Trump faces dilemma as U.S. oil reels from record biofuels targets

[thackney]

Trump faces dilemma as U.S. oil reels from record biofuels targets
http://www.reuters.com/article/us-usa-trump-biofuels-idUSKBN13N0CR
Nov 28, 2016

The Obama administration signed its final plan for renewable fuel use in the United States last week, leaving an oil industry reeling from the most aggressive biofuel targets yet as President-elect Donald Trump takes over.

The Renewable Fuel Standard (RFS) program, signed into law by President George W. Bush, is one of the country's most controversial energy policies. It requires energy firms to blend ethanol and biodiesel into gasoline and diesel.

The policy was designed to cut greenhouse gas emissions, reduce U.S. reliance on oil imports and boost rural economies that provide the crops for biofuels.

It has pitted two of Trump's support bases against each other: Big Oil and Big Corn. The farming sector has lobbied hard for the maximum biofuel volumes laid out in the law to be blended into gasoline motor fuels, while the oil industry argues that the program creates additional costs.

Balancing oil and farm interests is likely to prove a challenge for Trump, who has promised to curtail regulations on the oil industry but is already being reminded by biofuels advocates of the importance of the program to the American Midwest, where he received strong support from voters on Nov. 8.

Oil groups are renewing their calls to change or repeal the program following Wednesday's announcement, when the Environmental Protection Agency (EPA) set record mandates for renewable fuels - for the first time hitting levels targeted by Congress nearly a decade ago..

The EPA plan is "completely detached from market realities and confirms once again that Congress must take immediate action to remedy this broken program," said Chet Thompson, President of the American Fuel and Petrochemical Manufacturers, in a statement.

It is unclear what Trump's plans for the program will be and his transition team did not respond to Reuters' requests for comment....

[thackney]

From the campaign trail:

Trump calls for higher ethanol mandate
http://thehill.com/policy/energy-environment/266339-trump-calls-for-higher-ethanol-mandate
01/19/16

Donald Trump said Tuesday that federal regulators should increase the amount of ethanol blended into the nation’s gasoline supply.

Speaking at an event hosted by the Iowa Renewable Fuels Association, Trump, a real estate mogul and the front-runner for the Republican presidential nomination, said the Environmental Protection Agency (EPA) ought to follow the ethanol volumes Congress set in 2007.

“The EPA should ensure that biofuel ... blend levels match the statutory level set by Congress under the [renewable fuel standard],” Trump said.

The mandate is popular in Iowa, which hosts the nation's first caucuses.

In setting the ethanol blending mandate for 2016 last year, the EPA used a provision in the law that allows it to waive the specific volumes Congress set out, citing lower than expected gasoline demand, among other factors.

[Joe Wooten]

Biofuels - such a waste of money and food.

End the subsidies, both direct AND indirect, NOW!

[17 Oaks]

Biofuels - such a waste of money and food.

End the subsidies, both direct AND indirect, NOW!

And I MEAN NOWWWWW!!!!!

All this does is tax the American people...

[Taxcontrol]

Ethanol bad, Butanol good (Butanol can be made from non food bio products - grass, algae, etc and contains more energy than ethanol)

Butanol is also a feeder product to a number of chemical products.  Right now, Butanol is more valuable in this space than as an ethanol replacement.

Biodiesel products are usually a means of consuming waste oil from the cooking process but can also be made from algae.

[Oceander]

From the campaign trail:

Trump calls for higher ethanol mandate
http://thehill.com/policy/energy-environment/266339-trump-calls-for-higher-ethanol-mandate
01/19/16

Donald Trump said Tuesday that federal regulators should increase the amount of ethanol blended into the nation’s gasoline supply.

Speaking at an event hosted by the Iowa Renewable Fuels Association, Trump, a real estate mogul and the front-runner for the Republican presidential nomination, said the Environmental Protection Agency (EPA) ought to follow the ethanol volumes Congress set in 2007.

“The EPA should ensure that biofuel ... blend levels match the statutory level set by Congress under the [renewable fuel standard],” Trump said.

The mandate is popular in Iowa, which hosts the nation's first caucuses.

In setting the ethanol blending mandate for 2016 last year, the EPA used a provision in the law that allows it to waive the specific volumes Congress set out, citing lower than expected gasoline demand, among other factors.

Meh.  Just one more repudiated campaign promise.  By now it's easier to count the promises he has t repudiated than to count the ones he has. 

[thackney]

Ethanol bad, Butanol good

http://www.biofuelsdigest.com/bdigest/2016/08/25/wheres-butanol-or-other-substitutes-for-gasoline-besides-ethanol/

...Why so few technologies, why so little commercial progress on gasoline substitution, excepting ethanol?

The chemistry of value

The answer lies to some extent in what we might term “the chemistry of value”.  Theoretical yields for making isobutanol from sugars, for example, hover in the 41 percent range, while theoretical ethanol yields are in the 51 percent range.  Yields for making isoalkanes and aromatics from sugar— typical components of gasoline — are in the low 40s, too.

Right now, the September ethanol contract at CBOT is pricing at $1.46 while the RBOB gasoline price is pricing at $1.49.

So, there’s a 2 percent gain in the price to compensate for a 20 percent drop in the yield.

Now, you probably at this stage would mention the higher RIN values associated with advanced biofuels. Right now, D5 advanced biofuel RINs are selling for roughly the same price as D6 corn ethanol RINs. Absolutely, you get 1.3 RINs for a gallon if isobutanol vs 1.0 RINs for a gallon of ethanol, because of the higher energy density of butanol, but it washes out when you take into account the lower yield in gallons.

So, right now, the market is not rewarding isobutanol makers with a premium price in the road transport market. Sadly, not in the jet fuel market, either....

[Joe Wooten]

Ethanol bad, Butanol good (Butanol can be made from non food bio products - grass, algae, etc and contains more energy than ethanol)

Butanol is also a feeder product to a number of chemical products.  Right now, Butanol is more valuable in this space than as an ethanol replacement.

Biodiesel products are usually a means of consuming waste oil from the cooking process but can also be made from algae.

If they do not require government subsidies to be competitive with petroleum derivatives, then by all means, let them flourish. I DO NOT want my tax dollars wasted on subsidizing these fuels.

[rodamala]

Iowa Biodiesel destroyed my injector pump on the "Greatest Car in the World" ^(TM), my 1991 VW Jetta Diesel... 53 screamin' ponies of naturally aspirated RAW diesel Powah!

That car got 40MPG right up to the end when I just had to take it off the road... at 315,000 miles on the OD.

If VW retooled to make that car exactly as they built it in 1990, crank down windows, fabric seats, manual transmission, plain steel wheels,  NO SUNROOF... I would pay them $50,000.00 for it, cash.

Must be black.

[17 Oaks]

If they do not require government subsidies to be competitive with petroleum derivatives, then by all means, let them flourish. I DO NOT want my tax dollars wasted on subsidizing these fuels.

At one time every gallon of gas with Ethanol was subsidized to the tune of $1 buck by the taxpayer.  Almost the entire "renewable fuel' business is propped up BIG TIME by the taxpayer.


FACT JACK:  In Hawaii solar took off like a rocket due to heavy subsides and the lots of sun and moderate temps.  Solar was so successful that revenues to the electric utility plunged and in fact dropped out the bottom.  The people were thrilled but it was short lived as the Feds stepped in and new game in town.  The utility cannot lose money and the rates skyrocketed for solar users in order to restore back the same level of revenue they had BEFORE solar.


The feds are cramming renewables down our throats and its all based upon LIES.  The loss of freedom will come to haunt Americans.  I drive down the street in my truck and I have at least 6 different gas stations to pick from but when your car and most everything else is electric there is usually only one game in town and its controlled by the FEDS.


BUT WAIT there a light in the tunnel.  Live in the country and be served by a Co-op.  Our Co-op buys excess electric from a lot of utilities in Texas the result is our rates are extremely low and since I live in the country and NOT in a neighborhood the feds overlook folks like me.  I often pull a 10,000 lb trailer with firewood  and I do other things that require a truck capable of work and I need a diesel not a electric motor...  I fell sorry for the folks in the cities.

[Smokin Joe]

Meh.  Just one more repudiated campaign promise.  By now it's easier to count the promises he has t repudiated than to count the ones he has.

That was the same promise where he said he'd use the EPA to the fullest extent of the law to enforce the mandate. It was where I stepped away from the platform next to the TrumpTrain, too. Not only should that mandate be repealed, but the EPA has done more damage to American industry than any other agency, including the IRS.

Considering the mandate isn't a percentage of fuel blended with a specific percentage of 'renewable fuels', but involves specific quantities to be blended with fuels regardless of the amount of that fuel sold, this could push ethanol levels in fuels past the "blend wall" of 10% ethanol, which will damage engines, void warranties, and wreck small engines (generators, outboard motors,  lawnmowers, etc.)

[Taxcontrol]

[....]

So, right now, the market is not rewarding isobutanol makers with a premium price in the road transport market. Sadly, not in the jet fuel market, either....

As always economic price is the kingpin of adoption

Yes that is the current situation.  However the current situation is driven by ethanol having many years of technology research that butanol does not.  I know that butanol tech is being researched and is being deployed by some in the marketplace.  Perhaps in a few years / decades the cost of petrol recovery will reach a point where bio fuels achieve economic parity.

[thackney]

As always economic price is the kingpin of adoption

Yes that is the current situation.  However the current situation is driven by ethanol having many years of technology research that butanol does not.  I know that butanol tech is being researched and is being deployed by some in the marketplace.  Perhaps in a few years / decades the cost of petrol recovery will reach a point where bio fuels achieve economic parity.

But with 20% lower yields with butanol, the economics are never going to be above ethanol.

[Taxcontrol]

But with 20% lower yields with butanol, the economics are never going to be above ethanol.

Again it is the economic model that will decide that.  For example, if a farmer grows corn, he can make ethanol from the corn or he can sell the corn as food - binary operation, one or the other option.  However, if the farmer grows corn and sells the corn AND CAN STILL sell the stalks to a butanol plant, it is a net gain to the farmer.  Even if the production of the butanol is less than ethanol.

[Cripplecreek]

From the campaign trail:

Trump calls for higher ethanol mandate
http://thehill.com/policy/energy-environment/266339-trump-calls-for-higher-ethanol-mandate
01/19/16

Donald Trump said Tuesday that federal regulators should increase the amount of ethanol blended into the nation’s gasoline supply.

Speaking at an event hosted by the Iowa Renewable Fuels Association, Trump, a real estate mogul and the front-runner for the Republican presidential nomination, said the Environmental Protection Agency (EPA) ought to follow the ethanol volumes Congress set in 2007.

“The EPA should ensure that biofuel ... blend levels match the statutory level set by Congress under the [renewable fuel standard],” Trump said.

The mandate is popular in Iowa, which hosts the nation's first caucuses.

In setting the ethanol blending mandate for 2016 last year, the EPA used a provision in the law that allows it to waive the specific volumes Congress set out, citing lower than expected gasoline demand, among other factors.

[Optiguy]

Biofuels - such a waste of money and food.

End the subsidies, both direct AND indirect, NOW!

I recall Cruz winning Iowa after promising to end the subsidies. If explained properly, perhaps Trump could end them without losing too much political capital.

[thackney]

AND CAN STILL sell the stalks to a butanol plant

Cellulose to butanol?  Now you are talking extremely expensive and low yield.  The above comparisons was based upon starting with something having a more substantial sugar content to begin with.

[Cripplecreek]

I recall Cruz winning Iowa after promising to end the subsidies. If explained properly, perhaps Trump could end them without losing too much political capital.

Cruz even had the CEO of an ethanol producing company back him on the anti subsidies/mandates stance. The guy simply stated that if they couldn't operate without subsidies and mandates then they had no business continuing to operate.

[Taxcontrol]

Cellulose to butanol?  Now you are talking extremely expensive and low yield.  The above comparisons was based upon starting with something having a more substantial sugar content to begin with.

You are aware that ABE is not the only fermentation?  Take a look at two stage butanol fermentation.

[thackney]

You are aware that ABE is not the only fermentation?  Take a look at two stage butanol fermentation.

Take a look at the cost and yield.