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Friday RFS Roundup – 8/29

Late last week, the news was broken that the Environmental Protection Agency’s 2014 RFS proposal had finally made its way to the Office of Management and Budget (OMB). While we prepared ourselves for the final 90 days of deliberation, we heard predictions for the mandate and learned a bit about the economics of the policy.

  • The Economics of Biofuels:

    In Short:
    t would appear that the dream of growing the fuel required to keep the engines of industry humming — as well as the engines that enable many of our leisure pursuits — is simply too good to be true.”
     
  • Final Lobbying Push on 2014 RFS Begins; Analysts Say Significant Increases Unlikely:

    In Short: “Only “marginal” increases are expected when the Office of Management and Budget wraps up its review of the EPA proposal, which would require petroleum importers and refiners to blend a total of 15.21 billion gallons of renewable fuels into their products, Timothy T. Cheung of ClearView Energy Partners told Bloomberg BNA. That’s nearly 3 billion gallons less than the 18.15 billion gallons required by the Energy Independence and Security Act of 2007 (Pub. L. No. 110-140).

    ‘EPA is likely to stick with the proposed framework,’ said Cheung, who serves as a vice president and research analyst for the Washington, D.C.-based consulting firm.”

Friday RFS Roundup – 8/22

The big news from late this week is that the Environmental Protection Agency, now almost 9 months late on delivering the 2014 ethanol mandate, has finally passed the proposal along to the Office of Management and Budget (OMB) for review. In 90 days or less, we should have a rule.

Learn more from this week:

  • OPIS, EPA Spokeswoman: Final 2014 RFS Sent to OMB for Review: The EPA's proposed 2014 RFS, which was issued in November 2013, called for cuts to the ethanol mandate in an acknowledgment of the blend wall. We’ll see just how their proposal has changed in the last 10 months.

    In Short: “’After an extensive public outreach process, we've received 340,000 comments that will help inform our final determinations. EPA will issue a final rulemaking after the interagency review process has been completed.... The agency's overarching goal is to put the RFS program on a path that supports continued growth in renewable fuels over time,’ the spokeswoman added.”

    “Kevin Book, managing director of Clearview Energy Partners, explained, ‘[our] base case projects that EPA could set the total ethanol requirement to less than 13.6 billion gal [less than the 14.4 billion gal as originally prescribed] and maintain the biomass-based diesel requirement at 1.28 billion gal.’”
  • GlobalWarming.org, KiOR News Underscores Problems With Renewable Energy Industrial Policy: A guest post from Dave Juday, commodity market analyst and principal of The Juday Group, takes a look at the failing history of KiOR, once touted as the most successful U.S. biofuels producer.

    In Short: “Government mandates like RFS, subsidies, loan guarantees, and investments have not proven any better than the market for developing new energy resources – just much more costly.”
  • Midwest Energy News, Boating industry not backing down in Chicago E15 fight: The city of Chicago and the 13,000 or so boats that call it home, are in the midst of an ethanol debate. On July 28, after a five-hour committee hearing, the Chicago City Council decided not to advance the E15 ordinance, which would require all gas stations in the city to sell the ethanol blend. The region’s boating industry is sticking to its guns and pushing back on the ordinance which will likely come up again at hearing in the coming months.

    In Short: “Ethanol can be more corrosive and burns hotter than gasoline, so the higher ethanol blend can damage gaskets, valves and seals in engines not built to handle it. Warranties for boat engines typically are invalidated if E15 gas is used, according to David Dickerson, director of state government relations for the National Marine Manufacturers Association.”

    “If you fill up with E15 your boat engine will run rough, it’s going to be hard to start, and to restart, if you are out on the water and kill the engine,” Dickerson said. “Those are significant when you’re boating rather than driving. Being caught out on the water with no engine can be very dangerous, not just annoying.”

Friday RFS Roundup – 8/15

As the Environmental Protection Agency — now more than eight months later on delivering the 2014 rule — and Congress step away from the Hill, Americans, refiners and farmers alike continue to wait for movement from Washington on the ethanol mandate. This week, the media focused on some of the long-term effects the Renewable Fuel Standard (RFS) is having on food supply and our environment.

Learn more from this week:

Orange County Register, Andrew Purzder: U.S. needs corn for food more than for fuel: Andrew Puzder, the CEO of CKE Restaurants (Carl’s Jr.), explains how the ethanol mandate, which turns food into fuel, is hurting everyday Americans.

In Short: “Consumers experience the cost impact in their grocery stores and local restaurants. The RFS is particularly burdensome for restaurant franchisees, who are generally small-business owners operating with slim profit margins – sometimes just pennies on the dollar. With the RFS still in place, the increased cost of proteins restricts their ability to keep prices down and reduces the monies that otherwise would be available to support their communities, renovate facilities, open new locations or hire new employees.

A 2012 study by PricewaterhouseCooper commissioned by the National Council of Chain Restaurants to understand the impact of ethanol policies on chain-restaurant food costs, estimates that if the 2015 RFS mandate increased ethanol production by 6 billion gallons per year, it would increase commodity costs for chain restaurants by $3.2 billion per year. For quick-service restaurants alone, the estimated increase would be $2.5 billion per year.”

The Des Moines Register, We can’t let agriculture destroy our environment: Increased fertilizer runoff from expanding corn crops is causing even the people who benefit most from the RFS, Iowans, to question the policy’s legitimacy. 

In Short: “When a city has to stop drinking its water, something is seriously out of kilter.
Iowa could take steps to avoid that fate by limiting how much fertilizer farming operations use. Instead, Iowa lets them decide whether to voluntarily reduce nitrogen and phosphorus use — the sources of "toxic blooms" of algae. That isn't working.

Let's be realistic: If it's left to them, industries are likely to do what's easiest and costs them the least, which probably won't be in the best interests of residents and consumers.”

Green Builder Media, Lester Brown of Earth Policy Institute: Food Scarcity and Political Strategy: Environmental expert and founder of the Earth Policy Institute, Lester Brown, cites biofuels policies like the ethanol mandate as one reason the world is in a time of transition from a time of food surplus to one of food scarcity.

In Short: “Increasing use of grain to fuel vehicles is also straining our food supply. 400 million tons of grain are harvested in the U.S. each year. Of that amount, 130 million tons are allocated to ethanol distilleries to produce fuel for cars (the US has the highest level of grain use for transportation in the world).

… Using our precious food resource for transportation isn’t an efficient application for an already strained supply.”

What’s in your water? Ethanol mandates.

Last week, half a million people in Ohio were left without drinking water because of severe toxic algae blooms in Lake Erie, primarily caused by fertilizer runoff

Increased fertilizer runoff is just another unintended consequence of the Renewable Fuel Standard (RFS) that’s doing more harm to the environment that good. (For those of you catching up, the RFS is a government policy that mandates that ethanol fuel made from corn be blended into the U.S. gasoline supply.)

As the level of ethanol mandated grows each year, more land acreage is devoted to grow corn to make it. In fact, farms across the Midwest, including Ohio, have converted an additional 13.5 million acres to grow corn.

Unfortunately, corn happens to be an incredibly water and fertilizer intensive crop. Phosphorous, the element in fertilizer that is causing the algae bloom, is carried with rain from the farm land and ground water into nearby lakes and streams — and it’s happening in more than just Ohio.

The image below shows the path that fertilizer is taking from some of our top corn producing states, like Iowa and Minnesota, into the Gulf of Mexico and causing what is known as the “dead zone.”

The dead zone is a pocket of low-oxygen water that forms off the coast of Louisiana every summer, and could stretch from Alabama to South Texas this year, threatening 18 percent of the U.S. commercial seafood market.

Even Iowans, who benefit most from this policy, are starting to ask, “Are we prepared to sit back and leave our quality of life, our natural resources and our health up to the goodwill of Iowa's agricultural producers?”

Unfortunately the Administration is slow-moving on fixing this policy, but Congress can change this legislation. Join us to call for swift action from your representatives when they’re back on the hill.

Friday RFS Roundup – 8/8

This week, the media focused on some of the unintended consequences of the Renewable Fuel Standard (RFS). From increased food costs to environmental threats and governmental boondoggles, the ethanol mandate harms consumers across the nation. And yet, the American people and refiners alike are still waiting for final 2014 blending requirements from the EPA, which are now almost eight months late..

Learn more from this week:

  • CDC News, Lake Erie's Algae Explosion Blamed on Farmers: Toxic algae blooms were found in the water of Lake Erie, likely caused by expanding corn crops in the area.

    In Short: “The commission's report suggested that changes to farming practices were largely to blame for recent blooms.

    ‘The main changes that are responsible have to do with intensification of farming – getting more out of the land than we did historically,’ Benoy said, adding that that includes things like:

    o More livestock farming and greater application of their waste to fields.
    o Higher application of fertilizers in general.
    o An increase in corn farming in the U.S. Midwest, partly to meet a demand for ethanol fuel.”
  • Delaware News, The real cost of ethanol: Ethanol was supposed to be good for the environment, lower gas prices and increase energy security but the costs of the unintended consequences outweigh the benefits, and Americans are starting to catch on.

    In Short: “[T]he growth of ethanol, an alcohol-based additive that makes up 10-percent of each gallon of gas, has had unintended consequences:

    o We pay more for foods like bread, snacks and chicken. Between 2007 and 2008, ethanol drove a 10 to 15 percent increase in food prices, according to a Congressional Budget Office report – partly because corn once used for livestock feed is now used to make fuel.
    o Our vehicles get fewer miles per gallon of gasoline now that ethanol is included, and we're paying more for that fuel – about 13 cents per gallon because of the lost efficiency.
    o Boat engines and lawn care equipment go kaput from engines that weren't designed for fuels that include alcohol, a natural byproduct of the sugars and starches in corn.
    o Fiberglass marine fuel tanks in older vessels can't stand up to the alcohol-based fuel additive, causing dangerous leaks.
    o Iconic species like monarch butterflies, native bees, pheasants and other grassland birds are declining from lost habitat as more land is converted to corn production.
    o Corn planted in marginal habitats threatens one of the most altered ecosystems in the world – the temperate grasslands of the Great Plains, which naturally absorb carbon from the atmosphere.”
  • Bloomberg, Obama’s Delay on Renewable Fuel Puts Producers in Bind: The Environmental Protection Agency (EPA), charged with enforcing the ethanol mandate, is more than eight months late in delivering the final 2014 blending requirements, which isn’t good for anyone.

    In Short: “The Environmental Protection Agency is eight months past the deadline for issuing its mandate of how much ethanol, biodiesel and other petroleum alternatives must be blended into motor fuels this year, leaving investors wary about the government’s commitment to the program. At the same time, cuts EPA proposed last year, and a surprise regulatory rewrite last month, may undercut demand for Canergy’s ethanol.”

Friday RFS Roundup – 8/1

This week, we were on the edge of our seats for the premiere of Sharknado 2: The Second One, which premiered Wednesday night. And for any of you who are just joining, we are devoted Sharknado fans. Just like Sharknado, the RFS is out of control! From increased food and gas prices to environmental and engine damage, ethanol has failed consumers across the nation. This year, to exemplify the real dangers of this failing policy and the very real possibility of ‘sharknados,’ we made a couple of Vine videos for your viewing pleasure: check them out here and here.

And on a more serious note, here’s some news from this week:

Politico, Iowa Senate: Ethanol Fuels a Clash in Corn Country: Political and energy analyst Erica Martinson, looks at the effects that the Renewable Fuel Standard is having on the 2014 midterm elections. In the controversial Iowa Senate race, it will come down to “policy vs. politics” and whether or not corn will have a lasting role in our fuel supply. Stay tuned.

In Short: “Rep. Bruce Braley is betting the farm on corn — and Democrats’ hold on the Senate may be in danger if he’s wrong. The Iowan is touting federal support for ethanol while competing in one of 2014’s most critical Senate contests — and he’s banking on his ability to champion his state’s cause in D.C., where the corn industry’s political power has waned. While critics ranging from environmentalists to anti-subsidy fiscal conservatives have turned against ethanol, Braley is busy posing at gas stations that sell the corn-based biofuel, campaigning with farmers and pressuring EPA to protect the federal mandate that guarantees corn’s role in the U.S. fuel supply.”

The Des Moines Register, Biz Buzz: 'Face of Hunger' Found in Iowa: National Geographic is doing a multi-part series that looks at the “face of hunger” in different areas across the country; this month, the magazine takes a look at hunger in Iowa. Photographer, Amy Toensing, and author, Tracie McMillan take the reader on a visual exploration of the struggle Iowa families face to put food on their tables, despite the abundance of food grown and farm subsidies in their state.

In Short: “Photographer Amy Toensing said the magazine picked Iowa ‘because the state ranks as one of the highest recipients of farm subsidies, and yet has a large number of families who are 'food insecure.' ‘It's a cruel irony that people in rural Iowa can be malnourished amid forests of cornstalks running to the horizon,’ author Tracie McMillan notes in the piece. ‘… These are the very crops that end up on Christina Dreier's kitchen table in the form of hot dogs made of corn-raised beef, Mountain Dew sweetened with corn syrup, and chicken nuggets fried in soybean oil. They're also the foods that the U.S. government supports the most.’”

Reuters, Biofuel Groups Press White House on More than Just 2014 Targets: Advanced biofuels producers are pushing for fundamental changes regarding the Renewable Fuel Standard. Like us, they are arguing that corn ethanol isn’t better for the environment.

In Short: “Meeting with senior White House adviser John Podesta last week, the Advanced Biofuels Association pressed the White House to speed up approvals of new fuels that can qualify as advanced and cellulosic fuels, known as pathways… Corn-based ethanol is currently classified as a "conventional biofuel" that delivers only a 20-percent emissions improvement over gasoline. Some environmental groups have blasted the fuel as not much better than fossil fuels and critics have proposed stripping corn ethanol out of the mandate.”

Friday RFS Roundup – 7/25

Back in April, the Federal Trade Commission (FTC) proposed labeling requirements for gasoline blends, particularly for ethanol-blended gasoline. This would require fuel makers to release more information on ethanol concentrations to provide greater detail on what consumers are putting in their fuel tanks. With summer driving upon us, we wanted to know what our advocates would put on their warning labels. Check out our Twitter and Facebook to see what they came up with this week.

Learn more from this week:

Chicago Sun-Times,  New Fuel Isn’t Right Mix for Chicago: On Monday, July 28th, Chicago’s Finance Committee will be voting on proposed legislation that would require all Chicago gas stations to offer E15 (gasoline with 15 percent ethanol) at their fueling pumps. In this editorial, the negative effects on Chicagoans ares clearly defined, including E15’s damage on common engines, its cost on motorists and the significant burden this mandate could have on local gas stations. Without any proven market, this mandate is detrimental to Chicago’s motorists and local gas stations.

In Short: “Requiring Chicago gas stations to start offering E15 while other areas don’t is premature for several reasons… The ordinance could place such a big burden on service stations that some of them would close. No stations right now are certified to pump E15 gas. Six stations citywide are set up to pump fuel with even more ethanol than E15, but even they would have to make some changes to comply with the ordinance. The other roughly 400 stations, though, would face costs as high as $300,000 to make the change, according to the Illinois Retail Merchants Association. E15 would require new certification for tank systems, pump and line systems. That’s a big financial burden for a product for which there is no proven market.”

The Hill, RFS Props Big Ethanol, Hinders Small Businesses: Charlie Drevna, president of American Fuel and Petrochemical Manufacturers, discusses the significant impacts that the RFS has on consumers, their vehicles and local businesses trying to meet the market demands. As more and more automakers declare their warranties void with the use of E15, vehicle owners are responsible for the damage that ethanol causes on their vehicles. Moreover, this policy places a significant burden on small business owners who are trying to match consumer demand. However, as ethanol levels increase in our fuel supply, small gas stations are forced to carry this higher blended fuel and could face legal action if misfueling takes place on site. 

In Short: “Outside of EPA’s 2014 proposal, more and more members of Congress are recognizing the numerous problems associated with increasing amounts of ethanol in U.S. gasoline. In fact, more than 220 bipartisan members of congress have expressed support for lowering the ethanol mandate in hopes of addressing the policy’s impacts on consumers, automakers, engine manufacturers and other affected industries. Like Sens. Grassley and Klobuchar, I too urge Washington to ignore special interests. The market, not Big Ethanol, should dictate what’s best for our consumers, businesses and bottom line.”

Platts, The Political Calculations of Ethanol in Iowa and in Washington: In this political analysis, author Herman Wang looks at the role that the RFS plays in U.S. presidential candidacy races. As Iowa hosts the first-in-the-nation nominating caucus, candidate wins are dependent on their endorsement and support of the RFS. Sounds like a case of politics over policy to us…

In Short: “Conventional political wisdom has held that given Iowa’s importance in US presidential contests as host of the first-in-the-nation nominating caucuses, the Renewable Fuel Standard is pretty much unassailable. The federal biofuels mandate enjoys immense bipartisan support in the state, where corn is king. Candidates hoping to curry favor with state voters would need to wholeheartedly endorse the RFS or at least pay lip service to the law while campaigning there. Iowa, after all, leads the nation in biofuels production, with 41 ethanol plants in the state, along with 18 biodiesel facilities.”

Smarter Fuel Future Advocates’ Ethanol Warning Labels

From Barbara T.



From Bill S.



From Bradford T.



From David A.



From Dudley D.



From Edward G.



From Franklin M.



From Howard S.



From Linda R.



From Lisa W.



From Lucinda S.



From Marilyn L.



From Mary O.



From Mike R.



From Patricia C.



Phillip R.



From Tom K.



From Walter E.



From William T.
 

 

Friday RFS Roundup – 7/18

This week, we saw continued coverage on the diverse effects that ethanol mandates have on American consumers. From increased food costs to environmental threats and governmental boondoggles, ethanol mandates harm consumers across the nation. And yet, the American people are still waiting for action from the EPA, which is now almost eight months late on releasing the 2014 blending requirements.

Learn more from this week:

NBC News, Heartland Water Crisis: Why the Planet Depends on These Kansas Farmers: Part two of a three-part series, journalist Brian Brown details America's Breadbasket crisis and the depletion of the Ogallala Aquifer, one of the U.S.’ major water sources. In this investigative piece, Brown finds that for US farmers, growing corn presents a morality problem, but US policy urges more growth. With $45 billion subsidized to produce ethanol since the 1980s, this large scale of production threatens our water & food supply.

In Short: “For farmers like Mitch Baalman, corn presents an immediate math problem. On average, a corn crop needs 24 inches of water during its growing season. But, under the rules of the new LEMA, that total would represent nearly half of his five-year allotment. ‘We’re going to have to change the mindset,’ Baalman says. ‘Pull the throttles back. Plant more alternative crops. We’re just not going to be corn, corn, corn—even though that’s what the insurance is telling us and that’s what the government is subsidizing. I would love to raise corn, too. But we can’t.’”

Chicago Tribune, Why is the EPA Stalling on Ethanol?: In this analysis, Chicago Tribune is just as perplexed as we are regarding the 2014 blending requirements that the EPA has already proposed to reduce, but hasn’t actually done so yet. This is a policy that increases consumer costs, takes away free market choice and favors one industry over all others. With each day that the EPA does not take action against this failing policy, consumers will continue to carry the consequences. 

In Short: “In the midst of all the political pressure, the EPA has stalled. The agency long ago missed a Nov. 30 deadline to set the final standard. It still hasn't issued a final decision, though we are halfway through 2014. The resulting uncertainty has left the motor fuel industry in the lurch. By making it impossible for fuel blenders to plan in a timely manner, the EPA's inaction has raised costs for them and consumers. Depending on what the agency eventually decides to do, it could temporarily disrupt fuel supplies. The EPA needs to resolve this now. But the ultimate answer lies with Congress. It's time to end the Renewable Fuel Standard.”

Consumerist, Get Ready to Pay More for Chocolate; Hershey Raises Prices for First Time in 3 Years: The headline says it all. Because of various rising commodity costs, including dairy prices, the global candy company is forced to increase its sales prices by eight percent next year. While we can’t speak for all the rising commodity prices, ethanol mandates have a direct effect on increasing dairy prices. As the price for corn and feedstock rises, these increases are passed onto the farmer, and eventually, the consumer.

In Short: “’Over the last year key input costs have been volatile and remain at levels that are above historical averages,’” said Michele G. Buck, President, North America, The Hershey Company, in a statement. “’Commodity spot prices for ingredients such as cocoa, dairy and nuts have increased meaningfully since the beginning of the year. Given these trends, we expect significant commodity cost increases in 2015.’”

Ethanol Lobby’s Solution to Ethanol Glut – Use More Ethanol.

Last November, the Environmental Protection Agency (EPA) acknowledged that the level of ethanol the government mandates be blended into fuel will soon exceed the level of ethanol that can safely go into the fuel supply -- a “tipping point” known as the blend wall.

In order to prevent Americans from hitting the blend wall, the EPA proposed lowering the 2014 mandate. With this proposal came major political pressure from ethanol makers and now the EPA is considering backing down.

So, what is the ethanol lobby’s solution to the blend wall? Surprising to no one, they recommend…more ethanol.

Ethanol companies say that the blend wall can be avoided if more motorists use higher blends of ethanol like E15 and E85—which contain 15 and 85 percent ethanol respectively, instead of the standard E10 which only contains 10 percent ethanol.

Unfortunately, this proposal is completely divorced from reality and is also a raw deal for consumers.

  1. Nonexistent Demand — Americans aren’t buying the flex-fuel vehicles necessary to run on E85, and the ones who do, aren’t filling up with it. Only a mere 5 percent of U.S. light-duty vehicles on the road are able to run on E85 and only 4 percent of those vehicles actually use it. Even by 2022, the Congressional Budget Office expects only 1 billion of the 125 billion gallons of blended gasoline to be used that year will be E85.
     
  2. Lower Fuel Economy — Compared side-by-side, ethanol is 33 percent less efficient than regular gasoline. E85 is estimated to deliver 25-30% fewer miles per gallon than the 10% ethanol blend that currently exists in most of today’s gas, which leads us to our final  point…
     
  3. Higher Adjusted Prices — When the price of E85 is price-corrected for miles per gallon, it is 40 cents a gallon higher than premium gasoline.

…And don’t get us started on the environmental and economic issues associated with ethanol mandates.

Tell Washington not to cave to Iowa – It’s time to reform ethanol mandates.