Higher ethanol blends are on federal agenda

The latest federal energy act, passed last December, requires more ethanol to be produced than the United States could consume even if all cars on the road used E10 (a 10-percent ethanol blend sold in most urban areas), and the six-million or so flexible-fuel vehicles (FFVs) in the country actually ran on E85 (85-percent ethanol). In reality, very few FFVs use E85, because it is not available in most areas. And it’s more expensive than gasoline. (We reported on this in “Ethanol - the challenges with too much of a good thing.”)

This week, the federal government planted another stake in the ground on its way to building up the ethanol infrastructure to match ethanol production mandates. The Energy Department and USDA released its Action Plan (PDF) to meet the expanded production, distribution, and sales targets in the December 2007 Energy Independence and Security Act. The biggest development is a stated policy to increase the use of so-called “intermediate blends” of ethanol, such as E20 and E30 (20 percent ethanol/80 percent gasoline and 30 percent ethanol/70 percent gasoline, respectively). Since ethanol contains less energy than gasoline, this is likely to result in lower fuel economy for all cars running on E20 and E30.

Other targets include:
•    Producing new machinery to harvest new materials to make cellulosic ethanol.
•    Research and development to reduce the costs of producing ethanol from non-food products.
•    Considering the effects of increased production of biofuels on food supplies and animal feed.
•    Studying and building out the ethanol distribution network, including analyzing the feasibility of building dedicated ethanol pipelines from the Midwest to the East and West coasts.
•    Studying the health effects of increased ethanol use, including air, water, and soil quality.

These are only some of the problems we have found with ethanol. Despite its lower fuel economy, automakers can receive fuel economy credits for building FFVs. Therefore, most FFVs are large vehicles that get poor fuel economy even on gasoline, and worse fuel economy on E85. So, ironically, fuel economy credits may be increasing overall petroleum consumption in the U.S. Those fuel economy credits are scheduled to phase out 10 years from now in 2019.

As the road to widespread ethanol usage continues to be paved, we will continue to report here on the latest developments.

—Eric Evarts

Learn more about alternative fuels in our guide to driving green .

Comments

[dan]

I wish USDA and DOE and Congress would quit trying to pick winners in the Game of Energy®, or, given that that is an impossibility, they'd at least read up on Dupont and BP's bio-butanol development work. On paper it looks like a much better renewable replacement for fossil gasoline. Its major advantage IMO is reduced MPG reduction hit when compared to ethanol.

[PsySciGuy]

Eric Evarts needs to get his facts straight.

1. In the Midwest E85 is $0.50 to over $1.00 LESS expensive than E15 which is $.20 or more LESS expensive than regular unleaded.
2. Anyone can create their own blend. Fill your tank partway with E85 then complete the fill with regular or E15. Many NON-FFVs burn E50 just fine (50% E85 and 50% E15). We run E50 in our PT Cruiser, two Dodge Neons, and 1999 Dodge Durango. Our records show about 10% lower mileage. However, when hauling heavy loads the Durango "pings" on regular gas. It never pings on E50.
3. Human consumable corn is NOT used by ethanol plants. These plants use Roundup ready or other OGM animal feed corn. The resulting "waste" from the ethanol plant is then fed to cattle. Their manure fertilizes the animal feed corn fields. This efficient use of resources doesn't explain an increase in human consumable corn or beef prices.
4. Lower fuel economy is irrelevant when such vehicles produce considerably lower tail pipe emissions, at a lower cost of maintenance (longer engine life and less frequent oil changes), at a lower cost of fuel (in the Midwest), with lower oil imports, and a nearly zero carbon balance effect.

[Cale]

Am I the only one that feels that pushing an ethanol agenda during an economic recession is a bad policy?

[Brian]

The Government needs to get out of the business of mandating specific solutions to improving fuel economy and reducing dependence of foreign oil, etc. Instead, standards for fuel efficiency should be set and let the automakers figure out the best way to meet them. This subsidization of ethanol is making it even more expensive to not only fill up our gas tanks, but it's not as efficient (it may burn "cleaner", but we have to use more to go as far, which means more trucks which burn fuel need to haul more ethanol), and it's making food around the world more expensive.

[gratom]

Please get rid of Ethanol! My E85 truck dogs on it and burns it faster. This means I filled up more and paid more for gas. Since returning to Gasoline, 1 tank full last 2 weeks. Much better than the 1/2 tank in 2 days.

[Eric Evarts - Consumer Reports]

Dear PsySciGuy,

Consumer Reports takes its facts very seriously and only publishes information from our own testing and well-vetted sources. So we appreciate it when our eagle-eyed readers draw our attention to potential discrepancies.

With that, I would like to address the concerns you raise one by one:
1. Consumer Reports has to cater to audiences nationwide, not in particular regions. So we use national sources when they are available. In the case of ethanol, the prices we cite are from the Alternative Fuels Price Report, published by the Alternative Fuels Data Center, a division of the federal Energy Information Agency. (http://www.afdc.energy.gov/afdc/price_report.html )They survey fuel stations nationwide to gather retail pricing. On E85 and biodiesel, however, most of their data comes from the Midwest, since that’s where most stations that sell E85 are located. I am aware that many E85 stations in the Midwest subsidize the fuel to bring pricing more in line with gasoline after accounting for its lower energy content. However, in the AFDC report these stations are balanced by stations that sell it at higher prices in the Midwest and elsewhere.

2. While it is true that consumers can create their own ethanol blends at stations that carry E85, we think that most consumers probably won’t take the trouble to do so. Also, we don’t recommend the practice as ethanol has higher corrosive properties than gasoline, and automakers have told us they will not honor engine or fuel system warranties for cars other than FFVs using blends higher than E10. So while ethanol has higher octane than gasoline and might prevent knocking in cars afflicted with detonation, for most cars in good condition, higher ethanol blends will corrode fuel system seals and may damage the engine, according to automakers. These problems may not show up immediately but may nonetheless shorten the lives of some components. So we don’t recommend consumers mix higher blends in cars not designed for it.

3. Ethanol plants use distillers’ grain, not corn humans would consume. However, according to a government report we covered last June (http://blogs.consumerreports.org/cars/2008/06/fuel-food-price.html) increased ethanol use has had an effect on food prices by raising the cost of feed for pork and beef, and milk, among other things. You can read the full report: (http://www.doe.gov/media/Secretaries_Bodman_and_Schafer_Ltr_to_Sen_Bingaman.pdf). While the effect has been small, the report says the effect is real.

4. Ethanol does emit significantly lower emissions of regulated tailpipe emissions. This is a beneficial tradeoff for E85’s lower fuel economy. Researchers at Argonne National Laboratory have found that in an overall global analysis, ethanol has a beneficial effect on overall energy consumption and lower carbon dioxide emissions, as well as tailpipe emissions. However their estimates of the total energy savings from E85 is small — between 12 and 20 percent. Some prominent university researchers dispute that there is any savings, while ethanol advocates often discount the energy used to grow and transport ethanol and assume a 1:1 savings of petroleum. We believe the Argonne numbers are the best supported, so we rely on those.

In our coverage, we have found no subject that incites the kind of debate — from both sides — as ethanol. The federal government seems committed to expanding ethanol use, and we strive only to keep our readers well informed on these developments, not to pass judgment on whether the move to ethanol is good or bad. Many ethanol detractors accuse the government of manipulating data to make ethanol look more attractive than it is. While we don’t share this opinion, I find it interesting when we are criticized as anti-ethanol when we are relying on those same government statistics, which we feel are well supported.

[Mike]

Regardless of scientific data, experiments and lab analysis the facts that I see are for me in Florida (Orlando),where ethanol has been mandated, when switching from regular to 10% ethanol my gas mileage dropped from 20.5 to 17.5, a drop of 15% in miles driven per gallon of 'engery'. To travel the same distance I have to buy 15% more fuel the majority of which is gasoline not ethanol therefore my use of gasoline has increased by 15% or put another way if I was previously paying $4.00 for enough energy to make a 20 mile trip I now pay $4.50 for that same trip and deplete petroleum resources even more.
To counter the effect I switched from regular 87 octane to mid grade 89 octane with ethanol and my mileage appears to have improved back to approximately 20 mpg. On an economic analysis it would seem I am better off paying more for midgrade and getting better mileage. At the bottom line however I pay more for transportation, and the oil companies put more profit #tax break if they push ethanol#in their pocket. Another misguided 'save the planet' program #perhaps with good intent# in which'Consumer' equal 'stuckee' I admit my analysis would never pass the test of scientic rigour but perhaps CR should try it on average age #not new# vehicles.

[JLT]

Enthanol is a mindless waste of time and energy to make. Why are we using food to make fuel? Its insane! We have an unlimited amount of natural gas and its cheap. Natural gas right now is $2 a gallon. We need to retrofit our vehicles to natural gas and keep our 750 billion dollars here and for our own good. Plus, we can save environment.

[Brian J. Donovan]

Louisiana Enacts the Most Comprehensive Advanced Biofuel Legislation in the Nation
__________________

Advanced Biofuel Industry Development Initiative Benefits Consumers, Farmers and Gas Station Owners with Localized “Field-to-Pump” Strategy

Baton Rouge, LA (October 21, 2008) – Governor Bobby Jindal has signed into law the Advanced Biofuel Industry Development Initiative, the most comprehensive and far-reaching state legislation in the nation enacted to develop a statewide advanced biofuel industry. Louisiana is the first state to enact alternative transportation fuel legislation that includes a variable blending pump pilot program and a hydrous ethanol pilot program.

Field-to-Pump Strategy
The legislature found that the proper development of an advanced biofuel industry in Louisiana requires implementation of the following comprehensive “field-to-pump” strategy developed by Renergie, Inc.:

(1) Feedstock Other Than Corn
(a) derived solely from Louisiana harvested crops;
(b) capable of an annual yield of at least 600 gallons of ethanol per acre;
(c) requiring no more than one-half of the water required to grow corn;
(d) tolerant to high temperature and waterlogging;
(e) resistant to drought and saline-alkaline soils;
(f) capable of being grown in marginal soils, ranging from heavy clay to light sand;
(g) requiring no more than one-third of the nitrogen required to grow corn, thereby reducing the risk of contamination of the waters of the state; and
(h) requiring no more than one-half of the energy necessary to convert corn into ethanol.

(2) Decentralized Network of Small Advanced Biofuel Manufacturing Facilities
Smaller is better. The distributed nature of a small advanced biofuel manufacturing facility network reduces feedstock supply risk, does not burden local water supplies and provides for broader based economic development. Each advanced biofuel manufacturing facility operating in Louisiana will produce no less than 5 million gallons of advanced biofuel per year and no more than 15 million gallons of advanced biofuel per year.

(3) Market Expansion
Advanced biofuel supply and demand shall be expanded beyond the 10% blend market by blending fuel-grade anhydrous ethanol with gasoline at the gas station pump. Variable blending pumps, directly installed and operated at local gas stations by a qualified small advanced biofuel manufacturing facility, shall offer the consumer a less expensive substitute for unleaded gasoline in the form of E10, E20, E30 and E85.

Pilot Programs
(1) Advanced Biofuel Variable Blending Pumps - The blending of fuels with advanced biofuel percentages between 10 percent and 85 percent will be permitted on a trial basis until January 1, 2012. During this period the Louisiana Department of Agriculture and Forestry Division of Weights & Measures will monitor the equipment used to dispense the ethanol blends to ascertain that the equipment is suitable and capable of producing an accurate measurement.

(2) Hydrous Ethanol - The use of hydrous ethanol blends of E10, E20, E30 and E85 in motor vehicles specifically selected for test purposes will be permitted on a trial basis until January 1, 2012. During this period the Louisiana Department of Agriculture and Forestry Division of Weights & Measures will monitor the performance of the motor vehicles. The hydrous blends will be tested for blend optimization with respect to fuel consumption and engine emissions. Preliminary tests conducted in Europe have proven that the use of hydrous ethanol, which eliminates the need for the hydrous-to-anhydrous dehydration processing step, results in an energy savings of between ten percent and forty-five percent during processing, a four percent product volume increase, higher mileage per gallon, a cleaner engine interior, and a reduction in greenhouse gas emissions.

Act No. 382, entitled “The Advanced Biofuel Industry Development Initiative,” was co-authored by 27 members of the Legislature. The original bill was drafted by Renergie, Inc. Representative Jonathan W. Perry (R - District 47), with the support of Senator Nick Gautreaux (D - District 26), was the primary author of the bill. Reflecting on the signing of Act No. 382 into law, Brian J. Donovan, CEO of Renergie, Inc. said, “I am pleased that the legislature and governor of the great State of Louisiana have chosen to lead the nation in moving ethanol beyond being just a blending component in gasoline to a fuel that is more economical, cleaner, renewable, and more efficient than unleaded gasoline. The two pilot programs, providing for an advanced biofuel variable blending pump trial and a hydrous ethanol trial, established by the State of Louisiana should be adopted by each and every state in our country.”

State Agencies Must Purchase or Lease Vehicles That Use Alternative Fuels
Louisiana’s Advanced Biofuel Industry Development Initiative further states, “The commissioner of administration shall not purchase or lease any motor vehicle for use by any state agency unless that vehicle is capable of and equipped for using an alternative fuel that results in lower emissions of oxides of nitrogen, volatile organic compounds, carbon monoxide, or particulates or any combination thereof that meet or exceed federal Clean Air Act standards.”

Advanced Biofuel Price Preference for State Agencies
Louisiana’s Advanced Biofuel Industry Development Initiative provides that a governmental body, state educational institution, or instrumentality of the state that performs essential governmental functions on a statewide or local basis is entitled to purchase E20, E30 or E85 advanced biofuel at a price equal to fifteen percent (15%) less per gallon than the price of unleaded gasoline for use in any motor vehicle.

Economic Benefits
The development of an advanced biofuel industry will help rebuild the local and regional economies devastated as a result of hurricanes Katrina and Rita by providing:
(1) increased value to the feedstock crops which will benefit local farmers and provide more revenue to the local community;
(2) increased investments in plants and equipment which will stimulate the local economy by providing construction jobs initially and the chance for full-time employment after the plant is completed;
(3) secondary employment as associated industries develop due to plant co-products becoming available at a competitive price; and
(4) increased local and state revenues collected from plant operations will stimulate local and state tax revenues and provide funds for improvements to the community and to the region.

“Representative Perry and Senator Gautreaux have worked tirelessly to craft comprehensive advanced biofuel legislation which will maximize rural development, benefit consumers, farmers and gas station owners while also protecting the environment and reducing the burden on local water supplies,” said Donovan. “Representative Perry, Senator Gautreaux, and Dr. Strain, Commissioner of the Louisiana Department of Agriculture and Forestry, should be praised for their leadership on this issue.”

About Renergie
Renergie was formed on March 22, 2006 for the purpose of raising capital to develop, construct, own and operate a network of ten ethanol plants in the parishes of the State of Louisiana which were devastated by hurricanes Katrina and Rita. Each ethanol plant will have a production capacity of five million gallons per year (5 MGY) of fuel-grade ethanol. Renergie’s “field-to-pump” strategy is to produce non-corn ethanol locally and directly market non-corn ethanol locally. On February 26, 2008, Renergie was one of 8 recipients, selected from 139 grant applicants, to share $12.5 million from the Florida Department of Environmental Protection’s Renewable Energy Technologies Grants Program. Renergie received $1,500,483 (partial funding) in grant money to design and build Florida’s first ethanol plant capable of producing fuel-grade ethanol solely from sweet sorghum juice. On April 2, 2008, Enterprise Florida, Inc., the state’s economic development organization, selected Renergie as one of Florida’s most innovative technology companies in the alternative energy sector. By blending fuel-grade ethanol with gasoline at the gas station pump, Renergie will offer the consumer a fuel that is more economical, cleaner, renewable, and more efficient than unleaded gasoline. Moreover, the Renergie project will mark the first time that Louisiana farmers will share in the profits realized from the sale of value-added products made from their crops.