Skip to comments.Ethanol fight fuels renewed heat between corn and oil industries
Posted on 03/20/2013 10:22:12 AM PDT by thackney
A fight between oil giants and corn farmers reached a fever pitch on Wednesday, as the oil industry used a new study to argue that increasing ethanol use in fuel will hurt consumers and the economy.
Groups representing ethanol producers fired back, saying the oil industry was trying to undermine government efforts to reduce reliance on oil-based fuels. Because most U.S. ethanol is made with corn, producers are allied with corn farmers, who enjoy an expanded market and higher prices for their crops because of ethanol demand.
The oil industry study, commissioned by the American Petroleum Institute and produced by NERA Economic Consulting, said government mandates that require energy companies to buy more ethanol have driven up refining costs and created a death spiral impact.
The Renewable Fuel Standard program is irretrievably broken, said Bob Greco, director of the APIs downstream group, speaking on a conference call with reporters.
He called on Congress to repeal the law.
Both the API and ethanol backers said they would support a congressional hearing on the mandate.
Groups representing ethanol producers and corn farmers argued that there is plenty of room for growth in alternative fuel consumption, but that refiners are refusing to broaden their offering of the fuel in gasoline blends.
The NERA report said the oil industrys efforts to meet government mandates could lead to a 30 percent jump in gasoline costs by 2015.
The higher gasoline costs effectively would reduce American workers take-home pay by almost $580 billion, according to an API statement on the report.
At the heart of the argument is a trading system meant to support ethanol production. Each company that purchases a gallon of biofuel receives a credit that can be traded. Companies that purchase more gallons than they need to meet their own mandates can then sell the credits to other refiners.
The U.S. Environmental Protection Agency sets the amount of credits companies need to obtain during a given year, as a percentage of their overall fuel production.
According to the NERA report, the EPA mandates for 2012 used projections that were 10.5 percent higher than they should have been, based on overall fuel consumption in that year.
The higher mandate forced companies to seek out more credits.
The problem is there is more ethanol on the market than we can blend into gasoline and the amount of gasoline that the American public wants has been declining and has continued declining, Greco said.
Trading on the market for the credits, also known as Renewable Identification Numbers, has led to soaring prices for the credits that refiners say have driven up their costs.
Ethanol producers say that fuel makers wouldnt need to buy as many credits if they bought and blended more ethanol into their gasoline.
Though the EPA has approved the wide use of E15, a blend of gasoline with 15 percent ethanol, oil companies have resisted, saying gasoline with 10 percent ethanol, which dominates the market today, is the highest blend that is safe for most engines.
Renewable fuel advocates say E15 is safe and note that some vehicle engines are designed to run on blends as high as 85 percent ethanol.
They can expand the use of ethanol by selling E85 or by selling E15 and expanding the amount of a less expensive product into the gasoline pool, or they can trade the RINs that theyve gotten for free amongst themselves, said Bob Dinneen, president of the Renewable Fuels Association.
People pushing ethanol should be placed into concentration camps and worked until death.
Contrary to what oil companies and middle east producers say, renewable fuel does have a place in the energy pie. Virtually every article about ETOH, lies by omission, about the fact that corn used in ETOH production also produces high protein feed for livestock, not just the alcohol. There is no more efficient way to capture solar energy than to use plants as the transducer.
I just paid for a new carburetor on my lawnmower.
The old one was eaten up by ethanol fuel.
The aluminum just started turning to powder, the mechanic called it “white rust”.It is the result of water in the ethanol causing an electrolysis like event.
The crap gets down in the Needle and seat and plugs it up. The machine runs until the bowl empoties , then stops and starts a while later after the bowl refills.
New carburetors aint cheap.
Just imagine what great cars, SUVs, PickUps, Etc. wed be driving if it were not for the senseless epa/gubmint and all the regulations automakers are strapped with, and the crap that ends up on our vehicles, and in our tanks !!!!!
Semper Madness !!!!!
The same should apply to all Democrats.
“People pushing ethanol should be placed into concentration camps and worked until death.”
You forgot to add daily waterboarding and electric torture.
Liberals are slime.
No food for fuel.
The oil industry should concentrate on producing food out of oil.
Group turns oil into food for shrooms
When there was 4% in the gas it took out my fuel pump on my old truck.
So to save oil they put in 10% corn crap (15% shortly) and my fuel mileage drops from 25 MPG to 22.3 MPG (have verified this many times) or about an 10.8% decrease in fuel mileage and higher food prices.
Only a brain dead politician could force this on the public.
Try Star Tron Enyzme fuel stabilizer. It seems to work the best. I have tried them all. I would suggest only buying gasoline one gallon at a time. Also, buy super unleaded instead of regular. Lastly, if you have a machine that does not get used every week(like a brush trimmer)empty the fuel out. Never leave fuel in the tank in the off season. You will definetly plug you jets. Ethanol will also dissolve the rubber fuel lines.
Stop all subsidies for oil, ethanol, solar, and wind.
Put two gas pumps, side by side at all stations, and see which one goes away in less than two years.
Competition will take care of the prices, and free men will chose what they want to put in their cars and trucks.
Stealing from another thread, we are a country designed by geniuses run by idiots.
I use the Sta-bil Marine in the blue bottle.
The Obama administration takes no action for the sake of the environment. The environment is just an excuse and a political organizational tool. Gotta’ keep those Green voters on his side, while satisfying the unions at the same time.
So, Obama off loads the responsibility for everything to someone else, the State Dept,, Congress, and now it looks like it is going to be some international trade organization for the Pacific, which will have the power to assess a carbon tax on all multi-national companies. Remember, Obama said if the Congress won’t act, he will, but the action won’t be to pass a carbon tax in the US, it will be to sign on to the new Pacific trade agreement which will assess the tax.
Obama has already turned the Keystone pipeline and the sub-bituminous coal terminals over to Congress (the Senate), where Patty Murray has already put the funding into the Democrat budget bill. I don’t know what additional funding the Keystone Pipeline requires, but she put in for Warren Buffet’s rail improvements and all the funding for the coal terminals in WA and Oregon.
The idea is that the Greens should be appeased by the Obama support for the carbon tax. He thinks that he can continue to play both sides of every energy issue and skim the profits right off the top and into the coffers of the Democrat special interests. Then on top of that, he is trying to divide the Republicans on the whole issue.
You want free trade? You have to accept the carbon tax. You want ethanol to keep farm prices high? You are going to take the Pacific trade agreement with the international carbon tax.
It was reported in Toronto that the Obama agreed to approve the Keystone Pipeline once Canada agrees to the carbon tax.
“Never leave fuel in the tank in the off season”
Most of which gets dumped on the ground in the name of saving the environment. It’s a grand scheme.