Posted April 15, 2013
Sometimes a good chart is better than a whole boatload of words. The one below, from the Minnesota Department of Commerce’s Division of Energy Resources, has a lot to say about one important facet of the current debate over ethanol mandates contained in the Renewable Fuel Standard
The dotted line represents monthly numbers of service stations in Minnesota offering E85 – fuel containing up to 83 percent ethanol. The other line reflects monthly sales of E85 in Minnesota, which ranks number five in the nation in ethanol production.
Posted April 11, 2013
Two members of the University of Illinois’ agricultural and consumer economics department have an article out this month that raises some important concerns about the Renewable Fuel Standard (RFS). As agricultural economics experts at the flagship university of a farm-heavy state, which also is the third-largest ethanol-producing state in the country, their work merits a special mention.
First, Scott Irwin, chairman of the Agriculture Marketing Department, and Professor Darrel Good make some general observations about the RFS (sometimes also referred to as RFS2, for its 2007 revision), uncertainty surrounding potential higher compliance costs and where prices for Renewable Identification Numbers (RINs) may be headed under the RFS’ current framework:
Posted April 3, 2013
The Renewable Fuels Association (RFA) is no friend of its biggest customer, the U.S. oil and natural gas industry. That’s clear from the ethanol lobby’s attacks on our industry for raising questions about E15 gasoline (up to 15 percent ethanol) and the ethanol “blend wall,” addressed here, here and here. So, we were pleasantly surprised with last week’s RFA whitepaper showing that, yes – the high price of federal ethanol credits is increasing the cost of gasoline.Quick review. Another study released last week, from NERA Economic Consulting, found that the fuel market is nearing the point where refiners no longer can satisfy ethanol blending mandates under the Renewable Fuel Standard (RFS) without elevating the ethanol content in gasoline to higher than 10 percent.
Posted March 29, 2013
Posted March 26, 2013
Posted March 22, 2013
Paying for Ethanol's Infrastructure. Ethanol supporters have a blog post up suggesting that if the oil and natural gas industry simply invested in the “modern fuel distribution infrastructure needed to dispense greater than E10 blends,” industry’s issues with unworkable ethanol mandatesunder the Renewable Fuel Standard would vanish.
Maybe in some alternate universe – one that’s disconnected from economic reality, real costs and operating margins. Don’t take our word for it. Take a look at this letter to the Wall Street Journal from Dan Gilligan, president of the Petroleum Marketers Association of America, the folks who own the gasoline stations, convenience stores, heating oil businesses, truck stops and other companies that invest in and market petroleum products.
Posted March 22, 2013
The Renewable Fuels Association (RFA) has been circulating a video titled “40 Facts about Ethanol.” The first items demonstrate the growth in ethanol production over the past few decades:
Posted March 20, 2013
A new study by NERA Economic Consulting details severe impacts that could result by 2015 from continued implementation of the Renewable Fuel Standard (RFS) and its market-distorting biofuels mandates:
- An almost $800 billion decrease in the U.S. economy, as measured by GDP.
- $500 billion decrease in take-home pay for American workers.
- 300 percent increase in the cost of making diesel.
- 30 percent increase in the cost of making gasoline, which could result in rationing and other disruptions in the transportation sector.
- Greater impetus for the export of refined petroleum products.
Posted March 18, 2013
This is in many ways progress in that it is a de facto admissionthat RIN prices are rising because we are hitting the “blend wall” on ethanol, and that a solution is needed. Unfortunately the solution in this case is crazy.
Posted March 15, 2013
In a March 7 blog post, Renewable Fuels Association (RFA) President, Bob Dinneen claimed that the recent increase in RIN prices is not related to the E10 blendwall, and that the blendwall itself is a myth perpetrated by oil companies as an “excuse for their refusal to move to higher-level ethanol blends.” He then makes a number of claims that were presumably intended to bolster his misplaced conclusion. Conveniently, the post does not propose an alternative theory for RIN prices that have gone from 3 cents apiece to over $1, before retreating to about 70 cents today, in less than one years’ time.The post also ignores that the petroleum industry is only one in a sea of voices raising concern over the negative impacts that E15 and unrealistically high ethanol blending requirements would likely have on on-road and off-road engines and fuel systems, gasoline retail infrastructure and dispensing equipment, the environment, the price of food, food security for the needy, and a laundry list of other health and safety issues.