CAP’s Jake Caldwell, Director of Policy for Agriculture, Trade and Energy provides his insight into the EPA’s decision to increase ethanol mixtures in gasoline.
After eighteen months of review, the Environmental Protection Agency (EPA) announced today that it is willing to approve higher blends of ethanol in newer vehicles, but will conduct ongoing testing to assess whether such a boost in ethanol blends is appropriate for 2006 model or earlier cars and trucks.
Today’s EPA decision is the correct one. The partial approval of higher ethanol blends is based on test results in newer vehicles and provides some much needed breathing room to allow producers, refiners, and consumers the option to blend more ethanol with gasoline and reduce our dependence on oil in the transportation sector.
But, we also need to stay focused on the other big factors governing ethanol policy in the United States.
EPA’s move to partially grant a waiver and allow the voluntary blending of fifteen percent ethanol and eighty-five percent gasoline — E15 — is in response to an ethanol industry petition led by Growth Energy that seeks to avoid the “blend wall” by ensuring additional capacity for ethanol use in U.S. motor vehicle fuel. EPA is also proposing a labeling system on fuel pumps to enable consumers to choose the fuel and blend of their choice for their vehicle.
Now, we need action from Congress and the White House on the remaining pieces of the ethanol policy puzzle, namely: promoting advanced biofuels that deliver measurable lifecycle greenhouse gas emissions reductions, eliminating the current 54 cent import tariff on imported biofuels, boosting biofuel distribution infrastructure, and phasing out the existing blender’s credit in favor of a variable and performance-based producer tax credit.
EPA’s approval of E15 in newer cars is not without controversy. Automakers and small engine manufacturers worry the new blend may corrode rubber engine components and attract water to fuel. Livestock producers and the food industry have raised concerns regarding the impact of additional ethanol production on feed and food prices. Public health advocates and environmentalists have noted the potential for increased smog and environmental degradation from increased corn and ethanol production.
These are legitimate concerns and deserve careful attention. For the most part, today’s EPA waiver approval reflects a cautious approach and importantly, a willingness to constantly monitor and review the science and impacts of today’s decision going forward. Initially, today’s action will affect only eighteen percent of the vehicles in the U.S., and EPA has pledged to await further testing results before expanding eligibility for E15.
Thanks to the Renewable Fuel Standard (RFS), the “blend wall” is real. Recent corn price spikes (a 50 percent increase since June) are also placing additional pressure on the traditional ethanol industry and inflating operating costs. The RFS implements the mandate imposed by Congress in the 2007 energy bill that requires biofuels production to grow to 36 billion gallons by 2022. Significantly, 21 billion gallons of this total must come from advanced biofuels. Traditional biofuels such as corn will account for only 15 billion gallons. Any additional biofuels must achieve greenhouse gas emissions reductions of 20 percent less than the gasoline being displaced by biofuels.
Despite the difficult market and volume challenges facing corn-based ethanol, this announcement is clearly a “win” for the ethanol industry. The combination of Congress’ RFS mandate to produce 36 billion gallons of biofuels by 2022 and, now, the boost in the ethanol blend to E15 for late-model cars and trucks, should allow sufficient flexibility in the industry to support reform of key aspects of overall biofuels policy.
One idea: Eliminate the 54 cent import tariff that raises costs to all consumers, and shift the 45 cent blender’s credit to a variable and performance-based producer tax credit that rewards advanced biofuels’ producers for lifecycle greenhouse gas reductions. A new performance-based producer tax credit will save taxpayer’s money, reduce the deficit, and help ensure the most innovative and efficient biofuels make it into the tanks of our cars and trucks sooner, rather than later.
Biofuels are not the only solution to our transportation fuel challenges, but they have an important role to play. With the appropriate incentives, biofuels can play a direct role in diversifying our energy sources, creating jobs in rural communities, and cutting our dependence on oil. Today’s EPA announcement can be a springboard for a more comprehensive biofuels policy. We should take this opportunity to build on a solid industry foundation and chart a new course for biofuels in the United States.
– Jake Caldwell
JR: I am less sanguine about this move than Jake, because I have more doubts that we will soon get a sufficient quantity of next-generation biofuels that truly have lower GHGs emissions when all impacts are accounted for. What do you think?
Related Posts:
- The Fuel on the Hill “” The Corn Supremacy
- California may rule corn ethanol is not a globlal warming solution
- Switch to Corn Promotes Amazon Deforestation
- More corn ethanol = Bigger Gulf dead zone
- Let them eat biofuels!
- Can words describe how bad corn ethanol is?
- About those two studies dissing biofuels
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Increasing the ethanol content in our fuel will raise world grain prices – which will dramatically increase the number of people in the world who are undernourished. Runge and Senauer argue in this report that rising food prices will have the effect of increasing the world’s undernourished from 900 million to 1,500 million.
http://www.foreignaffairs.com/articles/62609/c-ford-runge-and-benjamin-senauer/how-biofuels-could-starve-the-poor
Skeptical of biofuels, mainly based on what I’ve read here and related blogs.
The best way to reduce fuel consumption is carpooling. Your MPGPP (MPG per person) instantly doubles, triples or quadruples. Is there a killer app for carpooling that uses location based tech and runs on a smartphone? If there was an easy way to coordinate rides and a critical mass of people started doing it I think it could work. Here in DC we do still have ‘slugging’ which is instant carpools for HOV roads. (http://www.slug-lines.com) Could this concept be extended everywhere if fuel prices rise enough?
I agree with your assessment Joe.
Its naive for the author to think its possible that congress is going to strip away the protections (tariffs for offshore ethanol) and tax credits for corn ethanol – those interests are way too politically insulated.
“Reduce our dependence on imported oil”- sure, but what’s the point if ethanol actually causes more emissions per gallon than gasoline? Or, as Mark pointed out, reducing the global food supply?
My math says that these biofuel laws will reduce vehicle climate damage by less than 1% in 2022. I’m underwhelmed, considering the potential food problems involved.
As I understand the numbers above, biofuels by 2022 will emit just 12% less GHG per gallon, on average, than the fossil gasoline. (20% less for 21b of 36b gallons). Then that biofuel gets diluted to 15% of what goes in the tank. So even if nearly every vehicle in USA were to use the maximum E15 blend, climate damage decreases only 1% for ICE vehicles.
Worse, in my thinking, is the greenwash. Saying that biofuels are a significant part of the climate solution will lead people to believe that internal combustion engines in vehicles are compatible with a stable climate. This will be just the “plausible deniability” that consumers and politicians are looking for to continue fossil-fueled infrastructure-as-usual.
Everyone seems to forget also that ethanol is a less efficient fuel, so you get fewer miles per gallon. E15 will mean everyone has to fill up their tank more often.
I’m sure Big Agriculture will be happy, though.
Ethanol as currently practiced is at least 80-90 percent scam.
There is a place for biofuels when they scavenge energy currently wasted. And a place in the future if they can be produced with a reasonable use of inputs. How can we possibly tell what uses are reasonable? By pricing inputs, and externalities, with an eye to reality!
Using fossil fuel and land needed for food production in a subsidized manner to produce ethanol is a dumb way to enrich folks with good lobbyists.
How much water is used to produce a gallon of ethanol? Well, at the ethanol plant it takes somewhere between 3 to 6 gallons of water to get 1 gallon of ethanol depending on the method. That DOES NOT take into account the water needed to grow and harvest the corn.
How much water will it take to produce fuel from the still experimental next generation sources? We don’t know but it will not be cheap. It will cost a lot of water.
Isn’t it wonderful that these experts who promote biofuel have done the research and determined that the US has massive and unlimited water resources? These experts say we have plenty to sustain the expected growth in water demand for agriculture, industry, electrical production, and human consumption with plenty in excess for burning as fuel. Let’s build that solid industry! …Did you know that several counties have ALREADY turned down ethanol plant construction BECAUSE THEY DID NOT HAVE THE AVAILABLE WATER?
So let’s take valuable farm land; burn fuel, consume water, and add fertilizer to cultivate corn; burn more fuel and consume more water to produce ethanol. Then let’s burn the ethanol. Genius! We get soil degradation, nitrogen pollution, water waste, GHG production, and we remove an important grain from the food supply. We have figured out a way to fuel transportation that does more environmental harm than gasoline or diesel. God I love American ingenuity!
“Ethanol producers such as Archer Daniels Midland Co. have pressed the EPA to raise the limit…”
http://finance.yahoo.com/news/US-Said-to-Allow-Rise-in-bloomberg-701169662.html
The main benefit of a blend seems to be enhancing combustion efficiency and reducing carbon monoxide emissions, especially from poorly-maintained engines. But I’d like to see evidence that boosting it beyond 10% has any real benefit. Fast-tracking fuel economy improvements and providing a graduated tax credit for the 10 most economical vehicles (hybrid or otherwise) would likely do more for the national energy picture. And how about a federal subsidy for the most innovative and practical mass transit systems that are growing ridership faster than the national average?