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EPA Won’t Waive Ethanol Mandate

Critics cited shortages of corn in wake of summer drought.

by on Nov.19, 2012

A corn showdown?

The Environmental Protection Agency has declined to waive a federal mandate setting increased requirements for use of ethanol in the nation’s fuel supply despite concerns about shortages of the corn used to create the fuel in the wake of last summer’s nationwide drought.

The agency, which oversees the ethanol rules, rejected a request by eight governors and 200 members of Congress – as well as many farmers dependent upon corn feed — but opposed by corn farmers who have been seeing a spike in prices as demand for ethanol increases. A senior United Nations official also sought a waiver by the Obama Administration to prevent possible food shortages around the world.

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“We recognize that this year’s drought has created hardship in some sectors of the economy, particularly for livestock producers,” said Gina McCarthy, the assistant administrator for EPA’s Office of Air and Radiation. “But our extensive analysis makes clear that congressional requirements for a waiver have not been met and that waiving the (ethanol rules) will have little, if any, impact.”

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Will E85 Vanish from the Market?

End of subsidy likely to further weaken demand.

by on Jun.17, 2011

If the House approves a measure already passed by the Senate, U.S. taxpayers will no longer subsidize ethanol fuels.

Members of the Republican-controlled House of Representatives will now get their chance to prove how serious they are about cutting the budget deficit – even at the expense of political sacred cows – when they consider a proposed measure eliminating nearly $6 billion a year in subsidies for ethanol  production.

The Senate has already approved its version of the bill, by a lopsided 73 – 27 vote that found even some farm state lawmakers agreeing to end the giveaway.  That measure would also lift a 54-cent a gallon tariff on biofuel from Brazil that had helped hold prices on ethanol and E85 fuels above what the market might have otherwise allowed.

Unless the measure falls flat in the House or receives an unlikely White House veto, ethanol-based fuels, such as E85, will likely become significantly more expensive. In turn, that could effectively kill its use as an automotive alternative fuel. But the cost to the nation’s farmers could be significant.

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While both of Michigan’s senators voted to maintain the subsidy for U.S.-made ethanol — reflecting the state’s large corn farm lobby — the mood has been clearly shifting in recent times.  Only a few years ago, General Motors had funded an elaborate “Go Yellow” marketing campaign designed to build support for E85, a fuel made up of 85% ethanol and 15% gasoline.  But industry insiders say GM and other makers had supported the use of the biofuel primarily because it let them slip through loopholes in federal fuel economy standards.

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Corn Ethanol is Just a Very Bad Deal, Claims a New Anti-Farm Lobby Advertising Campaign

More scientific testing is needed to explore possible safety and environmental dangers of biofuels, advocacy groups charge.

by on Jul.23, 2010

At stake here is not only the fuel economy, operating cost, and performance of your vehicle, but also potentially huge negative effects on all small engines.

Politics might make strange bedfellows, but when environmental and industry advocacy groups hop into the sack together it gets our attention.

This is precisely what’s happening with a newly launched advertising campaign that challenges the pork-driven, pay-to-play U.S. Congress to put aside the influence – critics say bribes – of the huge contributions from agribusiness and stipulate that “objective” scientific testing be conducted before allowing an increase in the amount of ethanol in gasoline. (See How a Bad Bush Administration Energy Policy Begets More Bad Policy?)

At stake here is not only the fuel economy, operating cost, and performance of your vehicle, but also potentially huge negative effects on all small engines, powering everything from lawn mowers, to outboard motors, to weed whackers, to chain saws – to name but a few.

Taxpayers currently subsidize corn ethanol at the rate of 45 cents a gallon, or roughly $6 billion last year.

From an automotive perspective there are two clear central issues:

  • The first is how to decrease emissions and our dependence on imports of foreign oil from terrorist supporting countries.
  • The second is a subset of the first: what if the biofuels we are using — ethanol, biodiesel, natural gas — really cause more emissions than they save?

That’s why how the EPA calculates the “life cycle emissions effects” is of such concern to the currently subsidized businesses, the agricultural lobby and various clean air special interest groups.

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Anti Lobbies!

The U.S. is under Congressional mandate to use increasing amounts of renewable fuels because of the Energy Independence and Security Act of 2007. EPA is responsible for revising and implementing regulations to ensure that gasoline sold in the United States contains a minimum volume of renewable fuels. The Renewable Fuel Standard program will increase the volume of renewable fuel required to be blended into gasoline from 9 billion gallons in 2008 to 36 billion gallons by 2022. At one point, the goal under President Bush was 35 billion/2017.

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U.S. DOE Announces $24 Million for Algal Biofuels

Federal agency releases its National Algal Biofuels Technology Roadmap along with some limited research funds to support it.

by on Jul.02, 2010

How about a tank of microalgae Botryococcus?

The U.S. Department of Energy has announced an investment of as much as  $24 million of your tax dollars to three research groups to explore the commercialization of algae-based biofuels.

Despite algae’s potential, touted for 50  years, many technical and economic challenges must be overcome for algal biofuels to find their way into your tank.

Developing cost-effective renewable transportation fuels is said to be a key component of the Obama Administration’s strategy to cut greenhouse gas emissions and move the U.S. toward energy independence – a goal that goes all the way back to the Carter Administration and the aftermath of the fuel crisis of the 1970s. This latest program from DOE is actually a revival of one that was dropped by Democratic President Bill Clinton in 1996.

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Fuelishness?

U.S. oil imports remain at more than 375 million barrels a month, close to the record of more than 400 million in spite of the ongoing Great Recession and failed Administration attempts to create jobs.

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Milestones: Ten Million Flex-Fuel Vehicles in Brazil

U.S. ethanol policy is muddled when compared with Brazil’s.

by on Mar.08, 2010

It's said that using biomass, cheap farm waste, could radically alter the economics of ethanol. The lower cost could end taxpayer subsidies, though the farm lobby holds powerful sway in the "pay to play" Washington scene.

Brazil’s 10 millionth flex-fuel vehicle was built last week, ready to be fueled by sugarcane- derived ethanol from an industry that is not government subsidized.

In the U.S. taxpayers are subsidizing inefficient corn-derived ethanol to the tune of almost $4 billion annually ($0.45/gallon federal production subsidy, plus state and local incentives), and the farm lobby and agribusiness are pushing for more taxpayer feed to be put into the trough by way of increasing the amount of ethanol beyond the 10% that is legally required to be blended into fuel.

That might be OK, except that ethanol is roughly 33% less fuel efficient than gasoline; so it’s another cost increase in the middle of the Great Recession. And at current prices the higher blend of U.S. made ethanol, E85, which could really help limit oil imports from terrorist supporting regimes, is not competitive with gasoline.

Worse, protective tariffs effectively stop the importation of ethanol that makes economic sense, but not political sense in pay-for-play Washington. (Click Here)

The production subsidy for ethanol applies to both domestic and imported ethanol, but the United States charges importers of ethanol a tariff of 54 cents per gallon and an ad valorem tariff of 2.5% of the value of the imported ethanol. This means countries such as Brazil that can produce ethanol much more efficiently than the U.S. are effectively blocked from selling it here. This protectionist policy also applies to other global markets.

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Alternative Views!

The Brazilian Sugarcane Industry Association (UNICA) represents the top producers of sugar and ethanol in the country’s South-Central region, especially the state of Sao Paulo, which accounts for about 50% of the country’s sugarcane harvest and 60% of total ethanol production.

In 2008, Brazil produced an estimated 565 million metric tons of sugarcane, which yielded 31.3 million tons of sugar and 25.7 billion liters (6.8 billion gallons) of ethanol, making it the number-one sugarcane grower and sugar producer in the world, and the second-largest ethanol producer on the planet, behind the United States.   (more…)

President Takes Steps to Boost Biofuels, Coal Use

More taxpayer subsidies are apparently underway as Administration recasts rhetoric toward job creation.

by on Feb.03, 2010

Energy independence or more pandering to big business lobbyists?

President Barack Obama today announced a series of steps his Administration is taking as part of its strategy to “enhance American energy independence while building a foundation for a new clean energy economy, and its promise of new industries and millions of jobs.”

The announcement comes as the Administration is under attack for its failure to create jobs despite promises to do so, and with unemployment at levels not seen since the Great Depression.

At a meeting of Republican and Democratic governors, the President proposed three measures would boost biofuels production and reduce dependence on foreign oil – all of them now cloaked as job creating.

The measures at first glance will be controversial, as they seem to require vast new taxpayer subsidies to special interest groups in the agriculture and energy industries. The administration is also under attack for growing deficits, of course, by the Republican party, which turned a budget surplus into a breathtaking deficit after eight years of rule, one that is only getting worse since the collapse of the financial markets in the fall of 2008 and the ensuing and ongoing great recession.

Perhaps the most controversial item as details emerge will be the President’s call for five to ten commercial demonstration projects to be up and running by 2016 of so-called “clean coal” projects, particularly carbon capture and storage (CCS).

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Fuelishness or News?

The President in a memorandum established an Interagency Task Force on Carbon Capture and Storage to develop a “comprehensive and coordinated federal strategy to speed the development and deployment of clean coal technologies.”

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Renewable Fuel Fight Over Agricultural Subsidies and Emissions Continues as EPA Works on Rules

Should taxpayers be subsidizing agribusiness to produce fuels?

by on Aug.07, 2009

EPA Adminstrator Jackson

At stake here, ultimately, is billions of dollars in taxpayer subsidies to agribusiness, and even the future of the whole bio-fuel industry in the U.S.

The EPA made public this morning an independent review of how it should calculate the life-cycle effects of renewable fuels on air pollution.

Normally this would be an arcane economic debate over methodologies, time periods, and at what rate to calculate/discount the value of gains over time. But at stake here, ultimately, is billions of dollars in taxpayer subsidies to agribusiness, and even the future of the whole bio-fuel industry in the U.S.

So a controversy has been growing among various self-interested factions since the EPA, under the Obama Administration, reversed its Bush-directed self and said greenhouse gases are a health problem, which will be addressed.

A contentious rulemaking process is now well underway.

From an automotive point of view there are two central issues. The first is how to decrease emissions and our dependence on imports of foreign oil from terrorist supporting countries. The second is a subset of the first: what if the biofuels we are using —  ethanol, biodiesel, natural gas — really cause more emissions than they save? That’s why how the EPA calculates the life cycle emissions effects is of such concern to subsidized businesses, the agricultural lobby and various clean air special interest groups.

The U.S. is already under Congressional mandate to use increasing amounts of renewable fuels. Under the Energy Independence and Security Act of 2007, EPA is responsible for revising and implementing regulations to ensure that gasoline sold in the United States contains a minimum volume of renewables. The Renewable Fuel Standard program will increase the volume of renewable fuel required to be blended into gasoline from 9 billion gallons in 2008 to 36 billion gallons by 2022. (At one point the goal under President Bush was 35 billion/2017.)

The new RFS program regulations are being developed with what the EPA euphemistically says is a “collaboration with refiners, renewable fuel producers, and many other stakeholders.”

Translation: Big bucks are at stake here, and lobbying will be intense.

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President to USDA: Expand Access to Biofuels Now

Agricultural Department has 30 days to get the money flowing.

by on May.05, 2009

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At the very least, the President is attempting to channel the huge taxpayer financed subsidies of agribusiness in a way that helps national security.

President Obama issued a directive this morning to Secretary Vilsack at the U.S. Department of Agriculture to “aggressively accelerate the investment in and production of biofuels,” by making use of renewable energy financing opportunities from the Food, Conservation and Energy Act of 2008 available within 30 days.

The order is an attempt by the President to make the U.S. completely free from importing foreign oil. It is also the beginnings of a transition away from corn-based ethanol to advanced bio fuels, as well as an attempt reduce greenhouse gas emissions that the EPA has identified as harmful. The estimated costs of the latest moves were not disclosed.

“President Obama’s announcement today demonstrates his deep commitment to establishing a permanent biofuels industry in America,” said Vilsack. “Expanding our biofuels infrastructure provides a unique opportunity to spur rural economic development while reducing our dependence on foreign oil — one of the great challenges of the 21st century.”

Vilsack also announced that he will help lead an interagency effort to increase America’s energy independence and spur rural economic development.

TheDetroitBureau.com was on a conference call with Energy Secretary Stephen Chu, Environmental Protection Agency Administrator Lisa Jackson and Secretary Vilsack when the announcement was made. 

This looks to be the beginnings of a promised comprehensive energy policy that will cut across the vast federal bureaucracy to take back control of U.S. energy use from off-shore based sources that are clearly not our friends. At the very least, it is an attempt to channel huge taxpayer subsidies of agribusiness in a way that helps national security. The President, thus far, has been unsuccessful at trimming such politically popular subsidies, even as the national debt reaches monstrous, unsustainable proportions of the gross domestic product. (more…)

Interest in EVs Gaining Ground

by on Feb.10, 2009

Interest in electric vehicles, like Chevy's Volt, is charging up

Interest in electric vehicles, like Chevy's Volt, is charging up

A new study from Maritz Automotive Research Group suggests consumer interest in new automotive technology is continuing to grow, particularly when it comes to electric vehicles.

Maritz’s Automotive Research Group has been tracking awareness of alternative fuels in its annual New Vehicle Customer Study (NVCS) since 2005, and the data show electric power growing as a primary alternative fuel among the current choices. Approximately 9 percent of consumers, who bought or leased a new vehicle in 2008, judge the electric-powered vehicle as the alternative fuel that was most appealing. As measured by the Maritz survey, the appeal of the electric vehicles has grown from 3.4 percent in 2006, to 6.6 percent in 2007 to 9.4 percent.

Another finding of the survey, which has held up in each of the past three years, was that interest is higher among those who purchased or leased a car rather than a light truck, suggesting a natural market divide could develop as more electric vehicles come on the market.

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Greener Ethanol a Step Closer to a Pump Near You

Nation's largest ethanol supplier has cellulosic pilot plant up and running in South Dakota

by on Feb.09, 2009

poets-projectThe holy grail of renewable fuels is a commercially viable process for converting cellulosic materials into convenient, combustible liquids that can power cars and trucks. The longstanding challenge is breaking down cellulose into smaller molecules that can be re-assembled into ethanol or other fuels.

Cellulose is the stuff of which plants are mostly made, and it’s comprised of a long, tough chains of sugar-like compounds that God created (or nature evolved, if you will) for the express purpose of resisting breakdown.

With their multiple stomachs, cows break down cellulose just fine. The problem is that they (more specifically, the enzymes in their guts) are rather slow about it compared to the rate at which it needs to be digested to supply any meaningful portion of the 160 billion gallons of gasoline we guzzle each year. Those enzymes and the biorefining processes that use them are still quite pricey compared to what it costs to refine petroleum, unless oil gets (and stays) much more expensive than it is today.

Nonetheless, progress is being made. A notable development was recently announced by POET Energy, the nation’s largest ethanol producer. POET has taken its cellulosic ethanol process out of the lab and into a pilot plant now up and running in Scotland, South Dakota, a small town about an hour and a half southwest of Sioux Falls.

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