The People of America's Oil and Natural Gas Indusry

Energy Tomorrow Blog

epa34  e1534  ethanol 

Bob Greco

Bob Greco
Posted May 20, 2013

Time to set the record straight on EPA’s premature approval of E15 fuel for the marketplace – necessitated by EPA administrator nominee Gina McCarthy’s recent inaccurate and misleading responses to Senate questions about E15 testing. McCarthy was asked:

“Was EPA aware of ongoing (Coordinating Research Council) testing on engine durability, fuel pumps and other engine components? Why not wait until that test was complete before making a decision? Because in the aftermath it looks like the decision was, at best, premature. The CRC data shows millions of approved vehicles are in danger of engine damage.”

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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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epa34  refineries  regulations 

Bob Greco

Bob Greco
Posted May 3, 2013

It’s one thing to have genuine differences over energy regulatory policy – as the oil and natural gas industry has with EPA’s proposed Tier 3 rule further lowering sulfur levels in gasoline. It’s quite another to see that the rulemaking process is being gamed.

Tier 3 Trouble

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ethanol  imports  oil34  renewables  rfs34 

Bob Greco

Bob Greco
Posted April 30, 2013

Imports of crude oil have decreased significantly over the past four years as the U.S. has become more self-reliant in meeting its energy needs domestically. In fact, as the graph below shows, from the beginning of 2008 through the end of 2012 net U.S. oil imports have declined by more than 1.3 million barrels per day (bpd) while domestic production has increased by almost 1.5 million bpd. In short, the increase in domestic production accounts for all of the reduction in imports and then some.

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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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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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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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