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Energy Tomorrow Blog

More Voices in the RFS Debate

diesel  ethanol  gasoline  renewable fuel standard 

Mark Green

Mark Green
Posted March 26, 2013

The biofuels/ethanol debate has moved over to National Journal’s Energy Experts Blog, with this week’s posts addressing whether the Renewable Fuel Standard (RFS) that mandates biofuel use should be left alone, amended or repealed. Some of what others are saying:


Bernard Weinstein – associate director of SMU’s Maguire Energy Institute:

“The biofuels mandate has done little or nothing to enhance America’s energy independence or security. Oil imports have dropped dramatically over the past five years, from 60 percent of consumption to around 35 percent; but the credit goes to the shale revolution that has greatly boosted domestic production. What’s more, the potential contribution of ethanol to the energy mix has been oversold. Processing the entire U.S. corn crop into ethanol would yield energy equal to just 12 percent of gasoline consumption. … But the most pressing reason for repealing the ethanol mandate is that refiners must blend a larger quantity every year. … Consequently, refiners are up against a “blend wall” as the mandate forces them to purchase more ethanol than they can safely put into gasoline.”

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Paying for Ethanol’s Infrastructure

renewable fuel standard  ethanol  gasoline 

Bob Greco

Bob Greco
Posted March 22, 2013

Paying for Ethanol's Infrastructure. Ethanol supporters have a blog post up suggesting that if the oil and natural gas industry simply invested in the “modern fuel distribution infrastructure needed to dispense greater than E10 blends,” industry’s issues with unworkable ethanol mandatesunder the Renewable Fuel Standard would vanish.

Maybe in some alternate universe – one that’s disconnected from economic reality, real costs and operating margins. Don’t take our word for it. Take a look at this letter to the Wall Street Journal from Dan Gilligan, president of the Petroleum Marketers Association of America, the folks who own the gasoline stations, convenience stores, heating oil businesses, truck stops and other companies that invest in and market petroleum products. 

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About Ethanol – Just The Facts, Please

ethanol  renewables  renewable fuel standard 

Bob Greco

Bob Greco
Posted March 22, 2013

The Renewable Fuels Association (RFA) has been circulating a video titled “40 Facts about Ethanol.”  The first items demonstrate the growth in ethanol production over the past few decades:

  • 1982 – A handful of small ethanol plants produce 350 million gallons of ethanol
  • 1992 – 39 ethanol plants produce 985 million gallons
  • 2002 – 66 ethanol plants in operation, producing 2.14 billion gallons
  • 2012 – 211 ethanol plants produce 13.3 billion gallons

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RFS 'Irretrievably Broken'

ethanol 

Mark Green

Mark Green
Posted March 20, 2013

A new study by NERA Economic Consulting details severe impacts that could result by 2015 from continued implementation of the Renewable Fuel Standard (RFS) and its market-distorting biofuels mandates:

  • An almost $800 billion decrease in the U.S. economy, as measured by GDP.
  • $500 billion decrease in take-home pay for American workers.
  • 300 percent increase in the cost of making diesel.
  • 30 percent increase in the cost of making gasoline, which could result in rationing and other disruptions in the transportation sector.
  • Greater impetus for the export of refined petroleum products.

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An Artificial Solution to Arbitrary Mandates

ethanol  renewable fuel standard  refiners  e85 

Bob Greco

Bob Greco
Posted March 18, 2013

The Renewable Fuels Association this morning tweeted:

RFA Tweet

This is in many ways progress in that it is a de facto admissionthat RIN prices are rising because we are hitting the “blend wall” on ethanol, and that a solution is needed.  Unfortunately the solution in this case is crazy.

 From Platts:

Well-known energy economist Phil Verleger several years ago first brought up the likelihood that the refining industry might need to promote the sale of E85 as a way around the Gordian knot of a 10% ethanol blendwall combined with a rising mandate for the use of renewable fuels plus a decline in gasoline demand in the US…“The obvious solution to the RIN price problem involves no EPA intervention and no regulatory action at this point,” Verleger writes. “It simply calls for boosting E85 sales.”

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Arbitrary Mandates, Real Costs

renewable fuel standard  e15  ethanol 

Bob Greco

Bob Greco
Posted March 15, 2013

In a March 7 blog post, Renewable Fuels Association (RFA) President, Bob Dinneen claimed that the recent increase in RIN prices is not related to the E10 blendwall, and that the blendwall itself is a myth perpetrated by oil companies as an “excuse for their refusal to move to higher-level ethanol blends.”  He then makes a number of claims that were presumably intended to bolster his misplaced conclusion.  Conveniently, the post does not propose an alternative theory for RIN prices that have gone from 3 cents apiece to over $1, before retreating to about 70 cents today, in less than one years’ time.

The post also ignores that the petroleum industry is only one in a sea of voices raising concern over the negative impacts that E15 and unrealistically high ethanol blending requirements would likely have on on-road and off-road engines and fuel systems, gasoline retail infrastructure and dispensing equipment, the environment, the price of food, food security for the needy, and a laundry list of other health and safety issues.

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Fact Checking AEC’s WSJ “Fact Check”

renewable fuel standard  ethanol blends 

Bob Greco

Bob Greco
Posted March 14, 2013

On March 11, the Wall Street Journal (WSJ) Editorial Board published apiece accurately explaining where the RFS came from, what the blendwall is, why it is problematic and how it can contribute to raising gas prices.  The following day, the Advanced Ethanol Council (AEC) sent the WSJ what they claimed to be a “fact check” on the editorial board’s piece titled “RIN Credits for Dummies.”  Ironically, almost everything in their fact check was wrong.

Here are some of the claims AEC made and explanations of why they are inaccurate:

1. A RIN is produced when a gallon of renewable fuel is produced. Oil companies can then split the RIN from the gallon when they buy the gallon of renewable fuel and sell it on the open market. So, in essence, the oil companies are buying and selling RINs to themselves and then complaining about it to the Wall Street Journal.

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The Science is Clear on E15

e15  ethanol in gasoline  renewable fuel standard 

Bob Greco

Bob Greco
Posted March 12, 2013

We expect attacks from ethanol boosters over E15 gasoline, fuel that contains 15 percent ethanol, because their stated mission is to promote more ethanol use.  But, unfortunately for them, the science is clear; E15 has been shown to cause damage in some engines and fuel systems.

Pointing this out, citing tests by the Coordinating Research Council (CRC), an organization that’s the gold standard in terms of automotive research, has drawn some fantastic claims, most recently that the E10 (10 percent ethanol) “blend wall” – the point at which there isn’t enough E10 being sold to accommodate all of the ethanol mandated by federal law – doesn’t actually exist, more on that below. 

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Back to the Facts on E15

rfa  renewable fuels standard  ethanol lobby  ethanol  epa  e15  coordinating research council 

Mark Green

Mark Green
Posted February 1, 2013

The ethanol lobby doesn’t like the latest research on E15 – gasoline containing 15 percent ethanol – because it raises questions about EPA’s premature decision to approve E15 for use in post-2001 cars and light-duty trucks. The Coordinating Research Council (CRC) study warns that E15 could damage fuel pumps and onboard fuel measurement systems, potentially affecting millions of vehicles. This follows last year’s CRC finding that E15 could damage car and truck engines.  

Since ethanol producers’ goal is more ethanol use, and an EPA pullback on E15 would get in the way of that goal, attacks on both studies – such as those by the Renewable Fuels Association – aren’t surprising. But let’s be candid: They won’t be around if and when motorists end up on the side of the road with a seized-up fuel pump, damaged by E15 use.

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E15 and Check Engine Light Malfunctions

consumers  e15  epa  ethanol blends  rfs34 

Bob Greco

Bob Greco
Posted January 30, 2013

Earlier this week API highlighted new research by the Coordinating Research Council (CRC) on serious potential problems with vehicle fuel systems when operated on E15 fuel – gasoline containing 15 percent ethanol.

In addition to CRC’s research, we want to call attention to a recent paper from Oak Ridge National Lab (ORNL) that was published by the Society for Automotive Engineers (SAE).  This study examined the effects of E15 on malfunction indicator lights (MIL), also known as “check engine lights.”

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