Op-Ed: Fuel Economy Rules: Someone is Listening

Source: By Doug Durante, Biofuels Digest • Posted: Tuesday, March 28, 2017

The recent announcement that the Trump Administration was taking another look at Corporate Average Fuel Economy (CAFE) standards was a welcome reality check for what is a complex and multi-layered issue. There was an immediate knee jerk reaction that this will send us back to the days of muscle cars and wanton pollution when in truth it may be one of the most positive environmental actions anyone in the ethanol space could have hoped for.

For many of us working in the legislative and regulatory arenas, one of the least exciting and usually least rewarding things we do is submit comments on rulemakings. Late last year as a rulemaking loomed at EPA to finalize CAFE standards, many of us urged EPA to do what they said they were going to do and give this issue a thorough and comprehensive review.

But even before that we had called on EPA to think outside the box and not paint themselves into a corner through their Technical Assessment Report (TAR). This report would be the basis for a final rule and was inexplicably limiting its analysis to vehicle technology and ignoring the role of fuels. Predictably our comments and those of many others were ignored. During this time we argued to anyone who would listen that vehicles and fuels must be looked at as an integrated system and questioned why EPA would not use all the tools at their disposal, including fuels, and more to the point, high octane fuels. The auto industry, the Department of Energy, and countless others have made it abundantly clear that significant gains in efficiency are there to be had with higher octane fuels in conventional engines.

It is important to give some of the back story to appreciate just how badly this process was handled. In 2012 regulators and the auto industry agreed to one of the most forward looking regulations of recent memory and established mileage and emission requirements all the way out to 2025. As a condition of that agreement there was to have been a Mid Term Evaluation (MTE) based on the TAR. The purpose of the mid term was, according to EPA’s own words, to determine if the standards were still “appropriate”. Mind you we are talking about dreamlike mileage figures of 54 mpg coupled with carbon reductions. An admirable goal to be sure but it required lots of stars to align to make it so, ranging from high oil prices to low electric vehicle prices to consumers flocking to hybrids and smaller cars.

The agency said the mid term would be a transparent and data driven process that would examine the underlying assumptions of such a forward looking rule. Had they actually done that it would be clear that none of those assumptions came to be and if anything, were sliding backwards. The evaluation was to have taken place during the entire year in 2017 with a final determination due in 2018. Instead, the review was conducted over the span of a few months and gave birth to a determination that the rule was indeed still appropriate and should go forward. What happened last week was the Administration finally listening to the comments and admitting oil prices have remained steady and actually decreased in real dollars; consumers are buying more trucks and SUVs than cars, and tax incentives at both the state and federal level that are so critical to the economics of EVs are disappearing. And consumer acceptance of new technologies, namely EVs, was a key component of the review.

Our coalition works with a number of likeminded groups including the Urban Air Initiative, the High Octane Low Carbon Alliance, the Energy Future Coalition, the state of Nebraska and others, all of which have supplied detailed data and information to help EPA make the right decisions. So it seems someone listened.

So where does this leave us with regard to last week’s action? And what does it mean for ethanol? I would argue environmentalists should applaud this action since it gives us a better chance to actually meet higher standards. At the moment, we can’t get there from here. Just because the auto industry has met standards to date does not mean they can sustain that pace. These are quantum leaps we are facing and we have to be realistic. If the internal combustion engine is going to remain the primary propulsion pathway then lets make it all it can be. Downsizing engines and turbo charging would allow us to use a lot less gasoline and combined with more efficient fuels like high octane ethanol we can make real progress while not abandoning EVs and other options.

For both the corn ethanol sector, which would like to expand beyond the constraints of the RFS, and the cellulosic technologies which would like to get in the game, the question is where do you put the fuel? (And by the way, if you can’t answer that question I am not going to finance you.) The answer is in conventional vehicles that can take of high octane and low carbon ethanol to reduce CO2 emissions and dramatically improve mileage.

I take comfort in the fact that we are not making this up. An interesting response to a magazine article I had written on this subject last August was from Dean Drake, a former General Motors powertrain engineer of 34 years. Mr. Drake agreed with my call for higher octane fuels and took it a step further. He not only made a compelling argument that slight design changes would allow vehicles to achieve significant gains in efficiency and reductions in ghg emissions, but the best source of octane was ethanol at a 30% volume. This validation from someone with this kind of auto industry pedigree is critical to all of us in the industry as we promote our product. Add to the performance benefits the fact that ethanol is the highest octane additive available at the least cost; and it replaces aromatic compounds, the most harmful and energy intensive part of the oil barrel, and we have a winner.

No one should panic over the announcement last week, No one is rolling back anything at this point and the only thing agreed to is to go back to work and do what everyone agreed to do in establishing these standards. And when they look at fuel they are going to have to look at high octane low carbon ethanol, and when they do we are gong to look real good.

Douglas Durante is the Executive Director of the Clean Fuels Development Coalition representing a wide range of ethanol, agriculture, and technology interests. More about the Coalition, here.