fine print says.”
Problem? What Problem? Following my recent post What You Aren’t Being Told About Ethanol and Corrosion, someone made a comment that gets to the root of why many ethanol proponents mistakenly see me as an enemy of ethanol (indeed, one of the Top 10). The person said that if there are problems related to our expanding usage of ethanol, we shouldn’t bash ethanol, we should fix those problems. But how do you fix a problem? First you have to acknowledge that there is a problem. I write articles pointing to issues that I view as problems. The other side often denies the problem, as many did over the ethanol corrosion post. I posted results from an Underwriters Laboratories controlled study… Continue»
Good Ideas Gone Bad History is littered with examples of ideas that seemed to be good for a while, but were later discovered to have unpleasant consequences. The pharmaceutical industry is full of cases of promising drugs that went through testing, received FDA approval, and then when they were rolled out on a large scale were found to have serious side effects. In the energy business, for example, the addition of MTBE to the fuel supply at one time seemed like a good idea. It served as an oxygenate and provided another market for natural gas, but as we now know there were negative consequences. Indeed, it is possible that with the benefit of hindsight, we will decide that hydraulic… Continue»
This week the Environmental Protection Agency (EPA) approved the use of 15% ethanol fuel blends (E15) for 2001-2006 model year cars: EPA Grants E15 Fuel Waiver for Model Years 2001 – 2006 Cars and Light Trucks WASHINGTON – The U.S. Environmental Protection Agency (EPA) today waived a limitation on selling gasoline that contains more than 10 percent ethanol for model year (MY) 2001 through 2006 passenger vehicles, including cars, SUVs, and light pickup trucks. The waiver applies to fuel that contains up to 15 percent ethanol – known as E15. EPA Administrator Lisa P. Jackson made the decision after a review of the Department of Energy’s thorough testing and other available data on E15’s effect on emissions from MY 2001… Continue»
Bob Dinneen wants Congress to extend ethanol tax credits with “a stroke of the pen, a little bit of Whiteout, just change the date.”