Seeking Alpha

In victory for oil industry, EPA proposes lower renewable fuel quotas

  • The EPA is proposing a range of 15B-15.52B gallons of renewable fuel in 2014, nearly 3B fewer gallons of biofuel to be blended into gasoline than mandated by the original 2007 law.
  • The new proposal angers farm groups, corn ethanol producers and supporters of biodiesel, but it's a victory for oil companies, which have long argued that if the content of ethanol in motor fuel exceeded 10% - i.e., the "blend wall" - it might damage cars, motorcycles and lawn mowers.
  • The administration also is setting a 2B-2.5B gallon target range for all advanced biofuels (earlier).
  • Among the biggest movers: PEIX +13%, ADM -2.9%.
  • Refiners: VLO +0.8%, HFC -0.4%, PSX -0.5%, TSO -0.3%.
  • ETF: CORN -1.2%.
Comments (88)
  • Farmers mad they can't waste as much of their crops to make more money? Get out of town...
    15 Nov 2013, 03:10 PM Reply Like
  • it was a stupid idea in the first place to grow corn for fuel; now w/ the US awash w/ nat gas and oil, its even more insane.
    15 Nov 2013, 03:22 PM Reply Like
  • Ditto. Even China's LNG and other natural gas car mandate beats the US in efficiency and emissions. The only downside is poor government employees need to drive low emission all natural gas cars and is the main reason it never passes in the US. Government employees and unions own US policymaking and its ridiculous budgetary process not US citizens. Maybe we should have a bike mandate and certainly need an no union law for public employees who should serve the public and not themselves. It shore would solve the post office problem as well as go a long way in curbing the deficit.
    16 Nov 2013, 10:53 AM Reply Like
  • Another "no union" comment.....Mr. Woong - you must have some self interest in bashing unions (public in this case). If owners (shareholders) have a right to pool moneys, goals, and profits, then so to should workers - capitalism is a two way street. If not, then it's tantamount to slavery. As far as public employees, as it is LEGAL for workers of any class to unionize, they can and should do so. It's obvious the government and big business has set out to demolish unions, however, i believe the level of participation in same has reached it's low point, and workers will realize it is actually to their benefit to be a member in a union. Higher pay, safer work place, more respect from management, etc.
    Good investing!
    17 Nov 2013, 10:21 PM Reply Like
  • jsijimmy

     

    Please consider that unions do not pool moneys, goals, and profits.
    History has taught us that many unions are/were controlled by criminal organizations. How many companies have closed shops which mean that to get a job you need to join a union. In some areas unions protect the lazy and corrupt,example police unions which have different rules for their union brethren than the public.
    As to investing, Public companies that have unions have a greater chance of going bankrupt than non union companies for the last 20 years.
    18 Nov 2013, 08:15 AM Reply Like
  • When companies get together to fix prices, it called anti-trust violations. When unions do it, it's called Collective bargaining.

     

    Never quite understood that.

     

    As if it's only companies that can be greedy?
    18 Nov 2013, 08:21 AM Reply Like
  • "When companies get together to fix prices, it called anti-trust violations. When unions do it, it's called Collective bargaining."

     

    Ain't that the truth. Never understood how to RTW legislation was "bad" using that logic.
    18 Nov 2013, 08:41 AM Reply Like
  • (PSX) doesn't seem to be celebrating....
    15 Nov 2013, 03:23 PM Reply Like
  • finance m

     

    I assume because their pipelines are on the wrong side of the refinery and the location of the refineries
    15 Nov 2013, 04:12 PM Reply Like
  • "(PSX) doesn't seem to be celebrating...."

     

    Probably time for a little pullback considering the nice run the last month.
    15 Nov 2013, 09:20 PM Reply Like
  • Yes, the PEIX share price bumped up on this news, since they are primarily an ethanol producer. It happens that their shares have fallen big-time over the past few weeks (on rumors?). So perhaps having expected worse, the shares jumped on less-than-total elimination of the ethanol mandate. Just guessing.
    17 Nov 2013, 12:57 AM Reply Like
  • About time!! The should abolish the entire program. The ethanol mandates are just one more example of ludicrous US energy "policy"..right up there with "clean coal", biofuels, etc. etc.
    15 Nov 2013, 03:29 PM Reply Like
  • yep. totally impractical. energy policy is all about politics as opposed to productivity.
    16 Nov 2013, 12:22 AM Reply Like
  • 100% correct.
    16 Nov 2013, 11:43 AM Reply Like
  • Just the same as farm subsidies, and oil company subsidies - white collar welfare program....
    17 Nov 2013, 10:22 PM Reply Like
  • Isn't that number still too high. Recalled reading the actual number should be around 12 - 13 billion.
    15 Nov 2013, 03:33 PM Reply Like
  • the 15 - 15.52 billion gallon target includes biodiesel in addition to corn ethanol.
    the net effect will be roughly the same amount ethanol used as during 2013, roughly 13 billion gallons which is almost 10% of gasoline market
    ADM also said they expect to be competitive in the international (export) market, which is probably true as long as corn is in the 4 - 5 / bushel range, which will be in addition to above domestic demand
    the ethanol industry did this to themselves as they really poorly marketed their product, including but not limited to policies to incent car manufacturers to make more flex fueled vehicles, blender pump incentives.
    all said, there is a market for fuel ethanol but it needs to be marketed not forced into the market.
    15 Nov 2013, 03:45 PM Reply Like
  • Sure looks like some of Main St greed has been put in its place. My bank also never traded in mortgage derivatives either.
    15 Nov 2013, 04:06 PM Reply Like
  • I have a friend that had a boat. As soon as he started using gasoline with ethanol his fiberglass tanks began to deteriorate. It seem gas in a non electric conductor, ethanol is an electric conductor and the fiberglass tank was being attacked by electrolysis.
    15 Nov 2013, 04:52 PM Reply Like
  • So what % of ethanol will be in gas now? 10%? The volume of renewable fuel listed in gallons has little meaning if we don't know how much nonrenewable fuel it's going into
    15 Nov 2013, 06:01 PM Reply Like
  • i think the % mix is the same, but they do not need to provide as many gallons of it. Folks i know who have tried it say you its cheaper but gas mileage drops with it..........they hate it.
    15 Nov 2013, 06:13 PM Reply Like
  • The government mandated gallons (assuming they knew how much gas would be needed in the future) not %. Thus as the demand for fuel unexpectedly did not increase but the ethanol requirement did, the 10% fuel wall was going to be broken. Refiners were forced to buy RINs (renewable credits) to take the place of ethanol in order to keep the total blend below 10%. Those RINS went up 10x in price. Additionally, since export sales didn't require RINS, the refiners exported more thereby keeping gas prices in the US higher. Just another example of where the government new better than the market and therefore tried to "help" its citizens.
    16 Nov 2013, 11:23 AM Reply Like
  • Very insightful comment.

     

    Sounds like you have an energy background.

     

    Thanks for sharing your wisdom with us.
    17 Nov 2013, 04:38 PM Reply Like
  • Darren: If the government mandated the mix in this fashion it shows how stupid these people are. Why not regulate ethanol in terms of mixture % so it is safer for vehicles and more efficient for gas mileage? There must be a reason but maybe you can help me understand this.
    22 Nov 2013, 07:35 AM Reply Like
  • A rare bit of common sense from government... The ethanol program makes no sense for anyone but corn growers and ethanol refiners. As a lifelong environmentalist, I find it stupid and counterproductive; as a fiscal conservative, it's simply infuriating.
    15 Nov 2013, 06:54 PM Reply Like
  • We need to do away with ethanol all together. It was a bad idea when Bush signed it. It is bad for the environment. Bad for cars. It benefits no one but a bunch of crony farmers that should be spending their time and efforts growth food for people and livestock.

     

    There is an oil production boom in America. We don't need ethanol. While we are at it we should do away with the EPA and the Department of Energy. They cost tax payers too much and are doing more harm than good to the country's economy.
    15 Nov 2013, 07:07 PM Reply Like
  • Well said!!!!
    17 Nov 2013, 10:24 PM Reply Like
  • But the government is so much smarter than all of us. After all, they are in government.
    1 Dec 2013, 03:28 PM Reply Like
  • The 15.2bn is 3bn below what the previous 2007 law mandated for 2014. However it is still slightly above the 2013 mandates. Does this mean that the blend wall will still be an issue in 2014 forcing mandated refiners to purchase biodiesel or RINS.

     

    Or has this proposed legislation somehow circumvented the whole blend wall issue please?

     

    Any views appreciated
    15 Nov 2013, 07:26 PM Reply Like
  • The wall remains. This isn't new news. On 10/18 an excellent article by Tristan Brown here on SA, which went into all this:

     

    http://bit.ly/17YHb7S
    15 Nov 2013, 11:12 PM Reply Like
  • It isn't renewable at all because, generally, you need to burn coal or natural gas to produce ethanol, and it has a lower return on energy invested than traditional gasoline. What a joke. Just another government handout to farmers that is rightfully getting cut.
    15 Nov 2013, 08:45 PM Reply Like
  • So why did PEIX rally on this? Am I the only one that thinks this is a news item that would make biofuel companies sell off (flush) on?
    15 Nov 2013, 11:54 PM Reply Like
  • No, you're not the only one who noticed that, but I don't know why either. Considering the kinds of logic that typically goes into these things, maybe the government pays them not to produce ethanol so the less ethanol they produce the more money they make?
    16 Nov 2013, 07:56 AM Reply Like
  • it should be abolished altogether.
    16 Nov 2013, 12:23 AM Reply Like
  • In our area if you want to buy non-ethanol gas you go to Phillips 66 (PSX).
    16 Nov 2013, 12:40 AM Reply Like
  • run
    check the small print on the gas dispenser.
    16 Nov 2013, 08:35 AM Reply Like
  • This will have some impact on the ethanol producers but not as much as you think. Cheap corn plays a big role and it will likely get cheaper. The price dynamics for the oil refiners are such that it can be advantageous for them to blend high levels at times. The refiners can make money on it if they're positioned appropriately. Also, export opportunities will help the ethanol biorefiners.
    16 Nov 2013, 08:13 AM Reply Like
  • C B
    go with Valero (VLO) largest oil/ethanol refiner.
    16 Nov 2013, 08:39 AM Reply Like
  • Im in CLMT as of right now. I like VLO, HFC and WNR with their recent news on NTI. All refiners will bounce on Monday.
    16 Nov 2013, 08:48 AM Reply Like
  • I'd personally take PSX over a pure refining play like VLO. Better to have the diversification
    16 Nov 2013, 09:47 AM Reply Like
  • Public comment period begins now
    This announcement by EPA which goes into public comment period affirms trade expectations via the leaked document fairly closely.
    The future growth on the back of mandated demand in the RFS-2 policy is curbed significantly. While mandated demand does not define domestic nor export demand, growth in biofuels will be more market sensitive in the future rather than totally policy driven as it has been. Biodiesel industry probably hurt the most by this as it can run 1.7 B g w/ subsidies. The tax credit decision at year end becomes much more important.
    16 Nov 2013, 08:47 AM Reply Like
  • Problem is, the program was based on gallons vs percentage from the beginning.

     

    Back from a time when perpetual growth in usage was assumed.

     

    The model is no longer applicable, hence an adjustment was truly needed.

     

    Ethanol is better for human consumption than as a motor fuel.
    16 Nov 2013, 08:55 AM Reply Like
  • I'll drink to that 1980...
    17 Nov 2013, 04:34 PM Reply Like
  • Agreed, especially given the advanced fuels have not come to fruition yet. They will though but it will still only be a small piece of the pie. Ethanol will remain but it'll definitely be more market sensitive now. I wouldnt exactly be celebrating.
    16 Nov 2013, 09:04 AM Reply Like
  • Fyi, Dairy farmers hated the Ethanol mandate.
    16 Nov 2013, 09:36 AM Reply Like
  • Why does this have to reported as "In victory for oil industry?" How about, "In victory for consumers and those who adhere to common sense."
    16 Nov 2013, 10:24 AM Reply Like
  • This EPA proposal, if executed, will be a small victory for American citizens who buy gasoline, for American citizens who pay taxes, and for American citizens who care about the environment; and will be the first small step toward unburdening the whole energy economy of the nation from carrying the load for biofuels, solar, and wind. It is also a victory for the 850 million in Africa and the millions more around the world that have been pushed into malnourishment by diversion of agricultural resources from food to fuel cultivation.

     

    The German consumers rejected gasohol a year ago and the EU cut back their biofuel mandates months ago. The Netherlands cut is massive wind subsidies in 2012, and the Spanish government is doing a complete about-face as they face ruinous debts from their "green" energy subsidies. The Germans are struggling to recast their Energiewende which has driven up the price of residential electricity to 40 cents per kWh and increased the use of coal and the nation's CO2 emissions for two consecutive years. The alternative energy subsidy rollback trend has been picking up steam in Europe and is just now crossing the Atlantic. The only positive ROI on all the massive subsidizes has been in the political coffers, and the citizens paying for those subsidize with artificially high petrol and electricity prices are in open revolt (witness the UK this week as a 10% hike was announced just in time for winter). The question is will the US lag or lead in the rollback.

     

    With a $17 trillion national debt, another looming debt ceiling crisis, federal budget by continuing resolution and mandatory sequestration, the recent IPCC report that recanted on all predictions of imminent climate disaster, and the rapidly degenerating political capital of an administration that has made "green" energy a signature initiative, my prediction is that the USA will more nimbly move to level the playing field by lowering the subsidies and mandates. The main obstacle for full rollback remains the specious claims for reduced GHG emissions with alternative energy that have already been proven false in the peer-reviewed literature, but have not yet made it into the public or political consciousness. In other words, the EPA continues to be the wildcard, and this agency has been far more concerned with politics than the environment since 1990.
    16 Nov 2013, 10:26 AM Reply Like
  • I finally got tired of taking my small engine carbs apart every year to get the corn starch looking gunk out of them and found a station that sells ethanol-free gas, at +$1 more per gallon. Your federal bureaucracy at work.
    16 Nov 2013, 02:39 PM Reply Like
  • rejiii - i buy 100% 89 octane gasoline from a local marina. The mower loves it!
    17 Nov 2013, 10:26 PM Reply Like
  • The ethanol mandate requires that we use our food supply to supplement the transportation fuel supply. This causes both energy and food costs to increase more than they would normally.

     

    That in turn causes more people to go on food stamps. The number of folks on food stamps has almost doubled since 2007.

     

    On top of that we have an expensive farm bill.

     

    One government mandate leads to expansion of other government mandates and programs. It's a big chain reaction.

     

    What happened to the free market?

     

    Ethanol cannot be transported by pipeline due to electrolysis and pipe corrosion.

     

    We pay nearly 3x the price of gas before the ethanol mandate era. Simply stupid.
    17 Nov 2013, 01:01 AM Reply Like
  • Someone questioned why the PEIX share price bumped up on this news, since they are primarily an ethanol producer. It happens that their shares have fallen big-time over the past few weeks (on rumors?). So perhaps having expected worse, the shares jumped on less-than-total elimination of the ethanol mandate. Just guessing.
    17 Nov 2013, 01:02 AM Reply Like
  • Ethanol is a scam at the EPA is moving in the right direction. JMO
    17 Nov 2013, 07:32 AM Reply Like
  • Ethanol ruins small engines. A nasty little side-effect that the folks who pushed for adding it to gasoline forgot to mention. Signs on pumps should say: "This gasoline contains 10% and using it will destroy small engines."

     

    I lost two weed-eaters and had to regularly clean my carburetor on my four-wheeler due to "gunk" build-up. Have no switched to premium gas for all of my small engines adding to the cost of taking care of my yard/property.

     

    Thanks to all the researchers who knew this would happen and did nothing. They did know, right?
    17 Nov 2013, 08:40 AM Reply Like
  • I lost a mower as well. I sometimes wonder what the true cost of this whole thing has been. Ethanol producers and corn farmers made money, as money was diverted from all over the country into the Midwest. But who has tallied up all the costs for things like ruined small engines? Seems like the ethanol industry got all of the benefits and none of the liabilities.
    18 Nov 2013, 08:08 AM Reply Like
  • Yes,

     

    Many machines ruined for me.

     

    I hope GPRE goes out of business.
    18 Nov 2013, 08:22 AM Reply Like
  • Ethanol is bad all the way around. It takes a great deal of energy to produce. It is tough on gas burning engines. The toll on the environment is heavy. The policy was not well thought out in the first place.
    17 Nov 2013, 11:55 AM Reply Like
  • FA
    As long as politicians do what lobbyist want and not what the people want, it's never based on logic only money. Whether you agree with Obama care or not they worked on it for three years and produced a product that has hurt a lot of people.
    17 Nov 2013, 01:31 PM Reply Like
  • It may make sense to ban ethanol in bio-diesel and require methanol to be used and to subsidize methanol from carbon dioxide, water and electricity instead of using natural gas as a feedstock.. flex fuel methanol engines could be mandated (to replace diesel only) and then there will be no oil imports except for gasoline exports... With all that extra electricity we have at night we should be doing something with it..
    17 Nov 2013, 02:35 PM Reply Like
  • Methanol has even lower energy density than ethanol and is far more damaging of engines. It's a step even further in the wrong direction.
    18 Nov 2013, 04:11 PM Reply Like
  • So many ill informed comments. The small engine gunk buildup...LOL. An alcohol has a cleaning effect. It is cleaning the gunk out of the carburetor that builds up over time. Ethanol has a higher oxygen content and burns cleaner. Its original mandate was for wintertime blending to increase the oxygen content of gasoline...thereby reduce carbon monoxide emissions. Winter time CO was a problem solved. Ethanol is a lower BTU fuel. It is perfectly fine to burn, particularly in higher concentrations. At a 10 percent level, the full benefit is not achieved. Brazil blends at a minimum of E25 and a higher entrained water content. What we have here is a collusive auto, oil and government changing the investment impact of billions of dollars over night. Shame on USEPA, the vanguard of the oil industry.
    19 Nov 2013, 05:37 AM Reply Like
  • Some information on ethanol to better inform the commentors (such as Blacklick Capital).

     

    Ethanol, unlike hydrocarbons, is a polar molecule that conducts electricity, greatly accelerating galvanic corrosion compared to pure petroleum. It is corrosive of metal, fiberglass, vinyl, polymer, and elastomeric seals used in fuel systems. It’s affinity for water (holds 27 times more water than gasoline) amplifies its corrosive nature. Any water also brings ethanol out of uniform solution with hydrocarbons and instead concentrates it in aqueous solution at the bottom of tanks or pipelines. This stratification also amplifies corrosion. This is why not a drop of ethanol is allowed in the nation's petroleum pipelines and ethanol must be trucked to refineries to be added to fuel at the end of the production process.

     

    35% of the mass of ethanol is oxygen, which is available from the air and is bad to prematurely combine with fuel in the gas tank as it accelerates the rate of polymerization (gumming up) of the fuel and thereby shortens its shelf life and the life of fuel filters.

     

    The 1990 Clean Air Act requirement to reduce carbon monoxide (CO) concentrations drove the addition of oxygenates into gasoline. However, US cars built since 1993 with fuel injection and oxygen sensors and engine computers automatically adjust the air and fuel mixture to achieve stoichiometrically balanced combustion and minimize CO emissions. This technology has obviated the need for oxygenates, and this is why federal law was changed in 2006 to no longer require oxygenates in gasoline. Only cars that are more than 20 years old, carbureted, and out of tune now stand any chance of having their emissions reduced by oxygenated fuels, while the rest of the US civilian and commercial fleet of gasoline vehicles suffer reduced MPG and thus increased total pollutants emitted per mile traveled as they transport unnecessary weight around as oxygen in their gas tanks and suffer from accelerated depreciation and reduced gas mileage (3% reduction for E10, 28% reduction for E85). The EPA continues to mandate ethanol for as a fuel diluter per RFS, not as an oxygenate, and in doing so, are harming the land and water and air quality they were created to protect.

     

    10% ethanol only boosts E10 gasoline's octane number by 2-3, and the octane of E85 is only 94-96. An engine designed to take full advantage of the small increase in compression ratio afforded by this small increase in octane can boost its horsepower by a similar small fraction, but can only recover 2-3% of the MPG lost due to the lower energy density of the fuel. Boosting the horsepower just means that the engine consumes the fuel's lower energy content faster; it does not mean the engine can miraculously add the missing energy back into the fuel that was never put in the tank at the gas pump.

     

    As of Jan 2013, the Department of Energy reported that, on an equivalent energy basis, ethanol was $1.19 more a gallon than gasoline and biodiesel was $0.82 more a gallon than petroleum diesel (http://1.usa.gov/Hn9xwv ). American Automobile Association surveys of pump prices reflect that E85 and biodiesel are consistently more expensive on an MPG-corrected basis than the highest-octane gasoline and conventional diesel (http://bit.ly/1dUAzWc). Both biofuels have so far failed to live up to the promises of reducing price and price volatility. As the DoE report reveals, both ethanol and biodiesel have clearly increased the pump price of E10 gasoline per unit of energy or mile of range delivered into the gas tank, not reduced it. And for this, taxpayers have been paying more than $6 billion a year since 2005 in crop program and RFS subsidies and tax breaks, and have been forced to sabotage their own engines with alcohol.

     

    It could be argued that RFS is just an extension of Obama's "Cash for Clunkers" program designed to increase domestic auto purchases by ruining the engines of perfectly good cars.

     

    Should we discuss tailpipe emissions and lifecycle greenhouse gas emissions next?
    19 Nov 2013, 04:40 PM Reply Like
  • Anecdotal, I know, but our lawn tractor (a cheap Toro Pony) will enter it's 8th season next year, and has always ran on the cheap E10 87-octane gas. Still starts first crank, every time. We have a pretty big yard, too (~2 acres), and it's usually dragging a lawn cart full of something to somewhere when it's not cutting the grass.

     

    Never cared much for gas-powered weedeaters, so can't speak to those. We either use the 18v rechargeable, or string some extension cords.
    19 Nov 2013, 05:14 PM Reply Like
  • TA "Ike",

     

    Thank you for your accurate rebuttal to blacklick

     

    Mine was deleted when I tried to correct some factual errors in I his post.
    19 Nov 2013, 07:03 PM Reply Like
  • I wont take the time to respond to all of your comments. Most are well known. The EPA issue of the article or policy update is about the blend wall, regardless of any engine efficiency discussion...which are always debatable. Most of your comments have been debunked in the lab in testing at EPA in terms of BTU, efficiency and emissions.

     

    The problem is that the oil industry has defeated alcohol in the market place due to collusion between big oil, big auto and big government, not efficiency or performance. Alcohol based engines ie high compression engines made to run on ethanol or methanol out perform gasoline engines significantly. At higher concentrations E30 and above there is an extreme performance difference to gasoline. As EPA concludes, engine efficiency is enhanced with higher blends of ethanol and is as high if not higher than diesel engine efficiency.

     

    http://1.usa.gov/188Sk5V

     

    The US fuel system is committed to gasoline delivery. You mention water in pipelines. Yes, it makes no sense to mix gasoline and ethanol in a pipeline. If these pipelines were dedicated to ethanol there would be no issue. You have different weights and density between water, ethanol and refined oil products. The heavier components drag back to the next pipeline product. Regardless of water issues. This is why you splash blend for downstream consumption.

     

    The blend wall is a contrived problem that was invented by the Obama EPA through their decision to cause auto emission compliance for Tier 4 engine standards with the testing fuel indolene and E10 ethanol. Obama essentially backdoored Congress and the RFS 2 requirements. If the automakers were forced to certify engines with Indolene plus E15 or higher they would have had to comply on emissions and fuel economy CAFE standards. Most importantly, the OBAMA GM and CHRYSLER would have been forced to warranty engines on fuels with the certification fuel at E15 or higher.

     

    This created the perfect storm. E10 cap...because E15 and 85 fuels were not warrantied. EPA is telling us that there is not enough gasoline to blend ethanol into at current RFS standard levels. Not true. There is not sufficient warranty coverage for car owners to allow for E15. Cars only warranty E10.

     

    EPA undercut ethanol mandates by not requiring the Automakers to comply on higher blends of ethanol. Their announcement basically validates their strategy to cap ethanol use and to prevent further penetration of higher blends of ethanol. Not for engineering reasons....so we can only assume for the protection of the auto industry and support of big oil marketshare.
    20 Nov 2013, 03:45 PM Reply Like
  • Ethanol mandate was not originally for wintertime CO reductions.

     

    Oxygenation alone was.

     

    Ethanol was only one way to achieve the required oxygen levels.

     

    Because of the corrosive nature of ethanol, Oil companies chose to use MTBE instead.

     

    Only after MTBE was banned due to groundwater pollution in many locales, was ethanol the only viable alternative remaining.

     

    Now ethanol is mandated due to lobbying buy the farm/food/green lobby, all to the detriment of consumers.

     

    http://bit.ly/hvDNaq
    20 Nov 2013, 07:24 PM Reply Like
  • Blacklick, thanks for bringing up MTBE.

     

    Ethanol blended gasoline has the same soil and groundwater contamination problem as MTBE-blended gasoline, except it is more insidious because it doesn't give itself away with the same strong bitter taste. Like the MTBE-blended gasoline it replaced, ethanol-blended gasoline is far more water-soluble than straight gasoline and leaches through the soil faster. When it encounters a water table, it mixes with the water instead of floating on top. Ethanol in gasoline extends the soil and groundwater pollution plumes 25-40% and inhibits natural gasoline biodegradation in the soil. US EPA has known about all this for 14 years but refuses to acknowledge it. A Blue Ribbon Panel specifically formed in 1999 to address the question of fuel oxygenates alerted the EPA to this problem and recommend ending the use of all oxygenates in gasoline because the environmental damage outweighed the benefits (Blue Ribbon Panel on Oxygenates. Achieving Clean Air and Clean Water. Environmental Protection Agency, September 15, 1999. http://1.usa.gov/1fmphhx).

     

    Ethanol also makes open water fuel spills more difficult to clean up because the increased miscibility of ethanol-blended fuel allows it to mix with the water instead of floating on the surface where it can be more easily collected or left to evaporate (http://bit.ly/1fmphxL). It is becoming apparent that biofuel spills are more damaging and harder to clean up than conventional hydrocarbon spills.

     

    Because of the widespread groundwater contamination from MTBE, the EPA implemented a continuing program of MTBE surveillance testing. However, since 1999, the EPA has refused to implement a similar surveillance testing program for ethanol because they already know the answer and don't want the proof of soil and water contamination to force them to act. The EPA has been more concerned about protecting political agendas than the nation's soil, water and air since 1990.
    21 Nov 2013, 09:54 AM Reply Like
  • I think Blacklick is really from ADM or GPRE
    21 Nov 2013, 11:46 AM Reply Like
  • Ike,

     

    Thanks for the comment - actually, thanks for the in-depth education on ethanol! Corn needs to be used to feed people, and not a subsidized industry.
    29 Nov 2013, 11:47 PM Reply Like
  • @Ike --

     

    Yes, yes, and yes. Discuss them all. Corrosivity was a wonderful chapter. So few people pay attention to the corrosivity aspect, but the total environmental costs of that aspect are huge and haven't even begun to be felt yet. We will soon be doing a second Leaking Underground Storage Tank program this time pretty much solely because of ethanol. I'd drive 30 miles each way to avoid putting that stuff in my vehicle -- if only I was given the option. Wonder how much energy is going to be totally squandered by the corrosion of engines and vehicles by ethanol? I would bet a year's salary that when those kind of costs get added in, ethanol will be on the negative side of EROI in a big way, i.e., it cost a lot more energy than it ever produced.

     

    It is a genuine pleasure to read someone as knowledgeable as you on this subject. Lifecycle greenhouse is one of my very favorite chapters in the ethanol book. Don't forget to include figures on the additional land that got plowed (literally) into the greenhouse generation monster that ethanol is.

     

    Tailpipe emissions is one chapter I don't even know the full story. It was looking pretty ominous when I looked at it with 2% ethanol, and I have only seen some info on the 10% toxic brew. I'd love to hear more about that too.
    24 Dec 2013, 01:16 AM Reply Like
  • Perhaps Monsanto-- difficult to imagine anyone else so insistent not only on pursuing a course of action that has horrible consequences on all fronts, but brazenly pretending to believe it when the evidence is overwhelming. Think Monsanto and PCBs--by the way, you did know that Monsanto manufactured virtually every single one of them and wouldn't quit until they finally got a law crammed down their throat. That is Monsanto.
    24 Dec 2013, 01:37 AM Reply Like
  • Blacklick,

     

    Please let us know when you find the guy keeping the 200MPG carburetor under wraps too.
    19 Nov 2013, 08:31 AM Reply Like
  • I thought the government "took care of" him...
    19 Nov 2013, 07:35 PM Reply Like
  • No, he committed suicide. Shot himself in the head, twice ;)
    27 Dec 2013, 11:09 AM Reply Like
  • 1080xls SENT A PRIVATE MESSAGE TO OUR MAILBOX BELOW:

     

    Your comment re ethanol had to be the most ignorant post of all time on SA.

     

    Now just read the rebuttal from the Navy Pilot that made you look like a fool.

     

    You obviously don't even know what a "Closed Loop" fuel injection system is.

     

    You should really refrain from posting on subject matter in which you obviously know nothing about.

     

    Especially if you don't want to embarrass yourself.

     

    COMMENT: blocked

     

    20 Nov 2013, 02:29 PM Reply Like
  • Glad you got the message.

     

    By all means, let us know if you need any more help on the subject matter.
    20 Nov 2013, 07:23 PM Reply Like
  • Interesting misinformation. Ethanol ie corn liquor is nontoxic and can be perfectly spilled anywhere in the US or world for that matter. It evaporates instantly. The denaturant used to spoil the corn liquor...to prevent the drinking of corn liquor.... is condensate typically, or gasoline itself which IS toxic. Take out the denaturant and you have something you can drink neat....moonshine. Try to drink MTBE, an ether, or any other octane enhancer...Benzyene, Toluene, Lead, MCPD, MMT; oxygenates including MTBE, TAME, and ETBE. You will poison yourself to death.

     

    The problem is that EPA treats ethanol as a lead replacement additive instead of a motor fuel. This whole string, I keep stating so you may understand the issue...is a marketplace issue. EPA is trying to limit the use of ethanol as a motor fuel....and treating it as an oxygenate by standard, and lead replacement program....ie.octane enhancer. USEPA has backdoored ethanol. There will be no substantial E85 fuel penetration in the marketplace, no infrastructure built, no competition to gasoline ...due to regulatory decisions that are not fully explained to the American consumer. No vehicles will be produced with high compression engines other than the racing industry.

     

    Mr. Keifer goes on about non issues. This is a market issue. Ethanol is perfectly suited for technology that is not readily available....high compression engines. The automobile industry has the technology. The government could force the technology. The government is limiting the expansion of ethanol and the higher compression, low emission, high gas mileage engines..... due to its favoritism over big oil and big auto through its engine Tier standards and CAFE standards. This could all be solved by raising the CAFE standards and lowering the emissions standards beyond current levels.

     

    Plain and simple. You can invent all the misinformation you want. USEPA engineering at the National Vehicle Fuels and Emissions laboratory has proven it time and again that ethanol is a superior liquid fuel when delivered in the right concentration....AND NOT FORCED TO BE BLENDED WITH GASOLINE. Gasoline is an inferior fuel by any measure. All you have to do is produce an engine that is made to run on ETHANOL...not blended gasoline with ethanol.

     

    Gasoline cannot be run in any engine by itself...it must be blended with an octane to prevent engine knock. It burns...too...hot.

     

    Ping!!!
    22 Nov 2013, 06:24 AM Reply Like
  • @Blacklick,

     

    High-compression engines are all around you -- they are called "diesels" and run on pure hydrocarbons, not alcohols because it is much more efficient and cost-effective.

     

    Spilling ethanol on the ground is not the problem, it is spilling ethanol-blended fuel on the ground or in the water. Please read and attempt to understand. The alcohol accelerates the leaching of the fuel into soil and water and slows its natural biodegradation, just like MTBE did. The toxicity problem is primarily the fuel itself, not the oxygenate.

     

    MTBE is less toxic than gasoline, which is why the EPA had no problem with it initially. But it's signature odor and strong bitter taste were not appreciated by people in their drinking water, and the presence of MTBE was accompanied by the other components of gasoline including benzene, toluene, and xylene (which are considered carcinogenic). If we put bitterant in the ethanol being blended in gasoline, it would similarly help us locate ethanol-assisted groundwater gasoline contamination.

     

    I am not "inventing misinformation," I rely on US government and science journal sources and provided hyperlinks to the references above. If you really want to see behind the curtain of the biofuels deception, read this and spend some time in the 29 pages of endnotes and 182 citations (http://bit.ly/1g5ErFt).
    23 Nov 2013, 11:41 AM Reply Like
  • GPRE CEO was on CNBC the other day.

     

    Actually had the nerve to say Ethanol was great and gives better fuel mileage than gasoline.

     

    That's why Nascar is using it, LOL.

     

    You just can't make this stuff up!

     

    When I don't need my engine to last more than 500 mi or start in zero degree weather. maybe I'll start using it.
    23 Nov 2013, 02:18 PM Reply Like
  • Mr. Capital,

     

    Assuming everything you say is true, why can't we buy Ethanol from Brazil for 30-50 cents per gallon cheaper? Why the high import tax on Brazilian ethanol? This is a free market economy in a NAFTA/WTO/Free market world, so why the need for an import tarrif? If you want people to accept ethanol, let Brazilian ethanol in the country and lower the cost of a gallon of ethanol/gas (10/90 mixture).
    29 Nov 2013, 11:51 PM Reply Like
  • JSIJIMMY

     

    How does one import ethanol without an infrastructure in place?
    Can you guess how much that would cost? What would cost to
    just bulk transport it from Brazil to a USA port?
    30 Nov 2013, 10:44 AM Reply Like
  • @Blacklick --

     

    I can attest to what Mr. Kiefer said about MTBE: I have experience working with ground-water contamination. Although less toxic, from a remediation standpoint, MTBE was a nightmare: It migrated further and faster that normal petroleum hydrocarbons. Although I haven't worked with GW contamination resulting from ethanol blended with gasoline, I would expect very similar results.

     

    It is most unfortunate, because normal petroleum hydrocarbon spills are fairly easy to handle compared to most things: They don't readily dissolve in water, so their migration is typically substantially more limited than with compounds that do. They are also a floater, and I can't tell you how helpful that is.
    23 Dec 2013, 08:37 PM Reply Like
  • NYCTexasBanker (interesting name) - I cannot answer your questions because I have no answers. My original questions were to Blacklick w/regards to his arguments. If ethanol is such a good deal, lets just tear all the "walls" down and buy from Brazil on the cheap....isn't cheaper/cleaner burning gas the reason ethanol was touted in the first place? And, why not buy ethanol from Brazil made with sugar cane that people do not eat vs. corn in the US that people do eat? Just questions and "food" for thought...
    23 Dec 2013, 08:42 PM Reply Like
  • jsijimmy,

     

    The reason, was the Farm/green lobby.

     

    It was also purported as "national security to reduce buying & importing oil from people that hate us.

     

    It was never about cost. although it is more efficient to produce ethanol from sugar vs Corn.

     

    What makes you think there was any more rational reason?

     

    If you like your plan, you can keep it.

     

    http://bit.ly/hvDNaq

     

    http://nws.mx/J3KHBv
    23 Dec 2013, 08:48 PM Reply Like
  • 1980xls - ty for the comment... The point for all of my questions was just this point (similar to what you say) "there was/is no rational reason for ethanol - only good sounding ones...." If the people who truly supported ethanol for all the "rational" reasons believed it, we would be buying from Brazil, but it is not so now, nor will it ever be. As all who drive ethanol compatible vehicles are aware "mileage will be decreased by up to 30% when using 85% ethanol fuel..." Of course, the cost should match that reduction, but it does not so here we are...
    23 Dec 2013, 08:57 PM Reply Like
  • jsijimmy,

     

    To the best of my knowledge, the Brazilian ethanol tariff has expired.

     

    Sugar is hitting massive lows.

     

    US gov't has even been buying surplus sugar at a loss in recent weeks.

     

    It should get cheaper, but that does not make it a good motor fuel.

     

    They should use it to make cheap Rum :)
    23 Dec 2013, 09:03 PM Reply Like
  • JSIJIMMY
    I'm NYC born & raised who has a very thick NY accent so when I was drafted and sent TX for medic school I was given the nickname New York. After the army I worked for one of the largest international banks and the nickname followed. After retiring from banking I worked at a technology company where I got the nickname "the banker" for my financial literacy talks. When I retired to Texas due to health reasons. I just combined my nicknames and places I lived into one.
    The reason for my question was more technical because the first problem is tariffs by the US government. Ethanol can not be sent by pipeline because of corrosions. And special interiors would be needed on ships for its transport. I was referring to the extreme
    cost that it would take to move the ethanol. I personally can't understand why anybody would use a food source for anything other than food. I know it's the money for the farmers but it's also shows what unintended consequences can happen.
    23 Dec 2013, 10:18 PM Reply Like
  • @1980XLS --

     

    Some major good links -- thanks.

     

    You will want to check out T.A. "Ike" Kiefer's (comment above) article and book: The man flat out has the info and has put it together into the very ugly picture it is. He GETS it.
    24 Dec 2013, 01:01 AM Reply Like
  • BLACKLICK CAPITAL

     

    National Vehicle Fuels and Emissions laboratory is part of the EPA
    and has in the passed issued questionable reports.
    22 Nov 2013, 08:25 AM Reply Like
DJIA (DIA) S&P 500 (SPY)