Renewable Fuels Deserve a Place at the Pump. The case for alternative energy done right.

[IsailedawayfromFR]

As seen on these pages in the past, it’s not uncommon for commentators to lump America’s thriving biofuel sector into the same category as taxpayer-funded green energy flops like Solyndra. Yet the facts show that the Renewable Fuel Standard (RFS) has been remarkably successful at enhancing America’s energy security by smoothly integrating a growing share of home-grown biofuels into the domestic energy mix, gradually reducing our need for oil imports. No other policy has so effectively undermined the international oil cartel that seeks to profit from our dependence on oil.

Today, ethanol and other biofuels meet about 10 percent of our transportation fuel needs. Without the RFS, which requires refiners to meet specific blending targets, there is simply no way that our dependence on foreign oil could have fallen by half since 2005. This has occurred not only without increasing the price of automobile fuel, but while decreasing it; a gallon of ethanol sells for about $1.70 per gallon, so ethanol blends hold down the price at the pump. Moreover, the market-based trading system that allows refiners to buy and sell biofuel credits — or RINS — has given the industry broad flexibility to meet the changing needs of the marketplace with minimal cost or inconvenience.

It’s true that the trading system opens up some opportunities for fraud, but the answer to that is not to eliminate the trading system, much less the RFS, but to prosecute the fraud. In any event, the RIN trading system is much less high risk for abuse than other private or public programs (the credit card system and Medicare come to mind) because the customers for the credits are sophisticated oil companies like Valero and ExxonMobil. If Exxon buys fake biofuel credits from a scam artist working out of his garage, that is regrettable, and the perpetrators should be and are prosecuted, but Exxon and Valero are surely in a better position to protect themselves than the typical consumer or beneficiaries of other programs.

As one of the original sponsors of the RFS, I always point out that there are no subsidies for corn ethanol, and that the tax breaks supporting conventional ethanol were phased out years ago. The RFS is no give-away program; it simply guarantees market access in a sector where one class of producers — dominated by foreign players — would otherwise have a monopoly over consumer options. It ensures that domestic biofuel producers have a spot at the pump, where consumers can select the most affordable option, which is typically an ethanol blend.

In an unrestricted marketplace, there would be no need for the RFS, but the market for transportation fuels hasn’t fallen into that category for 45 years. Ministers from Russia, Saudi Arabia, and members of the Organization of Petroleum Exporting Companies (OPEC) oil cartel meet regularly to strategize against competition and funnel more American dollars into the hands of hostile regimes. The threat is no less real today than it was when the Arab countries imposed their first embargo on the U.S. economy decades ago.

Their current strategy has been to flood the market, driving out new competition in the U.S. It’s working. Employment in the U.S. oil and gas sector fell by 142,000 between October 2014 and May 2016 — a 26 percent drop that severely limits our ability to bring production back online. But some OPEC members are already looking forward to phase two, when they pull back on global supplies and drive prices at the pump back to record levels. The American consumer is just a pawn in this game, but it is not a game that can be played against renewable fuels, because of the RFS. The price of ethanol and other renewables is set by competition, not by a cartel.

As a result, billions of dollars have been invested into the domestic biofuels industry. Home-grown options are more affordable than ever, they produce dramatically fewer emissions, and displace toxic gasoline additives linked to cancer and groundwater contamination. Moreover, the industry now supports more than 852,000 American jobs. And if the renewable fuels industry grows enough, it has the potential to break the market power of the international oil cartel.

To combat this success, some in the fossil fuel sector spread myths about the performance of biofuels in modern engines, but years of data show the truth. Just this month, research from Argonne National Laboratory, the National Renewable Energy Laboratory and Oak Ridge National Laboratory demonstrated that high-octane ethanol blends can deliver more power and greater mileage than conventional gasoline. NASCAR mechanics have known that for over a decade, which is why they rely on ethanol-blended fuels to keep their engines running.

In short, there’s a world of difference between alternative energy done right and alternative energy done wrong. The innovative approach offered by the RFS works. It’s a proven solution that strengthens our energy security, combats harmful emissions, and generates tremendous economic advantages for U.S. workers and consumers. It remains the best path to a free market — the most effective tool to take the levers of power out of the hands of a hostile international cartel and put it into the hands of domestic producers who, through innovation and competition, are lowering the price of fuel and enhancing the energy security of the United States. As seen on these pages in the past, it’s not uncommon for commentators to lump America’s thriving biofuel sector into the same category as taxpayer-funded green energy flops like Solyndra. Yet the facts show that the Renewable Fuel Standard (RFS) has been remarkably successful at enhancing America’s energy security by smoothly integrating a growing share of home-grown biofuels into the domestic energy mix, gradually reducing our need for oil imports. No other policy has so effectively undermined the international oil cartel that seeks to profit from our dependence on oil.

Today, ethanol and other biofuels meet about 10 percent of our transportation fuel needs. Without the RFS, which requires refiners to meet specific blending targets, there is simply no way that our dependence on foreign oil could have fallen by half since 2005. This has occurred not only without increasing the price of automobile fuel, but while decreasing it; a gallon of ethanol sells for about $1.70 per gallon, so ethanol blends hold down the price at the pump. Moreover, the market-based trading system that allows refiners to buy and sell biofuel credits — or RINS — has given the industry broad flexibility to meet the changing needs of the marketplace with minimal cost or inconvenience.

It’s true that the trading system opens up some opportunities for fraud, but the answer to that is not to eliminate the trading system, much less the RFS, but to prosecute the fraud. In any event, the RIN trading system is much less high risk for abuse than other private or public programs (the credit card system and Medicare come to mind) because the customers for the credits are sophisticated oil companies like Valero and ExxonMobil. If Exxon buys fake biofuel credits from a scam artist working out of his garage, that is regrettable, and the perpetrators should be and are prosecuted, but Exxon and Valero are surely in a better position to protect themselves than the typical consumer or beneficiaries of other programs.

As one of the original sponsors of the RFS, I always point out that there are no subsidies for corn ethanol, and that the tax breaks supporting conventional ethanol were phased out years ago. The RFS is no give-away program; it simply guarantees market access in a sector where one class of producers — dominated by foreign players — would otherwise have a monopoly over consumer options. It ensures that domestic biofuel producers have a spot at the pump, where consumers can select the most affordable option, which is typically an ethanol blend.

In an unrestricted marketplace, there would be no need for the RFS, but the market for transportation fuels hasn’t fallen into that category for 45 years. Ministers from Russia, Saudi Arabia, and members of the Organization of Petroleum Exporting Companies (OPEC) oil cartel meet regularly to strategize against competition and funnel more American dollars into the hands of hostile regimes. The threat is no less real today than it was when the Arab countries imposed their first embargo on the U.S. economy decades ago.

Their current strategy has been to flood the market, driving out new competition in the U.S. It’s working. Employment in the U.S. oil and gas sector fell by 142,000 between October 2014 and May 2016 — a 26 percent drop that severely limits our ability to bring production back online. But some OPEC members are already looking forward to phase two, when they pull back on global supplies and drive prices at the pump back to record levels. The American consumer is just a pawn in this game, but it is not a game that can be played against renewable fuels, because of the RFS. The price of ethanol and other renewables is set by competition, not by a cartel.

As a result, billions of dollars have been invested into the domestic biofuels industry. Home-grown options are more affordable than ever, they produce dramatically fewer emissions, and displace toxic gasoline additives linked to cancer and groundwater contamination. Moreover, the industry now supports more than 852,000 American jobs. And if the renewable fuels industry grows enough, it has the potential to break the market power of the international oil cartel.

To combat this success, some in the fossil fuel sector spread myths about the performance of biofuels in modern engines, but years of data show the truth. Just this month, research from Argonne National Laboratory, the National Renewable Energy Laboratory and Oak Ridge National Laboratory demonstrated that high-octane ethanol blends can deliver more power and greater mileage than conventional gasoline. NASCAR mechanics have known that for over a decade, which is why they rely on ethanol-blended fuels to keep their engines running.

In short, there’s a world of difference between alternative energy done right and alternative energy done wrong. The innovative approach offered by the RFS works. It’s a proven solution that strengthens our energy security, combats harmful emissions, and generates tremendous economic advantages for U.S. workers and consumers. It remains the best path to a free market — the most effective tool to take the levers of power out of the hands of a hostile international cartel and put it into the hands of domestic producers who, through innovation and competition, are lowering the price of fuel and enhancing the energy security of the United States. http://spectator.org/renewable-fuels-deserve-a-place-at-the-pump/ 

It is sad to see a supposed 'conservative' leader lend himself to fanciful stories like this.  He must be getting paid pretty well.

I especially see the attempt to say that ethanol-fueled engines are so good that even NASCAR uses them.  That is stretching it a lot, as those blends they use are far different than what a gas pump has.

And his verbiage to say that using ethanol is the best path to a free market is laughable, as the mandate forces consumers to use ethanol.

No wonder why this guy lost to a liberal Democrat.

[Cripplecreek]

As a result, billions of dollars have been invested into the domestic biofuels industry. Home-grown options are more affordable than ever

Yeah, making taxpayers pick up part of the tab always helps. 

[Frank Cannon]

Ethanol is a scam for farmers and an inefficient, damaging product for an engine. It's a loser.

[Sanguine]

@IsailedawayfromFR is there a link?

[IsailedawayfromFR]

@IsailedawayfromFR is there a link?

Sorry, I thought I had included it.  I modified the original post.

[IsailedawayfromFR]

Ethanol is a scam for farmers and an inefficient, damaging product for an engine. It's a loser.

Depends upon which side you are on, doesn't it?

If one is on the side of Midwest Farmers to prop up the price of their product, then it is not a loser.  Or certainly not for ArcherDaniels Midland, the premier shark in the waters for continued subsidies of ethanol to enrich that company's profit.

Or is one is a liberal (or a conservative-turned-liberal like Jim Tallent) and is able to fool constituents that this is an environmental-friendly energy, it is not a loser as it attracts contributions and hence votes.

I believe you meant for the well-being of taxpayers and most Americans, it is a loser.

[Sanguine]

Thanks!

[thackney]

...a gallon of ethanol sells for about $1.70 per gallon, so ethanol blends hold down the price at the pump

The "wholesale" price of gasoline is under $1.40, making this a lie.  Combined with the few miles per gallon for ethanol and the lie gets larger.  Compare apples to apples pricing.  That ethanol price didn't include the taxes and profit at the retail level.

http://www.eia.gov/dnav/pet/pet_pri_spt_s1_w.htm

[SZonian]

"This has occurred not only without increasing the price of automobile fuel, but while decreasing it..."

Ahhh, horsecrap.  Ethanol blended fuels are significantly LESS efficient...I lost over 4 mpg (average of 21+ mpg pre ethanol down to 17 mpg post ethanol) when CA fully implemented the 10% blends.

So consumers end up having to return to the gas station more often to refuel and get the added bonus of paying more taxes for LESS efficient fuel.

How is that a "decrease" in the price of fuel when one has to purchase more fuel to go the same distance as one did pre-ethanol? 

Damned figuring liars...

Not gonna go into having to tear my carb down in a 1 year old lawnmower this weekend because of this GARBAGE in gasoline.   

[IsailedawayfromFR]

Not gonna go into having to tear my carb down in a 1 year old lawnmower this weekend because of this GARBAGE in gasoline.   

Have you any access to ethanol-free gasoline?  I use it exclusively in my small engines such as my chainsaws, trimmers, blowers, mowers, etc.

You can locate one here.  http://www.pure-gas.org/

I get mine from a feed store, 92 octane that costs about 75 cents/gal more than regular but since I burn so little, it is well worth it.

[geronl]

Depends upon which side you are on, doesn't it?

No an anti-free market welfare subsidy and mandate is that, from any side.

[Bigun]

Ethanol is a scam for farmers and an inefficient, damaging product for an engine. It's a loser.

Totally!

If ALL inputs are considered it requires 1.2+ units of energy to produce 1 unit of energy from Ethanol.   Kind of like pouring money down a rat hole!

[IsailedawayfromFR]

No an anti-free market welfare subsidy and mandate is that, from any side.

if one feeds from that trough, then why is that thought a losing proposition?

It certainly is for those supplying the feed to the trough.

[SZonian]

Have you any access to ethanol-free gasoline?  I use it exclusively in my small engines such as my chainsaws, trimmers, blowers, mowers, etc.

You can locate one here.  http://www.pure-gas.org/

I get mine from a feed store, 92 octane that costs about 75 cents/gal more than regular but since I burn so little, it is well worth it.

@IsailedawayfromFR

Thanks, but no joy...there's about a dozen stations in CA and the closest to me is over 100 miles away...

Just gonna have to be extremely diligent in how I deal with the garbage fuel here...

[Smokin Joe]

It is sad to see a supposed 'conservative' leader lend himself to fanciful stories like this.  He must be getting paid pretty well.

I especially see the attempt to say that ethanol-fueled engines are so good that even NASCAR uses them.  That is stretching it a lot, as those blends they use are far different than what a gas pump has.

And his verbiage to say that using ethanol is the best path to a free market is laughable, as the mandate forces consumers to use ethanol.

No wonder why this guy lost to a liberal Democrat.

Not only are NASCAR engines different, they are torn down and inspected with amazing frequency. The average car owner wants something that is bulletproof reliable for fifty to a hundred thousand miles, and not an engine which has to be dismantled, inspected, massaged, and reassembled every few thousand miles at most.

Also of concern to motorists is what is known as the “blend wall.” The gas tanks in most vehicles can only contain gasoline blended with 10 percent ethanol (E10). Another gas blend, known as E85, allows a mixture of 85 percent ethanol, but only flex-fuel vehicles can run on this fuel and the demand for these vehicles is very low. Further, drivers who own flex-fuel vehicles often fill their tanks with E10 as opposed to E85 because the energy content in E85 is lower. The combination of the increasing mandate and declining fuel consumption, from a slow economy and existing increased fuel efficiency standards, means that refiners may have to blend more ethanol than consumers want, or can even safely use in their vehicles.

(from http://www.heritage.org/research/reports/2013/06/the-ethanol-mandate-dont-mend-it-end-it)
Saying ethanol made a significant contribution to the reduction in oil imports is funny, too. The producers in the US alone added nearly 4 million barrels of oil per day of production from 2011 to 2015, http://www.eia.gov/todayinenergy/detail.cfm?id=16591, enough to drop the price of crude oil from 2011 levels to the current prices. Oil companies, drilling companies, and completion technology advances made this happen. While biofuels may have played a lesser role, the oil industry did the heavy lifting.

Claims that vehicles run better on high octane ethanol blends omit that most E10 fuel is 87 octane, the lowest on the pump in much of America. It is the E0 fuels, when available, that tend to be the high octane premium fuels. The racing fuel NASCAR uses costs multiples of what pump gas costs, and every one of those cars has a team of mechanics on staff.

[Smokin Joe]

Have you any access to ethanol-free gasoline?  I use it exclusively in my small engines such as my chainsaws, trimmers, blowers, mowers, etc.

You can locate one here.  http://www.pure-gas.org/

I get mine from a feed store, 92 octane that costs about 75 cents/gal more than regular but since I burn so little, it is well worth it.

I have six vehicles on the pavement, in wonderful condition (no rust, no road salt used here), but the fleet is from 1987 to 2000 in vintage (I'm not counting the ones from 1941 to 1982, because they aren't daily drivers). Between them and the chainsaws, lawn mower, snow thrower, etc., I use nothing but E0 and will as long as I can get it.

I heard about a 'trick', using water to separate the ethanol from gasoline, (then you have to separate the water). I don't know how well that would work for small  engines, much less larger vehicles, but I may experiment with it.

[IsailedawayfromFR]

@IsailedawayfromFR

Thanks, but no joy...there's about a dozen stations in CA and the closest to me is over 100 miles away...

Just gonna have to be extremely diligent in how I deal with the garbage fuel here...

That was also what I found while I lived in CA a dozen years ago.

Amazing that so few stations in such a populous state as there are over 11,000 in North America.  That keeps the citizens behavior in line.

[thackney]

That was also what I found while I lived in CA a dozen years ago.

Amazing that so few stations in such a populous state as there are over 11,000 in North America.  That keeps the citizens behavior in line.

Not so amazing when you understand all of California requires reformulated gasoline.

http://www.nacsonline.com/YourBusiness/FuelsCenter/Documents/2016/US-Gasoline-Requirements-Map.pdf

You will probably find that the CA stations are like the ones listed in the Houston area, also with the reformulated gasoline requirement.  They are not traditional gasoline retail station but are actually selling racing fuel by the barrel at very expensive prices.

[Smokin Joe]

Not so amazing when you understand all of California requires reformulated gasoline.

http://www.nacsonline.com/YourBusiness/FuelsCenter/Documents/2016/US-Gasoline-Requirements-Map.pdf

You will probably find that the CA stations are like the ones listed in the Houston area, also with the reformulated gasoline requirement.  They are not traditional gasoline retail station but are actually selling racing fuel by the barrel at very expensive prices.

Thanks, @thackney , that map explains why my father can't get decent fuel for his outboard motors.

[MajorClay]

 Yet the facts show that the Renewable Fuel Standard (RFS) has been remarkably successful at enhancing America’s energy security by smoothly integrating a growing share of home-grown biofuels into the domestic energy mix, gradually reducing our need for oil imports


I stopped reading right there.

[Taxcontrol]

Ethanol Bad, Butanol good, bio-diesel better

Butanol can be made from algae and from food production waste like corn stalks.
It's energy content makes it almost a one for one replacement for gasoline
It is water phobic unlike ethanol

Unfortunately, the current price is between $5 and $6 per gallon for butanol
Two very minor changes can radically alter that picture.

1) Dept of Ag could develop a farm oriented "produce your own fuel" program.  This would provide education on the systems necessary to produce either butanol for gasoline engines or bio-algae-diesel for diesel equipment

2) phase in the requirement to produce X gallons of either in order to qualify for CRP (Crop Reduction Program).  Currently the government pays farmers to not farm their land for a period of time.  If this is going to be maintained, the people should also receive a benefit as in the creation of an industry that will at first, remove demand from the market.  Secondly, if developed, could obtain a price point that would be competitive with petrol based fuels.

The net cost of these two changes are a very minor cost to the tax payer, while removing a substantial amount of fuel demand from our food chain.  This will work to lower the cost of fuel in general.  It will also work to create a new industry / revenue stream for farmers, and work to stabilize the ag industry.

[Weird Tolkienish Figure]

Renewable fuels absolutely deserve a place at the pump. Which is exactly why should get government out of the way and let them get there on their own:

Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it

.

- Ronald Reagan

[thackney]

Unfortunately, the current price is between $5 and $6 per gallon for butanol
Two very minor changes can radically alter that picture.

1) Dept of Ag could develop a farm oriented "produce your own fuel" program.  This would provide education on the systems necessary to produce either butanol for gasoline engines or bio-algae-diesel for diesel equipment

2) phase in the requirement to produce X gallons of either in order to qualify for CRP (Crop Reduction Program).  Currently the government pays farmers to not farm their land for a period of time.  If this is going to be maintained, the people should also receive a benefit as in the creation of an industry that will at first, remove demand from the market.  Secondly, if developed, could obtain a price point that would be competitive with petrol based fuels.

Additional government mandates and subsidies are NOT a way to lower the price for the product.

Small scale production with seasonal needs is not a way to be cheaper.

[IsailedawayfromFR]

Yet the facts show that the Renewable Fuel Standard (RFS) has been remarkably successful at enhancing America’s energy security by smoothly integrating a growing share of home-grown biofuels into the domestic energy mix, gradually reducing our need for oil imports


I stopped reading right there.

Just remember that is a Republican former Senator who wrote the article.   He and others in the GOP are responsible for the travesty we have in pouring billions down the toilet called renewables.
And Trump wishes them to thrive at taxpayer expense.

Only Cruz wished them to go away, and he won the primary of the chief state that produces ethanol.  Means even those citizens see more important things that matter rather than subsidizing ADM.

[Bigun]

Yet the facts show that the Renewable Fuel Standard (RFS) has been remarkably successful at enhancing America’s energy security by smoothly integrating a growing share of home-grown biofuels into the domestic energy mix, gradually reducing our need for oil imports


I stopped reading right there.

I never got past the title!