Opportunities in sight amid biofuel attacks

Source: By Tim Krohn, Mankato Free Press • Posted: Friday, January 10, 2014

MN Ag Expo panelists look at expansion chances

MANKATO — The title of the panel discussion at the MN Ag Expo made it clear those supporting ethanol feel besieged: “Tarred & Feathered: Biofuels, the RFS & Where It’s All Heading.”

The title reflects what the ethanol industry sees as unwarranted attacks by the petroleum industry and the federal Environmental Protection Agency’s recent proposal to lower the amount of biofuels required to be blended into gas and diesel fuel.

But the panelists focused much of their talk on what they see as opportunities to expand the use of both corn-based ethanol and soy-based biodiesel across the country.

Mike O’Brien, who works to get more gas stations to sell biofuels, said those retailers are more open to the idea than they had been.

“They have challenges from the oil companies when they want to add biofuels (pumps). But they’re starting to see the price advantage of E15,” said O’Brien of Growth Energy.

He said converting some pumps for biofuels can be relatively inexpensive depending on a station’s setup and said retailers can realize a bigger markup margin for biofuels.

Tom Verry of the National Biodiesel Board said biodiesel has broken into California market and other important markets after earlier facing resistance from environmental groups concerned about using food grains for fuel.

“We’re seeing biodiesel move from a regional fuel to a national fuel.”

Minnesota continues to lead in promoting ethanol and and biodiesel blends. The Legislature last year voted to boost the required biodiesel blend from 5 percent to 10 percent during the summer months. The state also has set high goals for ethanol use with a target of 30 percent ethanol blends in gasoline by 2025.

Hoon Ge, an engineer who works for a fuel consulting company, said the biofuels industry continues to chip away at fears that biofuels can harm vehicle engines, void warranties or cause diesel fuel to gum up in the winter.

“They ask about biodiesel in cold weather. I say, how about International Falls? They have no problems with it there,” Ge said.

Charlie Poster of the Minnesota Department of Agriculture said they heard from the state auto dealers association when biofuel standards were increased, worried about whether using biodiesel could void manufacturers’ warranties on vehicles.

“Using biodiesel can’t nullify a vehicle’s warranty.” He said Congress long ago passed laws saying that a warranty can’t be nullified when vehicle owners use a third-party product — such as after-market parts or different fuel additives or mixtures.

Although positive about an expanding market for biofuels, the panel repeatedly said farmers and other supporters need to contact the EPA and their members of Congress urging them not lower ethanol-blend requirements as proposed by the EPA.

“Big oil has had their voice heard. Now you have to make sure you have your voice heard,” Poster said