Showing posts with label ethanol. Show all posts
Showing posts with label ethanol. Show all posts

Monday, June 22, 2015

2015: Year of fuel standard reform?

From the files of Marita Noon at Energy Makes America Great, Inc.

The fact the Senate Homeland Security and Government Affairs Committee is attacking the Environmental Protection Agency’s (EPA) management—er, mismanagement—of the federal renewable fuel standard (RFS) is indicative of the growing frustration over both the agency and the RFS itself.

At the June 18 hearing, EPA’s Acting Assistant Administrator, Janet McCabe was grilled by Senators from both sides of the aisle. Senator James Lankford (R-OK), who chaired the Subcommittee on Regulatory Affairs and Federal Management, opened the hearing by calling the RFS “unworkable in its current form.”

In her comments, Senator Heidi Heitkamp (D-ND) claimed that the EPA’s management of the RFS ignored “congressional intent,” while creating “uncertainty” and costing “investment.”

The RFS has been under fire from all sides. It is the product of a different energy era—one in which presumed scarcity was the norm and reducing greenhouse gases was the concern. As a solution to both problems, Congress passed the Energy Policy Act in 2005, which established the first renewable-fuel volume mandate.

Two years later, through the Energy Independence and Security Act, the RFS program was expanded, requiring 36 billion gallons of renewable fuel be blended into gasoline and diesel by 2022 (annual targets were outlined).

The EPA website explains the RFS: “achieving significant reductions of greenhouse gas emissions from the use of renewable fuels, for reducing imported petroleum, and encouraging the development and expansion of our nation’s renewable fuels sector.”

The EPA administers the RFS and is required to finalize the next year’s proposed fuel volumes by November 30 of each year—something it has failed to do, as Lankford pointed out: “On June 1, the amounts for the proposed mandates 2014, 2015, and 2016 volumes were all released together…some say better late than never, but we need to take a serious look at why these delays are unavoidable every year now, under current law.”

The EPA has failed to meet the deadline every year since 2009.

When the 2014, 2015 and 2016 proposed volumes were released—in the middle of 2015—almost no one was happy. It reduced the amount of corn-based ethanol blended into gasoline, while slightly increasing the share of biofuels.

One day before the Subcommittee on Regulatory Affairs and Federal Management hearing on “Re-examining EPA’s Management of the RFS Program,” the American Petroleum Institute held a press call in which an unlikely coalition of RFS opponents—the American Motorcyclist Association, the Environmental Working Group and the National Council of Chain Restaurants— sounded optimistic that 2015 is the year for RFS reform.

The Environmental Working Group says the RFS has led to more greenhouse gas emissions. The leading chain restaurant trade group, the National Council of Chain Restaurants, is opposed to the RFS because of its alleged effect on food commodity prices.

Corn growers aren’t happy with the EPA’s new proposed corn ethanol volumes—covering 2014-2016—that are well below the benchmarks established by Congress. NPR’s Ari Shapiro, in a June 10 Morning Edition broadcast, stated: “Farmers in the Midwest have made good money growing corn for ethanol.

To do that, they’ve plowed up lots of grassland. And that cancels out much of the hope for carbon savings. While the EPA still supports ethanol, it wants to take some of the focus off corn, and put it back on greener ways of making ethanol.”

The National Journal states: “The EPA cited market forces, specifically lower-than-expected growth of non-ethanol renewables and lower gasoline use than projected, in lowering the ethanol mandates.”

One of the problems with the 2007 targets is that they are based on an assumption of increased fuel usage and require ever increasing “volumes,” or gallons, of ethanol be produced rather than a percentage of ethanol being blended into gasoline. The combination of more fuel-efficient vehicles, the economic downturn, and an aging population has contributed to “lower gasoline use than projected.”

Last week, I was on the radio with Baron Lukas, President of Vital Strategies Management Consulting, a firm working in the oil-and-gas sector. He explained: “With the advent of the U.S. shale revolution, we have a lot more oil and gas than we thought possible just a couple of years ago. 

This is a true paradigm shift in how we view our domestic energy situation. The impact is compounded by aging demographics for Japan, China, Russia, Europe, and for the short-term, the United States, which will reduce or at least dampen domestic and global fuel requirements—older people simply drive less and represent lower industrial needs.

Lastly, continuing technological advances are increasing fuel efficiency for a broad spectrum of applications, further placing downward pressure on hydrocarbon fuel demands. The bottom-line is a new reality of impending U.S. energy independence, continuing lower crude oil and natural gas prices, and far less dependence on OPEC for us and potentially for our allies.”

While EPA’s newly released renewable-fuel volumes don’t meet the law’s target of 22.25 billion gallons for 2016, they do increase year after year—with the 2016 target being an increase over current use.

Addressing EPA’s new numbers, US News reports: “The update calls for a 27 percent increase in what the EPA calls ‘advanced biofuels’ from 2014 through 2016, a catch-all category that includes cellulosic ethanol made from corn stalks, husks and other leftovers from a harvest, plus fuel converted from sugar cane, soybean oil, and waste oils and greases, such as from fast-food restaurants.

Combined with conventional corn ethanol, the proposed volumes overall rise 9 percent.”

Associated Press reporting adds: “The EPA said the standards set by the law cannot be achieved, due partly to limitations on the amount of renewable fuels other than ethanol that can be produced. Next-generation biofuels, made from agricultural waste such as wood chips and corncobs, have not taken off as quickly as Congress required and the administration expected.

Also, there has been less gasoline use than predicted.”

Increasing targets may encourage the renewable fuels industry. They are, however, unrealistic and, as the June 18 hearing revealed, are expected to be “reset.”

In pressing McCabe on the RFS and the consistently missed deadlines, Lankford asked: “How does RFS get back on schedule? Or, has Congress put a requirement on EPA that it can’t fulfill?” McCabe promised they were working on it and offered some vague explanations.

He then asked: “I assume you would agree there’s no chance we will hit the target for 2017 based on the statute required for 2017, so we’ll have to reset it…unless there is a tremendous amount of cellulosic ethanol that comes on board.”

Lankford continued, discussing the way the law was written to decrease corn ethanol use and increase cellulosic fuel, which he pointed out isn’t “possible based on production.” McCabe agreed that the cellulosic number would need to be decreased by at least 50 percent.

Later in the hearing, Lankford called cellulosic fuels “great in theory,” but acknowledged that “No one has been able to make it in a quantity that is affordable yet.”

He alluded to the fact that the cellulosic industry has struggled—with the largest manufacturer of cellulosic product going bankrupt. He said: “No one can seem to crack the code to be able to make this in a way that’s actually affordable.”

Others support Lankford’s view. On the June 10 NPR broadcast, Rob Mitchell, a researcher for the U.S. Department of Agriculture who studies how to make switchgrass grow for cellulosic ethanol, acknowledged: “We’re not producing any ethanol from switchgrass at this point on a large scale.”

Tim Snyder, agriculture economist with Agri-Energy Solutions, Inc., a Lubbock, Texas-based agriculture- and energy-consulting group, explains: “Because cellulosic ethanol is made from the ‘non-food’ portions of plants, this type of ethanol has gained widespread grassroots interest.

Lignocellulosic fibers are found in plant materials like stalks, leaves and stems. These cellulosic fibers contain long chain sugars that are tied together by lignin. Only the sugars are needed to produce ethanol. Lignin is necessary to keep these chains of sugar bonded together. However, lignin renders the sugars unusable, and so it has to be extracted.

Once the lignin is stripped away, yeast is added to convert the remaining cellulosic fibers or unbound sugars into ethanol. This description is extremely simplified, but should help to understand that adding steps to the production process that corn-based ethanol does not employ, adds to its overall production cost. Stripping lignin adds significant costs to the production process; even more than corn-based ethanol.”

Additionally, Snyder continues: “From the standpoint of land use, it takes significantly more land to produce ethanol from cellulosic materials than it does from corn. Additionally, it will take totally new transportation, initial processing and storage infrastructures that currently do not exist on a commercial scale.”

Clearly, to reference Lankford, the RFS is a program, required by Congress in 2005/2007, that can’t be fulfilled. No wonder it has so many who see the EPA’s failures as proof that 2015 is the year for RFS reform. Senator Jim Inhofe (R-OK), chairman of the Environment and Public Works Committee says: The mandate is in need of significant reform and oversight.”

Maybe, just, maybe, 2015 will be the year it happens.

(Author’s note: Please tune into America’s Voice for Energy, Thursday at 11:00AM ET to hear more from Baron Lukas discussing changing global demographics and the impact on energy demand and Tim Snyder on the economics of cellulosic ethanol and the impact on the ranching community.)
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The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy. She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column.
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Tuesday, March 17, 2015

Crony biofuel politics wag the dog

A governor and his son lobby for ethanol – and expect presidential candidates to endorse it from the files of Paul Driessen at CFACT.org

Your Choice  Food or Fuel
Talk about the Norfolk terrier tail wagging the Great Dane. If they are to have any hope of winning their party’s nomination, Republican presidential hopefuls better support ethanol mandates, Hawkeye State politicos told potential candidates at the recent Iowa Agricultural Summit in Des Moines.

“Don’t mess with the RFS,” Republican Governor Terry Branstad warned, referring to Renewable Fuel Standards that require refiners to blend increasing amounts of ethanol into gasoline. “It is the Holy Grail, and I will defend it,” said Rep. Steve King, another Iowa Republican. It is vital for reducing carbon dioxide emissions and preventing dangerous climate change and weather extremes, said others.

Corn ethanol is big in Iowa, the March 7-8 Ag Summit kicked off the state’s 2016 election debates, big-time GOP donor Bruce Rastetter made his fortune from ethanol and hosted the event, and the first presidential primary will be held in Iowa. Moreover, Gov. Branstad’s son Eric directs the multi-million-dollar America’s Renewable Future campaign, which co-sponsored the summit and hopes to convince increasingly skeptical voters that the federal government must retain the RFS or even expand it.

Failure to back the RFS means sayonara to any White House hopes, candidates were told. Appropriately chastened, many normally free market proponents dutifully took to the podium to endorse the mandates.

Some cited national security as a justification. The RFS reduces demand for foreign oil, Jeb Bush asserted. Biofuels are a way for America to “fuel itself,” said Mike Huckabee. “Every gallon of ethanol … is one less gallon you have to buy from people who hate your guts,” Lindsay Graham added.

Others focused on allegedly unfair competition. Rick Santorum said the RFS helps ensure that other competitive products besides oil and natural gas “are allowed into [the energy] stream.” Scott Walker recanted his previous opposition and said someday the ethanol industry won’t need these mandates, but right now it “needs government assistance,” because “we don’t have a free and open marketplace.”

Bush and Santorum added that ethanol boosts corn-state economies and creates jobs “in small town and rural America.” Chris Christie said the RFS is “what the law requires” and we need to comply with it. Rick Perry seemed to say it’s time to end federal mandates – and let states pick winners and losers.

That’s fine. But now that they have bowed to the biofuel gods, kowtowed to the small cadre of Iowa corn growers, sought the blessings of crony capitalist campaign contributors, and repeated the standard deviations from facts about green energy, climate change and national security, perhaps they will pay closer attention to other candidates, and to what’s actually happening in the energy and climate arenas.

Presidential hopefuls Marco Rubio, Ted Cruz and Rand Paul remained firm in their belief that the RFS should be phased out now. Cruz has joined Senators Mike Lee (R-UT), Pat Toomey (R-PA), Dianne Feinstein (D-CA) and others in sponsoring bills to abolish the corn ethanol RFS over five years.

If refiners and gas stations really are working with big oil to cut off access, Cruz suggested, “there are remedies in the federal antitrust laws to deal with that.” Otherwise “the right answer” is to let biofuels keep innovating and producing on their own, “and not have Washington dictating what is happening.”

Biofuel’s problem is not lack of access or unfair competition. It’s that the world has changed since ethanol subsidies and mandates were enacted in 2005. Back then, people more plausibly believed we were running out of petroleum, and global warming might become a serious problem.

But then hydraulic fracturing took off. This steadily improving 60-year-old technology turned the United States into the world’s #1 producer of oil and natural gas – and the U.S. is now importing one-third of its oil, instead of two-thirds. Gasoline prices have plunged, making ethanol much less cost-competitive.

Motorists are buying less gasoline than the 2005 and 2007 ethanol mandates envisioned, so refiners don’t need even 14 billion gallons of corn ethanol a year, much less the 15 billion statutory cap. They’ve hit a “blend wall,” and are being forced to buy far more ethanol than they can blend into E10 gasoline. They certainly don’t need an extra 21 billion gallons of cellulosic ethanol by 2022 – and innovators still haven’t figured out how to make that “advanced biofuel” at a profit.

Using tax dollars to prop up new subsidies, and imposing 15% ethanol gasoline mandates, would be a ridiculous response. The last thing we need is more citizen cash for crony capitalist cellulosic capers.

As to climate fears, no Category 3-5 hurricane has hit the United States since late 2005, the longest such period in more than a century, and perhaps since the Civil War. Tornado activity is also down. Arctic ice has returned to normal and Antarctic ice is at record levels. Sea levels are rising at barely six inches per century. The global frequency and duration of droughts, rainfall and snowfall is within historic norms.

Where is the crisis? The fossil fuel link? If human carbon dioxide emissions drive climate change, did steadily rising atmospheric CO2 levels cause all these blessings and normalcy, and average global temperatures to hold steady for 18 years? The far more likely answer is that the sun and other natural forces still dominate climate and weather systems, as they have throughout Earth and human history – and as actual, real-world temperature, climate, weather, solar and other observations strongly suggest.

IPCC, EPA, NASA, Obama, Penn State, East Anglia University and other climate models and alarms are completely at odds with what is happening on Planet Earth. No wonder alarmists are now so desperate that they blame every weather event on fossil fuels, and viciously attack scientists who point to reality … and threaten their Climate Crisis, Inc. money machine and regulatory power grab.

On top of all the corporate and scientist welfare, rip-offs and McCarthyite tactics, the manmade climate cataclysm mantra has also created a steady stream of corruption and scandal. Former Oregon Governor John Kitzhaber was forced to resign, after he and his fiancĂ© Cylvia Hayes profited (and failed to report $118,000 in income) from “green energy” schemes.

Current Oregon Global Warming Commission chairman Angus Duncan is also president of the Bonneville Environmental Foundation, which makes millions from regional and national sales of renewable energy and “Green Tag” carbon offsets; he also helped write the state’s climate change strategy and cap-and-trade system!

Tens of billions of dollars in wheeling, dealing, nepotism and corporate-environmentalist-political cronyism is intolerable. The Branstad governor-son arrangement raises sniff tests of its own.

Then there are the practical problems. A few corn and soybean farmers get rich. But meat and poultry producers pay far more for feed, and family food bills keep rising. Perhaps worse, says the World Bank, turning half of the U.S. corn crop into fuel creates aid and food shortages in poor nations. More people stay hungry longer, and more die of malnutrition and starvation. The UN Food and Agriculture Association says this has caused food riots and calls it an environmental “crime against humanity.”

Ethanol-blends get fewer miles per tank than pure gasoline. They collect water, corrode engine parts, and cause serious maintenance and repair problems for lawn mowers, chain saws, snowmobiles, emergency generators and other small engines. Classic car enthusiast and former Late Night host Jay Leno says ethanol “eats through fuel pump diaphragms, old rubber fuel lines or pot metal parts, then leaks out on hot engines … and ka-bloooooie!” The older cars catch fire – far more often than before E10 was required.

A new Oregon State University study says biofuels barely reduce fossil fuel use and are likely to increase greenhouse gas emissions. And US Department of Energy and other studies demonstrate that producing biofuels requires unsustainable amounts of land, water, fertilizers, pesticides and fossil fuels.

Not surprisingly, even many likely Iowa voters are now skeptical of federal ethanol mandates. Nearly half of them no longer support the RFS even if it helps some Iowa farmers. Republican presidential candidates who surrendered to a gaggle of Iowa corn growers and renewable fuel interests need to reflect long and hard on these ethanol and corruption realities, and the broader national interest.
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Paul Driessen is senior policy analyst for the Committee For A Constructive Tomorrow, author of Eco-Imperialism: Green power - Black death and coauthor of Cracking Big Green: To save the world from the Save-the-Earth money machine.
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Monday, December 29, 2014

Ethanol policy reform - Agreement?

Ethanol policy reform--the rare place where environmentalists and energy advocates agree by Marita Noon at EMAG, Inc.

Meet Marita Noon, Author of Energy Freedom
We all expect to pay a price for missing deadlines—fail to pay a parking ticket on time, and you may find a warrant out for your arrest. People have lost their jobs when they can’t get the work done on schedule. Students, who turn in papers late, get lower grades—maybe even fail the class.

But the Environmental Protection Agency (EPA) can apparently miss deadlines (many) with impunity. For the past two years, the EPA has failed to meet the statutory deadline under the Renewable Fuel Standard (RFS), requiring the agency to tell refiners how much ethanol to blend into the nation’s motor fuels.

In November 2013, the EPA did make an attempt to announce the proposed 2014 blend levels—which by then were already months past the legally mandated deadline. The EPA surprised and pleased the RFS opponents when it utilized its authority to adjust the mandate and took market conditions into consideration.

The EPA set the proposed 2014 standard to a level lower than 2013’s, even though the law requires increasing amounts. Ethanol producers, who were expecting the usual uptick, loudly opposed the reduction. They made so much noise, the EPA agreed to reconsider. To date, the 2014 standards have not yet been announced.

Then, on November 21, 2014, the EPA announced it would make a decision next year (2015) on how much ethanol refiners had to add to gasoline this year (2014)—yet, if refiners don’t meet the unknown requirement, they get fined. That’s akin to handing out the class syllabus after the students have failed the final exam.

With the goal of a reduction in foreign oil imports, Congress enacted the RFS in 2005 and revised it in 2007—which also provided incentives to America’s fledgling ethanol industry. At the time, gasoline demand was rising to an all-time high and oil imports comprised more than 58 percent of U.S. oil consumption. No doubt Congress believed it was saving American consumers from their addiction to oil.

Then the world changed. The U.S. economy plunged into its worst recession ever, unemployment soared, and gasoline demand fell sharply. Meanwhile, advanced drilling technologies, including the long-used hydraulic fracturing and newer horizontal drilling, began producing oil and natural gas from U.S. shale formations—which were previously uneconomic to develop—leading to America’s 21st Century energy boom.

Today the U.S. is the world’s largest natural-gas producer and is projected to pass Saudi Arabia as the number one oil producer. With crude oil supplies flooding the market, prices have been cut in half. Although fears over foreign-oil dependence have abated, the U.S. remains stuck with an ethanol mandate that is outdated, unworkable, and even harmful to vehicles, engines, and the environment.

Consider just some of the RFS’s flaws.

The law requires refiners to cap their blending of corn ethanol and use more cellulosic biofuels. Never mind that very little cellulosic biofuel has ever been produced—even according to EPA’s own data.

But that fact hasn’t prevented the EPA from levying millions of dollars in fines against refiners for failing to use the phantom fuel, without any assurance that enough cellulosic biofuel will ever be available. It’s kind of like receiving a bill for something you cannot buy because it doesn't exist, but you’re being charged anyway.

The nonpartisan Congressional Budget Office reports cellulosic biofuels are: “complex, capital-intensive, and costly.” Given the difficulty of producing them, capacity will “fall far short of what would be necessary to achieve the very rapid growth in the use of cellulosic biofuels required” under the RFS.

Then there is the “blend wall” problem. With less gasoline being sold than Congress anticipated, refiners cannot add ever-rising amounts of ethanol to gasoline without exceeding E10—the fuel consisting of 10 percent ethanol and 90 percent gasoline sold virtually everywhere in the country today.

To get around the blend wall issue, the EPA granted a “partial waiver” allowing the sale of E15, a fuel blend containing up to 15 percent ethanol for model-year 2001 and newer vehicles.

The EPA’s quick fix made a bad situation much worse, and all at the taxpayers’ and consumers’ expense. Ethanol levels higher than 10 percent can damage or destroy vehicle engines, according to a study conducted by the well-respected Coordinating Research Council.

Automakers are voiding warranties and refusing to be held responsible for mechanical problems caused by fuels containing more than 10 percent ethanol. And the marine industry warns of potential engine failures on various types of watercraft powered by the industry’s most common engines.

The Outdoor Power Equipment Institute (OPEI) is so concerned about safety hazards that it has launched a campaign telling consumers to “Look Before You Pump.” OPEI says equipment ranging from lawn mowers to “jaws of life” devices could be damaged by ethanol’s corrosive properties if used in concentrations above 10 percent.

Do want your expensive new lawn mower to quit the third time you use it? You certainly want life-saving devices to work on demand.

And that’s not all. Ethanol contains less energy than gasoline, forcing motorists to fill up more often, thereby causing more consumer expenditures. Ethanol production has driven up food prices here and abroad. Additionally, some studies indicate ethanol usage increases greenhouse gas emissions. Politico reports:
“Some green groups have vocally abandoned their support for corn ethanol, blaming the crop for polluting water supplies, wiping out conservation land and even increasing carbon emissions.”
According to Craig Cox, director of the Ames, Iowa, office of the Environmental Working Group, an environmental group that opposes the mandate as it is now structured:
“Corn ethanol’s brand has been seriously dented in the last 18 months. …it certainly doesn’t occupy the same pedestal that it occupied two years ago.”
But then, despite the fact that the EPA says decisions are made on merits, politics entered the scene. Rumors flew that the announcement of the 2014 blend levels was delayed to help Rep. Bruce Braley (IA-D) in his Senate bid.

Braley was pushing for an increase in the proposed levels and was hoping that he would be able to influence the White House to raise the targets. Additionally, a Republican-controlled Senate would be more likely to pass legislation to reform or repeal the RFS. Braley was quoted in Politico saying:
“Voters in Iowa look at where I stand on this issue and where my opponent stands, who’s supporting me in this campaign and who’s supporting [Ernst].”
The Politico story states: “Iowans say wavering on corn ethanol once would have been certain political suicide in a state where 90 percent of the land is farm acreage. So Braley sought to capitalize on Ernst’s expressed qualms about big government, portraying her as someone Iowans can’t trust to fight for them.”

Yet, Ernst, a Republican, won the Senate seat formerly held by Democrat Tom Harkin by 8.5 percentage points.

The EPA’s unwillingness to do its job by setting ethanol volumes—along with ethanol’s loss of “political heft”— should provide the impetus for ending the complex and wasteful RFS program. Ethanol is a rare topic where environmentalists and energy advocates agree.

Now is the time to get our elected officials all on board. As soon as the new Congress convenes in January, it should give the RFS an “F” and reform, revise, or even repeal it.

(A version of this content was originally published on Breitbart.com)
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The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy - which expands on the content of her weekly column.
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