It’s Time We Break Down the Blend Wall – For Good
By Biofuels Digest columnist Tom Buis
CEO, Growth Energy
There is no greater hurdle to the expansion of the American biofuels industry than the artificial barriers to the market. Through flawed policy and outdated regulation, these barriers serve as a mandate for the American people that 90 percent of our fuel must be gasoline. It should not be lost on anybody that two-thirds of that gasoline is derived from foreign oil.
Make no mistake: that regulation favoring gasoline and oil is the biggest energy mandate on the books, dwarfing both the Renewable Fuel Standard of the 2007 Energy Independence and Security Act and Growth Energy’s Green Jobs Waiver for E15.
And without a market, we will continue to see private capital sidelines instead of being invested into commercializing the great innovations of our industry.
But there is something we can do. We can tear the so-called ‘blend wall’ down for good – by completely reforming ethanol’s access to the motor fuels marketplace.
Last year, Growth Energy proposed the Fueling Freedom Plan. This proposal seeks to reform tax policy in order to encourage the installation of as many as 200,000 Flex Fuel pumps, and see every auto sold in the U.S. be a Flex Fuel vehicles. Only by this standard of market penetration will we be able to see alternative fuels like ethanol take a position in the marketplace so consumers can choose their fuels – instead of having their choice made for them.
Thankfully, we are seeing lawmakers in Congress who agree with reforming the motor fuels marketplace.
In March, Sens. Amy Klobuchar, D-Minn., and Tim Johnson, D-S.D., introduced legislation they called “Securing America’s Future with Energy and Sustainable Technologies,” or SAFEST. Their bill would not only establish a tax-credit for ethanol and biodiesel, but it would use tax incentives to encourage greater production of flex-fuel vehicles and the build-out of infrastructure to deliver ethanol.
Further, it would allow pipeline projects to deliver renewable fuels to qualify for federal loan guarantees, and it amends the Renewable Fuel Standard’s definition of “advanced biofuels” to include ethanol from corn starch – ending a regulation that arbitrarily discriminated against the only commercially-viable alternative we have today to foreign oil.
Sens. Klobuchar and Johnson deserve great credit for their legislation, and Growth Energy was swift to endorse it.
Other legislation includes a bill from Sen. Tom Harkin, D-Iowa, called the Biofuels Market Expansion Act, which was quickly co-sponsored by Sens. Al Franken, D-Minn., Klobuchar and Johnson. Growth Energy was given the opportunity to submit testimony on this legislation to the U.S. Senate Committee on Energy and Natural Resources. We told the Committee that for too long, “…foreign cartels have manipulated oil production to the detriment of both the economy and the security of our nation.
This Committee has before it the opportunity to begin to right the wrongs that have plagued our national energy policy despite the efforts of the last eight Administrations, dating back to President Nixon…. (D)omestically-produced ethanol can do much more today to replace foreign oil in our transportation fuels market. However, if we fail to lift the artificial barriers that block ethanol from entering the market, we will continue a policy that mandates that 90 percent of our motor fuel be gasoline, two-thirds of which is derived from foreign oil.”
Even as critics to biofuels rise up to challenge the industry, there are champions in Congress who are working toward breaking down the artificial barriers that prevent our industry from its natural growth in the market. We support these efforts, and we encourage anyone who supports our industry to reach out and tell their lawmakers in Washington, DC, to support these efforts as well.
More about Growth Energy, here.
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Is this article a joke? Ethanol is suffering from “artificial barriers to the market”? Hello, doesn’t this guy realize that the whole ethanol market was created by government regulations, subsidies and mandates? Let him advocate totally free competition – no mandates, subsidies, tax credits, incentives, tariff barriers, etc… between ethanol and gasoline, and lets see what consumers chose to buy.
What utter, tendentious nonsense.
Ethanol is “limited” by its incompatibility with tanks, pipelines, and vehicles, not to mention fuel properties and evaporative & tailpipe emissions that can be much worse than gasoline, nor to mention the run-up in food prices caused (in part) by such massive conversion of food to fuel.
Even the quantities that are made today owe their existence to long-term subsidy support. And yes, petroleum is subsidized, too, but on the domestic front at least, those subsidies are tiny compared to ethanol subsidies (note that the very large subsidy levels sometimes cited for petroleum include federal & state support of ROADS & BRIDGES — last time I checked, ethanol-powered vehicles need roads & bridges just as much as their petroleum-powered counterparts).
I am a staunch supporter of increased volumes of renewable fuels, of an economically level playing field with petroleum, of recognizing the real, serious negative aspects of our use of petroleum, and of robust government support for rational technology development and deployment to achieve those ends.
But rhetoric and lobbying to stuff every possible gram of corn ethanol into every vehicle in every State, regardless of the cost, with nothing to recommend it but the blatant self-interest of corn farmers and the existing ethanol industry, that just gives more ammunition to the detractors of renewable fuels, including Big Oil.
We need advanced biofuels, non-food feedstocks, and REAL benefits that extend beyond the Corn Belt if we are to build a solid base of support in these economically and politically challenging times.
God bless Tom Buis! As a serious advocate of ethanol all I can add to Tom’s statements is that it is way past time that the U.S. oil cartel’s monopoly on transportation fuels be broken up. It is contrary to U.S. Law for any corporation or company or group of corporations or companies to monopolize the availability of products, especially products that are needed by citizens to ensure their safety and well being. Obviously, transportation fuels are needed for security, safety and survival (police, fire and ambulance service, for example). The list goes on; parents driving their children to various activities, delivery of items to local and long distance out-lying areas, farmers’ trucks and tractors, delivery of food to our markets, the list is unending. Transportation fuels are just as necessary in our geographically enormous and spacious country as electricity. One could easily justify the absolute NEED for adequate competition that thus far has been unjustly refused. This refusal to permit adequate competition absolutely violates AMERICAN PUBLIC POLICY. Our constitution, Declaration of Independence and Bill of Rights collectively require government of the people by the people and FOR THE PEOPLE. Somebody wake up our Congress of Representatives and Senators and let them know that they CAN NO LONGER GIVE FAVOR AND SPECIAL TREATMENT AND SERVICE TO BIG US OIL COMPANIES TO THE DETRIMENT OF WE THE PEOPLE! We desperately need to seriously start our transition from fossil fuels to renewable fuels such as ethanol (especially cellulosic ethanol that uses no food sources) and biodiesel. One currently prime example of how the big U.S. oil cartel has prevented the availability of scalable and economical cellulosic ethanol by controlling way too many U.S. Representatives and Senators in our Congress, is the deliberate delay of a DOE Loan Guarantee needed by the BlueFire Renewables Corporation to commence construction of their Cellulosic Ethanol plant in Fulton, Mississippi. BlueFire has completed site preparation, has all necessary permits, and has satisfied every single requirement to the satisfaction of our Environmental Protection Agency. They have a viable contract for a more than adequate supply of cellulosic material, create their own electricity during production, and recycle all the water they use in production.
In addition to the foregoing, everybody better understand that our great nation is currently and absolutely experiencing exigencies involving our NATIONAL DEFENSE. This has been going on for an inordinate period of time. EVERYONE should be aware of our dangerous dependence on OPEC oil from the Mideast countries. Our Good Lord knows that Jimmy Carter warned us about this many years ago. Now, considering the current and dangerous unstable situation in the Mideast countries which at this stage can only be further exasperated the longer we delay our serious transition to alternative fuels, anyone that continues to cause that further delay in my considered opinion is guilty of high treason. Consider that no matter how many troops, tanks and airplanes we have, they are rendered useless without adequate transportation fuel. I SERIOUSLY FEAR THAT TOO MANY OF OUR REPRESENTATIVES AND SENATORS IN OUR CONGRESS WILL CONTINUE TO BE IN DENIAL BY CONTINUING TO DELAY OUR SERIOUSLY NEEDED NATIONAL TRANSITION TO RENEWABLE FUELS.