Yesterday, Propel Fuels along with California Governor Arnold Schwarzenegger celebrated the grand opening of a new alternative fuels station in San Jose, CA, that is now serving E85 and biodiesel. This station opening is in correlation with Propel Fuels’ rollout of 75 retail alternative fuel stations across California. The roll out is part of California's Low Carbon Infrastructure Investment Initiative, which will create numerous jobs throughout the state as well as provide California drivers with a clean and green alternative fuel option rather than petroleum.
Environmentalists were among the early supporters of ethanol as they sought to mitigate the damage done by man’s overly heavy dependence on petroleum. Now that ethanol is trying to go mainstream, environmentalists are turning on ethanol production in an oil-fueled haze. But it wasn’t that long ago the leading environmentalists were urging more ethanol use.
Following Secretary Vilsack’s speech at the National Press Club in Washington, DC on October 21, he took a road trip down to the Southeastern region of the country to visit and tour RFA Member First United Ethanol, LLC or FUEL, located in Mitchell County, Georgia. On his October 25th meeting, Vilsack alongside U.S. Representative Sanford Bishop met with FUEL’s Board of Directors and employees to emphasize the need to stop our dependence on foreign oil.
Ethanol prices have strengthened over the past several months in response to higher corn prices and growing ethanol demand. Some have attempted to single out the escalation in ethanol prices as a primary driver of the slight increase in retail gasoline prices. Yet, a quick look at the data shows retail gasoline prices and ethanol spot prices are not well correlated, even when lagged to account for the fact that it may take some time for ethanol price increases to work through to the retail level.
America’s ethanol industry continues to grow as evidenced by two new ethanol facilities officially opening for business this week. RFA Producer Member Abengoa Bioenergy, a global leader in ethanol production, opened new facilities in in Madison, Illinois and Mt. Vernon, Indiana. Each of these plants will contribute 90 million gallons of ethanol to the marketplace annually.
Following this morning's remarks by Agriculture Secretary Tom Vilsack regarding Obama Administration biofuel policy, Renewable Fuels Association President and CEO Bob Dinneen issued the following statement: "The Obama Administration has shown strong leadership on the issue of domestic biofuels, putting forward a vision that recognizes the importance of the existing industry and the potential of new technologies. Domestic ethanol production is one of the few bright spots in a gloomy economic forecast, providing tens of thousands of jobs in hundreds of rural communities all across the country. By expanding the scope of American ethanol production to include new feedstocks from grasses to wood waste to algae, the industry can extend the benefits seen in rural America to every corner of the country".....
Since a polemic paper from environmental attorney Tim Searchinger was released in February 2008, a false notion that American ethanol production from grain was leading to Brazilian rainforest destruction has permeated discussions around ethanol's environmental contributions. Now, a team of researchers from the Department of Energy have analyzed real world data from the period of greatest American ethanol expansion and found this notion to be without merit.
Earlier this week, the Wall Street Journal posted “The Ethanol Bailout”, in response to the U.S. EPA grant of the E15 waiver for MY2007 and newer cars and light trucks, claiming ethanol is highly corrosive and will damage to engines and exhaust systems. Yet, test after test has shown that ethanol blends up to E15 are safe and effective for all vehicles. The following is my Letter to the Editor: “Given the nature of the your editorial "The Ethanol Bailout" (Oct. 18), it may come a surprise that I agree with the Journal that the EPA's decision to allow more ethanol use in gasoline is not based on all the science. If it were, the EPA would have allowed the use of up to 15% ethanol in a gallon of gasoline for every vehicle on the road".......
Based upon Clean Air Act requirements, EPA is to consider all scientific evidence when evaluating new fuels. In the case of the E15 waiver, however, EPA completely ignored credible data submitted by RFA that demonstrated the efficacy of E15 in older vehicles. Ricardo, Inc., an internationally recognized automotive engineering firm used EPA’s own methodology to evaluate the likely effects of using E15 in vehicles model year (MY) 2000 and older. It is previously unheard of for EPA to deny a waiver request for vehicles that are beyond their EPA-determined useful life, as all MY2000 and older vehicles will be on January 1, 2011. Alas, c’est la vie. It is now up to the industry to make a silk purse out of this sow’s ear. We have introduced new fuels in this country before and the pathway to doing so is clear. It is a complicated process and one that will not happen overnight. Fortunately, the RFA has already begun this process.
Last Friday’s USDA Crop Production and WASDE reports, which slashed estimates for the 2010 corn crop and average yield, sent the anti-biofuels crowd scurrying to find their trusty “Food vs. Fuel” playbooks. The alarmist rhetoric over the past several days seems virtually cut and pasted from the raft of doomsday press releases and manufactured “studies” that cluttered the media channels in 2008 when record oil prices and rampant speculation pushed grain prices to unprecedented levels and food prices to the highest levels in recent memory. For opponents of ethanol and beneficiaries of cheap corn, pointing the finger at biofuels has become the reflexive knee-jerk response any time grain prices start to rise.
U.S. biofuel producers exported 29.6 million gallons of ethanol (both denatured and undenatured, non-beverage alcohol) in August, up 18% from July, according to government data released today. Year-to-date ethanol exports stand at 212 million gallons, nearly double the amount of total exports in 2009. Total exports in August were the third highest of the year, trailing only March and April. The U.S. remains on pace to export more than 300 million gallons of ethanol in 2010, equivalent to roughly 2.5% of expected domestic production.
Today, the Environmental Protection Agency granted the E15 waiver for model year (MY) 2007 and new vehicles. By doing this, the EPA is missing an opportunity to reduce America’s dependence on foreign oil and create new economic opportunity. This scientifically unjustified bifurcation of the U.S. car market will do little to move the needle and expand ethanol use today. Limiting E15 use to MY2007 and newer vehicles only creates confusion for retailers and consumers alike. America’s ethanol producers are hitting an artificial blend wall today. The goals of Congress to reduce our addiction to oil captured in the Renewable Fuels Standard cannot be met with this decision.
EPA is poised to make a decision on E15, but appears set upon a bifurcated market and partial waiver approach. By only approving E15 for 2007 and new vehicles, EPA is once again artificially limiting the U.S. ethanol market without providing any scientific justification. What does it all mean? How many new ethanol gallons will be sold? These are important questions and the answers are not at all clear.
As Chuck Woodside, General Manager of farmer-owned KAAPA Ethanol in Minden, Nebraska, settles into his new position as RFA Chairman, he addresses issues and challenges that the ethanol is currently facing and will take on in the future.
Posted in Ethanol
Deputy Assistant to the President for Energy and Climate Change Policy Heather Zichal reiterated the commitment of the Obama Administration to the entire ethanol industry regardless of technology or feedstock at RFA's Annual Membership Meeting this week. Specifically, Zichal highlighted the Administration's support of existing ethanol policy, including the tax incentive in its current form, as well as its commitment to ethanol technologies of every kind.