Resource Center | Smarter Fuel Future

May 10, 2013

Comments on Impacts of RFS

The House of Representatives Committee on Energy and Commerce is issuing a series of white papers as the first step in reviewing the Renewable Fuel Standard (RFS). Each white paper poses a series of questions on the pitfalls of the RFS to stakeholders in affected sectors.

From skyrocketing RIN prices to engine damage, land-use competition to higher animal feed costs and feeding the world’s hungry, organizations are dealing with the effects of this government boondoggle every day.

Below, you can read the comments on the first two white papers and check back as we update for each white paper issue area.

Paper 1- Blend Wall / Fuel Compatibility Issues

Paper 2- Agricultural Sector Impacts

April 16, 2013

EPRINC: Get Ready for a Bumpy Ride – It Could be a Turbulent Year for Gasoline Prices

From the summer of 2012 through mid-February of this year, the price differential, or spread, between gasoline in New York Harbor and the Gulf Coast (NYH 2 GC) had been wider than at any similar period in recent history. During this time, retail gasoline in PADD 11 (East Coast) typically sold at a premium of $0.20-$0.30 per gallon to retail gasoline in PADD 3 (Gulf Coast), well above the historical premium.

The spread peaked at $0.41 per gallon in November, although this peak is partially attributed to Hurricane Sandy. The spread began to collapse in mid2February with improvements in the Northeastern supply chain and temporary refining issues in the Gulf Coast. The spread currently sits at a more ‘normal’ level of about $0.05 per gallon. However, it is far from certain that this calm will persist given the upcoming summer driving season, the tenuous supply situation in the Atlantic Basin (U.S. East Coast and Europe), and several regulatory hurdles which are emerging as serious barriers to the supply of refined products in the United States.

March 25, 2013

The Economist: Difference Engine: End the ethanol tax

Charles Babbage, March 25- THE uneasy relationship between America’s corn (maize) farmers and its oil refiners is fraying at the edges. The source of the conflict is the amount of corn-derived ethanol which has to be blended into petrol as an oxygenator, to boost the fuel’s octane rating (while also providing a generous off-budget subsidy for corn-growers). The farmers want the amount of ethanol used in petrol to be increased from 10% to 15% of each gallon sold at the pump. The distillers argue that diluting petrol with that amount of ethanol would damage engines and leave them liable to lawsuits from motorists and manufacturers alike.

Ethanol in such quantities can certainly damage engines that are not equipped to handle it—as few are. The problem is that, unlike the hydrocarbons of pure petrol, ethanol has a special affinity for water from the atmosphere. The entrapped moisture can corrode petrol tanks, pumps, fuel lines and injectors. Only 3.6% of vehicles on the road in America are certified to use fuel containing higher blends of ethanol like E15 and E85 (15% and 85% ethanol, respectively).

Moreover, ethanol burned in an engine produces more than twice as much ozone as the equivalent amount of petrol. Ground-level ozone is a big cause of smog. And, while good at boosting a fuel’s octane rating, ethanol packs only two-thirds the energy per gallon of petrol. As a result, motorists get fewer miles per gallon using fuel blended with ethanol than with undiluted petrol. So, even if blended fuel is cheaper per gallon than petrol (thanks to ethanol's subsidies), the overall cost of using it tends to be higher.

The tussle between Big Oil and Big Corn has burst into the open because of the sudden surge in petrol prices—up 12% since the beginning of March. This has happened at a time when oil prices in general have been flat, or even in decline.

February 26, 2013

Support for Wicker-Vitter Bill S. 344

On Thursday, February 26, a group of 37 organizations representing businesses, agriculture, environmental, development, and free market interests signed a letter of support for S. 344, introduced by Senators Wicker (R-Miss.) and Vitter (R-La.) to rescind EPA’s E15 waivers and to cap ethanol content in gasoline at 10 percent.

February 19, 2013

Twenty-First Century Snake Oil

The US Military has been funding biofuel research, buying test and demonstration quantities of biofuels, and is now funding construction of new bio-refineries with the stated objectives of helping to commercialize production, increase the domestic fuel supply, reduce dependence upon foreign oil, and reduce fuel costs associated with oil price fluctuations. The military’s role is part of a larger federal government energy strategy pursued by consecutive Presidential Administrations to migrate the US economy away from fossil fuels toward domestically produced biomass-based fuels that are purported to be perpetually renewable, easier on the environment, and enhancing to national security. Current military and national energy policy and strategy need to be informed by a better understanding of the physical limitations and negative consequences of large-scale biofuels cultivation and consumption that are only now starting to receive due attention.

This paper presents a physical evaluation of key characteristics of liquid transportation fuels and highlights the deficiencies that preclude biomass from becoming a primary energy source and biofuels from replacing petroleum as a national-scale transportation fuel. These factors include petroleum-dependence, energy return on investment (EROI), energy density, power density, water footprint, food competition, environmental damage, land confiscation, and lifecycle greenhouse gas (GHG) emissions. This paper argues that biofuels do more to harm the causes of national and global security than to help them.

December 19, 2012

Federal Ethanol Policies and Chain Restaurant Food Costs

The National Council of Chain Restaurants (NCCR) commissioned, at the request of membership, a study by PricewaterhouseCoopers LLC (PwC) which examines the effects of the use of corn-based ethanol required by the federal Renewable Fuel Standard (RFS) on the chain restaurant industry and its small business franchisees.

The results of the PwC study are now available in a report entitled “Federal Ethanol Policies and Chain Restaurant Food Costs.”

PwC concluded that the RFS mandate, which requires an ever-increasing volume of ethanol fuel from corn to be blended into gasoline each year, significantly increases the food input costs of chain restaurant operators.

PwC estimated that by 2015, when the RFS is fully phased-in, the RFS mandate will increase total costs for chain restaurants owners by up to $3.2 billion per year for every year the RFS remains in effect.

For the full study, click here

October 11, 2012

Fueling the Food Crisis: The Cost to Developing Countries of U.S. Corn Ethanol Expansion

The U.S. Farm Belt is currently experiencing the worst drought it has seen in 50 years, devastating crops and raising corn prices to record levels. The ongoing spillover effect of this price spike is just the latest episode in a devastating, protracted global food crisis that has pushed millions into poverty and hunger around the globe over the past 6 years. It is clear that the promotion of biofuels by the US, the EU and other countries has played a major role in creating the food crisis. Without decisive action on the part of these global actors to eliminate mandates and incentives that encourage the unsustainable production of industrial biofuels, the crisis will continue with no end in sight.

The extended and widespread US drought is straining corn supplies at a time of record demand. Roughly 40% of US corn is now consumed in the production of ethanol, a practice that has been encouraged by a range of U.S. government mandates and incentives. There is no doubt that the diversion of what amounts to 15% of world corn supply into fuel has put significant upward pressure on food prices. The National Academy of Sciences estimates that global biofuels expansion accounted for 20 – 40% of the price increases seen in 2007-8, when prices of many food crops doubled.

August 27, 2012

Letter to the EPA from Governor of Virginia

On behalf of the Commonwealth of Virginia, I respectfully request that the applicable volume of renewable fuel be waived for 2012 and 2013 pursuant to section 211(o)(7) of the Clean Air Act (CAA).

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August 20, 2012

Letter to the EPA from the Governor of Georgia

Please accept this petition as my official request for you to exercise the Environmental Protection Agency's (EPA) authority under the Clean Air Act (CAA) Section 211 (0) (7) (A) to provide a waiver in 2012 and 2013 to the Renewable Fuels Standard (RFS) for ethanol.

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August 9, 2012

Letter to the EPA from Governors of Delaware and Maryland

We are writing in support of the July 30, 2012 “Petition for Waiver or Partial Waiver of Applicable Volume of Renewable Fuel” by the National Chicken Council and others that formally asked you to use your discretionary authority to waive the volumetric requirements, in whole or in part, of the Renewable Fuel Standards (“RFS”)pursuant to Section 211(o)(7) of the Federal Clean Air Act, as amended by the Energy Independence and Security Act.

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