The People of America's Oil and Natural Gas Indusry

The Ethanol Urban Myth

Jane Van Ryan

Jane Van Ryan
Posted June 23, 2010

Last weekend I was having a very pleasant conversation with my neighbors when the subject turned to the oil spill and the need for alternative energy. One neighbor said, "The oil companies don't want us to use alternative energy so they've bought all of the best technologies."

You've probably heard that old saw. It's one of several "urban myths" that have been circulating throughout America for several years. It's not true.

The oil and natural gas industry invests in emerging energy technologies for the purpose of bringing them to the marketplace. For example, the industry's investments in biofuels alone total more than $13 billion. Oil companies today are making renewable diesel from tallow; creating ethanol from sugarcane, waste products and algae; and geo-engineering special microbes to produce cellulosic ethanol and turn sugar into biogasoline and oil.

Furthermore, the oil industry doesn't view ethanol as a competitor. Rather, the industry is the largest purchaser of ethanol. As API's Fuel Team Manager Al Mannato told the House Agriculture Committee's Bioenergy Forum yesterday, almost 90 percent of all gasoline produced in the United States contains ethanol.

Al also explained that the oil industry is approaching the so-called "blend wall," the point when nearly all gasoline in the country contains the legal limit of 10 percent ethanol and no additional quantities can be added to the gasoline pool. Scientific studies and legal strictures prevent ethanol, which is highly corrosive, from being blended into gasoline at a ratio of more than 1-to-10, except for Flexible Fuel Vehicles (FFVs) which can run safely on fuel blends containing up to 85 percent ethanol.

The Environmental Protection Agency (EPA) has been considering allowing gasoline blends of up to 15 percent ethanol, but the resulting E15 fuel hasn't been adequately researched. Tests are underway now and will be completed by mid-2011.

API believes EPA should wait for the test results before the agency allows E15 to be sold into the marketplace. The oil industry's primary concern is the overriding need for customer satisfaction and program success at the consumer level. API cannot support a premature action that could put consumer satisfaction and safety at risk.

Does this mean the oil and natural gas industry is anti-ethanol? Of course not. It simply wants to continue producing safe and reliable fuels for consumers now and in the future.