The People of America's Oil and Natural Gas Indusry

Energy Tomorrow Blog

e8534  ethanol  renewable-fuel-standard  gasoline-costs 

Bob Greco

Bob Greco
Posted May 14, 2013

Ethanol advocates often assert that ethanol costs less per gallon than gasoline while trying to justify the Renewable Fuel Standard (RFS).  While it’s true that on a gallon-to-gallon basis ethanol historically has been cheaper than gasoline, ethanol contains far less energy than gasoline and therefore has cost consumers more to travel the same distance, as I pointed out (here, here and here).  Look at the graphics below, produced by EPA and the Energy Department: The real costs to consumers, measured in fuel economy, has been significant.

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ethanol  gasoline  renewable-fuel-standard 

Bob Greco

Bob Greco
Posted April 19, 2013

It’ll take more than 60 seconds to debunk the main untruths in Fuels America’s video, “The Truth Behind High Gasoline Prices in 60 Seconds” – but then fact often is more complicated than fiction.

First, a few words about Fuels America. It’s a collection of groups committed to “protecting” the flawed Renewable Fuel Standard (RFS), with its broken mandates for increasing use of ethanol. The organization that includes the Renewable Fuels Association (RFA) and major corn growers is attacking America’s oil and natural gas industry – ironically, ethanol’s biggest customer.

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keystone-xl  emssions  fracking  new-york-drilling-moratorium  renewable-fuel-standard  ethanol 

Mary Leshper

Mary Schaper
Posted April 18, 2013

Forbes It’s Time To Repeal the Renewable Fuel Standard

A "consensus has concluded that EPA fuel standards are sorely at odds with the interests of fuel and food consumers in the United States,” writes contributor Robert Bradley. “The direct economic cost of implementing and enforcing these fuel standards far outweighs the questionable benefits."

The Washington Post Keystone XL Opposition Wanes Among Nebraska Landowners

With the Keystone XL debate set to head back to Nebraska today, the Post reports that folks in the state “largely support the pipeline project.”

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e8534  ethanol  renewable-fuel-standard 

Bob Greco

Bob Greco
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

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biofuels  ethanol  rfs34  renewable-fuel-standard 

Bob Greco

Bob Greco
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:

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ethanol  renewable-fuel-standard 

Bob Greco

Bob Greco
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.

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diesel  ethanol  gasoline  renewable-fuel-standard 

Mark Green

Mark Green
Posted March 26, 2013

The biofuels/ethanol debate has moved over to National Journal’s Energy Experts Blog, with this week’s posts addressing whether the Renewable Fuel Standard (RFS) that mandates biofuel use should be left alone, amended or repealed. Some of what others are saying:


Bernard Weinstein – associate director of SMU’s Maguire Energy Institute:

“The biofuels mandate has done little or nothing to enhance America’s energy independence or security. Oil imports have dropped dramatically over the past five years, from 60 percent of consumption to around 35 percent; but the credit goes to the shale revolution that has greatly boosted domestic production. What’s more, the potential contribution of ethanol to the energy mix has been oversold. Processing the entire U.S. corn crop into ethanol would yield energy equal to just 12 percent of gasoline consumption. … But the most pressing reason for repealing the ethanol mandate is that refiners must blend a larger quantity every year. … Consequently, refiners are up against a “blend wall” as the mandate forces them to purchase more ethanol than they can safely put into gasoline.”

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renewable-fuel-standard  ethanol  gasoline 

Bob Greco

Bob Greco
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. 

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ethanol  renewables  renewable-fuel-standard 

Bob Greco

Bob Greco
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:

  • 1982 – A handful of small ethanol plants produce 350 million gallons of ethanol
  • 1992 – 39 ethanol plants produce 985 million gallons
  • 2002 – 66 ethanol plants in operation, producing 2.14 billion gallons
  • 2012 – 211 ethanol plants produce 13.3 billion gallons

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ethanol  renewable-fuel-standard  refiners  e8534 

Bob Greco

Bob Greco
Posted March 18, 2013

The Renewable Fuels Association this morning tweeted:

RFA Tweet

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.

 From Platts:

Well-known energy economist Phil Verleger several years ago first brought up the likelihood that the refining industry might need to promote the sale of E85 as a way around the Gordian knot of a 10% ethanol blendwall combined with a rising mandate for the use of renewable fuels plus a decline in gasoline demand in the US…“The obvious solution to the RIN price problem involves no EPA intervention and no regulatory action at this point,” Verleger writes. “It simply calls for boosting E85 sales.”

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