‘Create value and demand’ for ethanol, booster says

Source: By Russell Hubbard / World-Herald staff writer • Posted: Friday, April 11, 2014

U.S. ethanol producers need to excite consumers with the prospect of lower motor-fuel prices and appeal to carmakers who are required to improve their output of fuel-efficient vehicles if they plan to hold on to the gains they have made in the past decade, one of the industry’s top experts said in Omaha.

“Ethanol production and use is at an all-time high,” said Douglas Durante, executive director of the Clean Fuels Development Coalition. “Yet we are under relentless attack all the time from animal feeders, the petroleum guys, the marine industry.”

Durante was the keynote speaker Thursday at the Nebraska Ethanol Board’s Emerging Issues Forum — running through noon today at the Magnolia Hotel — which has attracted people from throughout the industry, including producers, farmers and executives from ag cooperatives.

The key to ethanol prosperity, Durante said, is to not rely on the federal mandates for how much ethanol must be blended with the nation’s motor-fuel supply. That mandate, known as the Renewable Fuel Standard, is adjusted every year by the Environmental Protection Agency; last year the EPA proposed cutting the ethanol part of the standard by 9 percent, to 13.1 billion gallons. A final decision is expected in June.

Durante said automakers are a natural ally. Chrysler, Ford and General Motors in the past two years have said manufacturing more ethanol-fueled vehicles is key to helping them comply with tighter emissions regulations.

“Here is our value,” Durante said. “We need to create value and demand, not rely on some number the EPA comes up with.”

Even then, a major problem would remain, Durante acknowledged, referring to the “blend wall.” That is the point at which blends of gasoline and ethanol with more than 10 percent ethanol, such as E15 and E85, are required to fit all of the government-mandated ethanol into U.S. vehicles. With no more space in gas tanks, the EPA proposed cutting the ethanol mandate.

“The realities of the blend wall are serious,” Durante said.

The industry, he said, has to champion higher blends of ethanol. Eight years ago, Durante himself was advocating E15, which is not now readily available, he said, much less the E30 and E85 blends that will eventually be required to sustain the industry’s growth.

Steve Bleyl, marketing manager for Omaha-based ethanol producer Green Plains Renewable Energy, acknowledged during his presentation that ethanolized gasolines haven’t caught on everywhere.

Some people think ethanol is an indirect subsidy for corn farmers, he said, while others view it as damaging to engines and the reason food prices are higher, as corn in the main ingredient.

Such views are a major bone of contention. Ethanol critics — the petroleum industry, some animal husbandry industries, small-engine users and corn customers such as food processors and restaurants — frequently mention such drawbacks.

The ethanol industry has counter-arguments to all of them.

But in some cases the preference for clear gasoline is cultural. In Oklahoma — oil country — people will pay about 27 cents more per gallon for clear gasoline, Bleyl said. Convenience store fuel buyers, he said, get phone calls from customers asking for more clear gas, not more ethanol.

People in Nebraska and Iowa, Bleyl said, should be as loyal to their native fuel, ethanol, as people in oil-producing states are to theirs. That motorists in the largest ethanol-producing states don’t show the same preference for their homegrown fuel as those in oil states is mind-boggling, Bleyl said.

“Come on,” he said. “This is the home team.”