Fuels America coalition holds educational briefing on Capitol Hil

Source: By Holly Jessen | July 12, 2013, Ethanol Producer Magazine • Posted: Monday, July 15, 2013

A group of biofuels experts gathered July 11, in Washington, D.C., to discuss the so-called blend wall, E15 and progress on the cellulosic ethanol front. The event was hosted by Fuels America, in cooperation with Rep. Lee Terry, R-Neb., and Rep. Bruce Braley, D-Iowa, as part of a series of educational briefings on what’s really happening with the renewable fuel standard (RFS).

Tom Buis, CEO of Growth Energy, kicked off the event by talking about recent headlines about increased prices for oil and gasoline. Domestic oil is now more than $100 a barrel, with the average cost of a gallon of gas going up 7.5 cents in the U.S. in the last week. Compare that to the May 2009 price of U.S. oil, which was less than $40 a barrel. “Here we go again,” he said. The rhetoric from those that oppose biofuels is that, with the boom of domestic oil production, the RFS is no longer needed—a view he quickly countered by saying that the U.S. does need a competitive alternative to fossil fuels.

He then pointed to a recently released poll, conducted by Research Now, which found that four in five respondents want the nation to use more renewable fuel and three in four said they wanted choice, with more renewable fuel options as gas stations. In addition, the poll found that 59 percent of Americans place the blame for high gas prices with the oil industry and 73 percent support the RFS.

Bob Casper, president of Poet Ethanol Products, then addressed the various points in the production and distribution of fuel, making the point that the so-called blend wall was actually more accurately a “regulation wall,” as the oil industry is working to use regulations and other methods to create a barrier to ethanol in the marketplace. This despite the fact that there’s actually a $1.70 a gallon incentive to blend ethanol in the gasoline pool today. “If we had a free and open marketplace, which I am a proponent off, one would assume that we would see ethanol at 15 percent in every gasoline station in America tomorrow…but we don’t have a free and open marketplace,” he said.

Looking at the production side, for both ethanol and petroleum, there’s no blend wall, he said. In fact, the ethanol industry is operating today at about 86 percent of capacity so more could come online if needed. The transportation system isn’t creating a blend wall either. “We could move up to roughly E88 before need to add more transportation capacity,” he said. There also isn’t a blend wall in the infrastructure side as pump retrofit kits are readily available for only $800, which allows retailers to sell E15 with a small expense. Finally, vehicles aren’t the source of the so-called blend wall, as the U.S. EPA approved E15 for use in all light-duty vehicles 2001 and newer, which accounts for 75 percent of vehicles on the road today. “We really don’t have a problem anywhere along the value chain, of moving ethanol from production to the vehicle,” he said.

Brent Erickson, executive vice president of the industrial and environmental section of the Biotechnology Industry Organization, who pointed out how important the RFS is in speeding up the development of second-generation biorefineries. Although some critics claim the industry isn’t advancing to real production volumes, it’s already happening. He named off several examples, including the DuPont cellulosic ethanol facility now under construction in Iowa, which will be completed soon. Chemtex and Beta Renewables are currently operating a facility in Italy and have plants for one for North Carolina. Poet-DSM Advanced Biofuels and Abengoa Bioenergy are both building cellulosic ethanol facilities, which are expected to be in production by the end of the year or soon after. Then there’s the Ineos Bio New Planet Bioenergy facility in Florida, which is currently commissioning and expected to reach full production in a few months. Those are just examples of cellulosic ethanol production and other projects are ongoing to produce different biofuel molecules.

Also speaking were Andy Randolph, engine technical director of Richard Childress Racing, and Bruce Vollan, owner of Vollan Oil, a family-owned gas station in South Dakota that sells E15, E85 and other fuels. Randolph talked about NASCAR’s smooth transition to E15 and Vollan described brisk customer demand for higher ethanol blends. The business now sells nearly a million gallons of fuel a year, three times what it sold before installing blender pumps. “It really helped put us on the map, it helped us to become, profitable, sustainable,” he said.