I think this is a bogus argument. The only reason the ethanol industry exists is because of congressional mandate. I can understand the fight about going beyond 10% ethanol/gasoline mix for a lot of reasons. The most important reason is the car manufacturers don't want to spend the money it takes to make cars that can tolerate more than 10% ethanol. Of course there is the problem that the huge base of existing cars can't use more than 10% ethanol without problems developing.
So far the economics of ethanol are that without congressional support the industry would wither and die on its economics.
The cellulosic ethanol industry should scare big oil. If, and that is a very big if, they can produce ethanol at a cost that is lower than gasoline manufacturers will produce more cars that can use it. Economics will encourage people to use it. The same is true of electric cars. If the battery limitations are removed and a reasonably priced car with a 300 mile range can be produced then big oil will be in big trouble.
There have been significant improvement in the costs of fuel cells recently. Once they come down in cost and increase in reliability the US will switch to a hydrogen based energy carrier for cars faster than anyone imagines.
The fuel efficiencies of an electric cars powered by a fuel cell are amazing. Even if the hydrogen is generated from reformed natural gas, the economics and fuel efficiency are huge. The present limiting factor is the cost and reliability of fuel cells.
| From: donpat | 8/17/2013 1:49:56 PM | | of 36071 | | | Big Oil pours fuel on the fire
MICHAEL VAUGHAN
Special to The Globe and Mail
Published Saturday, Aug. 17 2013, 8:00 AM EDT
Last updated Saturday, Aug. 17 2013, 8:00 AM EDT
There’s a battle raging in the U.S. Congress in which Big Oil is trying to drive a stake through the heart of a major competitor – the renewable fuels industry.
It is playing out south of the border, but it has a direct effect in Canada as we follow the U.S. policy lead because the vehicle manufacturing and energy supply sectors are integrated.
Big Oil, in this case the American Petroleum Institute (API), is demanding that Congress “repeal” the law that requires ethanol to be blended with gasoline. It’s a complicated formula but the end result is that gasoline in Canada and the United States contains 5 to 10 per cent ethanol. There’s talk about increasing it to 15 per cent and the oil industry has absolutely no intention of losing another 5 points of market share.It’s a battle worth fighting because the gasoline market is shrinking as Americans are driving less and doing so in more fuel-efficient vehicles. At the same time, more aggressive drilling and fracking is resulting in more domestic hydrocarbon supply than ever.
Ethanol has its critics largely because it is made from corn, giving rise to the “food for fuel” debate. Corn-based ethanol is certainly making farmers happy but it is also making a considerable contribution in reducing tailpipe emissions. There’s no shortage of corn and corn prices are way down from last year, making the ethanol price advantage even greater; ethanol is now about one U.S. dollar cheaper per gallon than gasoline.
But what the oil industry really fears is cellulosic ethanol. That’s ethanol made from waste. Who wouldn’t rather see municipal garbage, sewage sludge, agricultural and forest waste converted into fuel – either alcohol (ethanol) or bio-diesel. Plants are being built to do just that, and these will impact the need for rail cars of crude oil rolling through your town or additional pipelines.
But let’s get back to the battle in Congress. In hearings of the House Energy and Commerce Committee, the oil industry has declared it wants the Renewable Fuels Standard abolished. The Environmental Protection Agency created the RFS program in 2005 and established the country’s first renewable fuel volume mandate in order to open the door to less expensive and cleaner home-grown fuel.
The American Petroleum Institute has launched a print, radio and television advertising campaign designed to generate public support for repealing the federal Renewable Fuel Standard. “The new ads are the first in a series designed to educate American consumers on why we must end this unworkable mandate,” said Robert Greco, an API Director.
The oil industry was furious when, earlier this year, the Environmental Protection Agency approved the use of gasoline containing 15 per cent ethanol – E15 – for vehicles made in 2001 and later. It claimed that this blend can harm engine components although flex-fuel vehicles can safely use E85 and all cars in Brazil have been running on E20 for decades.
API says it has mobilized its grassroots network of more than 15 million concerned citizens.
“Thousands of Americans have been calling the White House and contacting Congress every week,” Greco said. “These ads will encourage more Americans to tell the White House to fix the problem before it’s too late, while urging Congress to completely repeal the RFS.”
It is shaping up to be a historic battle between the oil industry and the renewables. The Obama administration has been squarely on the side of the renewables in the last several years but this is now in the arena of down-and-dirty politics. Anything could happen.
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