Domestic Fuel

Many fuel retailers have begun offering blends between 10 percent and 85 percent ethanol for flexible fuel vehicles. The National Ethanol Vehicle Coalition (NEVC) now has available E20, E30 and E40 labels for retailers to use for their blending pumps.

These labels are offered at a member rate and non-member rate. The coalition also offers the mandatory pump labeling for these blends. Besides blend pump labels, the NEVC offers a complete “pump imaging package” for E85 fueling stations. A listing of all items offered for pump labeling can be found by clicking here.

In remarks to farmers meeting in Arlington, Virginia on Monday, Secretary of Agriculture Tom Vilsack endorsed a request to the Environmental Protection Agency for an increase in the ethanol blend rate up to 15 percent.

“We can move fairly quickly to move that rate up from 10 percent to maybe 12 or 13 percent in the interim and then take an even further jump to 15 percent or even 20 percent over the course of the next couple of years,” Vilsack said to the National Farmers Union (NFU) convention. The ethanol industry formally petitioned the EPA to increase the blend level to 15 percent on Friday. Growth Energy, one of the groups requesting the increase, recently hired NFU president Tom Buis as CEO, effective next week.

Meanwhile, the agriculture directors of 10 Midwestern states sent a letter to President Obama Monday also endorsing the acceptance of 15 or 20 percent ethanol blends.

The letter reads, in part, “American ethanol production has nearly reached 10 percent saturation. We must move to a base blend of 15 or 20 percent in 2009 in order to continue growing this vital industry. By working together to promote domestic production and improve market access, we can continue to deliver a clean, renewable fuel that has a positive impact on our domestic economy.”

Letter signers include the heads of state agriculture departments in South Dakota, Iowa, Nebraska, Wisconsin, North Dakota, Kansas, Minnesota, Michigan, Montana and Ohio.

A broad alliance of ethanol industry groups have joined together to formally petition the U.S. Environmental Protection Agency (EPA) to allow the use of up to 15 percent ethanol in gasoline for motor vehicles, according to the American Coalition for Ethanol (ACE).

In addition to ACE, the alliance includes Growth Energy, the Renewable Fuels Association (RFA), and the National Ethanol Vehicle Coalition (NEVC), as well as several major ethanol companies.

“The American Coalition for Ethanol is pleased to be part of this unified effort to submit scientific data to EPA so they may approve the use of mid-level blends of ethanol, such as E15, in motor vehicles nationwide,” said Brian Jennings, Executive Vice President of ACE. To encourage greater support in Congress for the mid-level blend waiver, ACE and 30 of its grassroots members traveled to Capitol Hill on March 2-3 as part of its “Biofuels Beltway March.” A varied group of ethanol advocates – including ethanol producers, farmers, investors, lenders, engineering and technology firms, agriculture groups, and rural electric cooperatives – met with more than 70 Members of Congress and with Lisa Jackson, Administrator of the EPA, to discuss E15 and other issues.

Meanwhile, Growth Energy co-chairman General Wesley Clark will be delivering a speech about higher blends and the future of the ethanol industry as part of the National Press Club’s Newsmaker Series today at noon eastern time. They will also be holding a technical briefing after the press conference at 1:30 eastern.

According to Reuters, members of the Governors’ Biofuels Coalition said they want the U.S. Environmental Protection Agency to issue a waiver to allow the sale of 13 percent ethanol blends. U.S. governors who want to see more ethanol production said they are optimistic regulators will soon boost the allowed blend rate for ethanol in gasoline to 13 percent from 10 percent.

Iowa Gov. Chet Culver, vice chair of the Governors’ Biofuels Coalition said, “The EPA is going to take a very serious look at that 10 percent waiver, and we’re encouraged. We’re optimistic, and we think we have people in place, like (Agriculture Secretary Tom) Vilsack in particular, that can help us make the case on a daily basis out here.”

North Dakota Gov. John Hoeven, the coalition’s chair, told Reuters he hoped the EPA would act on the waiver request “within weeks or months.” He said the increase to 13 percent was just the first step. “We want to continue that effort to increase the percentage blend into fuels into the fuel supply,” Hoeven said.

Ethanol makers have been pushing to boost the blend rate as high as 20 percent to encourage the development of the industry. Any increases to ethanol blend rates would also need the support of the auto industry, which is concerned about the effects of higher blends on fuel lines and catalytic converters, Hoeven said.

A new study released today concludes that increasing the blend of ethanol in the U.S. gasoline supply from 10 to 15 percent could boost job creation and economic growth.

The study was commissioned by Growth Energy and conducted by researchers from North Dakota State University (NDSU). Nancy Hodur, NDSU researcher with the Department of Agribusiness and Applied Economics, says there would be substantial economic and employment impacts associated with the expansion of the ethanol industry if the blend rate were increased.

“We estimated that annual direct economic impacts would be $9.6 billion and the total direct and secondary impacts would be $24.4 billion and that level of economic activity would support 136,000 jobs,” said Hodur. Those impacts were based on the multiplier effect of adding another 60 ethanol plants nationwide.

Former Congressman and Growth Energy board member Jim Nussle says the study supports the economic need to increase the ethanol blend level, which he says was arbitrarily set 30 years ago at ten percent. “These figures really are dramatic and they prove that when we want we can create these desperately needed jobs,” said Nussle. “The federal government can act right now to increase the amount of ethanol blends in the nation’s fuel supply without having to dip into another stimulus package or create another bill.”

Nussle says the Environmental Protection Agency has the authority to increase the blend level through the rule-making process and while it could theoretically be done quickly the former congressman refused to speculate on how long it might take EPA to take such an action.

Listen to the Growth Energy press conference announcing the study here: 3-4-09-GE-presser.mp3

Podcast: Play in new window | Download (10.3MB)

Underwriters Laboratories (UL) released a press statement on February 19 noting that it will allow up to fifteen percent ethanol in gasoline dispensing units. The press release said that they support Authorities Having Jurisdiction (AHJs) who decide to permit legacy system dispensers, Listed to UL 87 and currently installed in the market, to be used with fuel blends containing a maximum ethanol content of 15%.

UL stresses that existing fuel dispensers certified under UL 87 were for intended use with ethanol blends up to E10, which is the current legal limit for non-flex fuel vehicles in the United States under the federal Clean Air Act. However, data the company has gathered as part of the organization’s ongoing research to investigate the impact of using higher ethanol blends in fuel dispensing systems supports that existing dispensers can be used with ethanol blends up to 15%. AHJs are advised to consult with the dispenser manufacturer to confirm that the dispenser is compatible with the fuel to be dispensed.

“UL continues to support technological advancements, while protecting safety. That is why we have invested resources and effort that go far beyond any business benefit UL might gain from this work to support the ethanol industry’s desire to have safety certification requirements established for E85 fuel dispensers,” said Drengenberg.

Increasing the approved level for ethanol that can be blended into gasoline is the number one priority for the ethanol industry this year, and recently support for that goal has been indicated by two major players in Congress and the administration.

Senator Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee, said in a recent New York Times interview that he thought government regulations that limit ethanol content to 10 percent should be reconsidered.

“I believe we could go to E-12, or E-14 or E-16 without causing any great problems with vehicle operation,” he said.

Bingaman said the EPA and the Energy Department are currently conducting tests on higher blends and results could be available within a year or so.

Meanwhile, Secretary of Agriculture Tom Vilsack recently said in an interview with Bloomberg that USDA and EPA are in discussions about raising the ethanol blend level, but they have no specific numbers yet. “I do think it’s important for us to look for strategies to make sure the infrastructure of the ethanol industry is preserved, because it is a key component to this new energy future the president’s laid out,” said Vilsack.

Increasing the blend level is seen as the only way to reach the Renewable Fuels Standard, which requires 11.1 billion gallons of renewable fuels, including ethanol, to be used this year. Vilsack says they should not have to change the RFS. “We’ve laid the markers down there and I think we have to work hard to meet it,” he said.

Kansas-based Crescent Oil Company has filed for bankruptcy after failing to make deliveries last week to many retailers the company serves in the Midwest. The sudden move comes just two weeks after Crescent took part in a grand opening for NewGen Fuels, a joint venture with ethanol plant owner/designers ICM and POET.

Officials with NewGen say their goal to offer “new generation” ethanol-blended fuels at hundreds of retail outlets remains the same, but the timing could be affected.

NewGen President Alan Goodnight was quoted in the Wichita Business Journal. “We’re still focused on the mission of NewGen,” Goodnight says. “We don’t see these unfortunate events in any way changing the mission or changing our objective. Crescent Oil was also a partner in NewGen LLC and still is.”

An oil distributor that is part of a recently-announced joint venture with POET and ICM to deliver new generation fuels caused some panic this week when it failed to deliver old generation fuel to gas stations across the Midwest.

Officials with Crescent Oil Company, a fuel supplier for seven Midwest states, had no comment Friday about claims that this week's fuel deliveries never arrived. Several retail operators in Kansas and Missouri say that regular deliveries from Crescent did not arrive as scheduled on Wednesday, prompting rumors of fuel shortages, driving up gas prices and ultimately forcing them to find other suppliers. Crescent Oil is a wholesale supplier for several major oil companies and distributes fuel to more than 340 locations in Kansas, Oklahoma, Arkansas, Missouri, Illinois and Louisiana.

Just last week, Crescent took part in the grand opening of a NewGen “Renewable Fuel” retail station in Topeka, Kansas, together with partners POET and ICM.

According to a press release on the opening, "NewGen Fuel™ will provide owners of flex fuel vehicles (FFVs) the freedom to choose domestically produced midrange ethanol blends, through Crescent Oil Company’s efficient fuel distributorship and POET’s robust supply of ethanol."

“We’re extremely excited to celebrate the grand opening of the first “Renewable Fuel” retail station in our state capital," said NewGen Fuel president Alan Goodnight. "And we’re equally grateful for the extraordinary collaboration to form a joint venture with industry leaders, Crescent Oil Company and POET."

Local news reports indicate that Crescent Oil is experiencing financial difficulties but had not filed bankruptcy.

Crescent Oil is advancing alternative fuel infrastructure through the recent purchase of Dresser Wayne Ovation® iX™ fuel dispensers and the Fusion™ Universal Site Controller. The fuel supplier plans to implement more than 600 new dispensers throughout its more than 150 retail locations across the Midwestern United States. As a result, the sites will be able to sell a wide range of ethanol fuel blends and streamline operations with improved payment security and remote management.

“The Fusion controller’s technology helps us make the most of our equipment,” Phil Near, President of Crescent Oil says. “It is an excellent tool for increasing efficiency and reducing costs.” Crescent Oil selected the Ovation iX fuel dispenser for its flexible hose configuration enables the company’s retail sites to dispense high blend ethanol fuels for flex fuel vehicles through one hose while dispensing lower ratio blends through another hose. It is the first dispenser to offer blended products on multiple hoses.

“This capability is a significant step toward increasing the distribution of eco-friendly fuels, particularly because many states are beginning to mandate dedicated hoses for high-ratio ethanol fuels,” Scott Negley, director of Dresser Wayne North American product management says.

The Iowa Renewable Fuels Association (IRFA) has announced that E85 sales in Iowa remained strong during the third quarter of 2008 despite rapidly falling gasoline prices. According to the Iowa Department of Revenue, sales of E85 by Iowa retailers reached 2,208,837 gallons during July, August, and September of 2008 – more than double the 1,270,587 gallons sold during the same period in 2007.

“Despite a narrower gap between E85 and regular gasoline prices at the end of last year, E85 sales remained strong,” said IRFA Executive Director Monte Shaw. “I talked with several retailers that had seen some customers switch from E85 to E10, but they stated that many preferred the home-grown, renewable fuel. E85 is a premier product that many consumers seek out because of their concerns over energy security and global climate change. As gasoline prices head back toward $2 a gallon, E85 remains a great choice for consumers – not just for energy security and the environment, but for the pocketbook as well.”

Iowa currently has 116 public and private E85 outlets. A list of all the E85 stations can be found at www.e85refueling.com. Retailers interested in installing an E85 pump can apply for a grant from the Iowa Department of Economic Development. Information and a grant application may be found at: www.iowalifechanging.com/business/renewablefuels.html.

The newly formed ethanol advocacy group, Growth Energy, has aggressive plans for attacking some of the major issues impacting the growth of biofuels.

During an interview at the National Association of Farm Broadcasting annual meeting, Growth Energy board member Greg Krissek of ICM said they want to “especially focus on the federal work being done on mid-level and higher level blends (of ethanol) but accelerate that.”

The new organization will be “working very closely together” with the Ethanol Promotion and Information Council (EPIC). “As the industry gets bigger, it’s an opportunity for coalitions to be built of groups of producers,” said Krissek.

Growth Energy will also be aggressively fighting back against food companies that have been blaming ethanol production for higher food prices. “The question is simple – are food prices going to fall? Or was it really a disingenuous statement that was made,” Krissek said. The organization is requesting that Congress to hold hearings with food companies to ask them the question.

Listen an interview with Greg Krissek here: nafb-08-krissek.mp3

Podcast: Play in new window | Download (3.4MB)

Debuting in early May of this year, the South Dakota ethanol blender pump program has grown to 34 stations across the state. According to the Ethanol Promotion and Information Council (EPIC), 45 stations have filed applications to receive grants to install these blender pumps which give flexible fuel vehicle owners the choice of filling up with E20, E30, E40 or E85.

“Higher blends of ethanol are the ultimate goal. South Dakota consumers can now reap the benefits of higher blends by being able to access blender pumps across the state,” said Reid Jensen, president of the South Dakota Corn Utilization Council. “South Dakota was first to raise the bar and offer the next generation of fuel to consumers. This is only the starting point. Flex-fuel drivers are discovering that mid-level blends are a better option for them, offering better fuel efficiency, lower emissions and lessening our dependence on foreign oil.”

A state-wide consumer radio and print campaign began on November 5, 2008 to educate consumers about mid-level blends, blender pumps and blender pumps locations.

Department of Agriculture Secretary Ed Schafer and Department of Energy Secretary Samuel W. Bodman are planning to release the National Biofuels Action Plan tomorrow in Washington DC.

The action plan is an interagency plan detailing the collaborative efforts to accelerate the development of a sustainable biofuels industry. The Cabinet Secretaries will announce additional news related to the biofuels industry, new biofuel technology and ethanol blending.

The announcement will be made at the USDA building on Tuesday at 11:30 eastern.

According to the American Lung Association of Iowa, September has proven to be THE month for ethanol blended fuels! The state held several successful events promoting the domestically grown fuel.

“We would like to welcome our first three blender pumps to the state of Iowa: Galva Holstein in Galva, Unity Biofuels in Olds, and Popkes in Rock Rapids,” noted Jessica Zopf of the Iowa Clean Air Choice Team. “Collectively these pumps offer E10, E15, E20, E30, and E85. A big thanks goes to the Department of Agriculture for attending and showing their support for cleaner-burning fuels! A special thanks also goes to Kum & Go for their commitment to offering renewable fuels with their 17th E85 location in Iowa.”

Following is a run down of the events the past month:

Sept. 3rd: Kum & Go Ground Breaking, Johnston, IA for E85 site
Sept. 5th: Unity Biofuels, Olds, IA pumped 600 gallons of ethanol-blended fuel
Sept. 6th: Green Fair, Urbandale, IA with Bob Brown Chevrolet
Sept. 8-9th: Biobased Industry Outlook Conference Display, Ames, IA
Sept. 10th: Kum & Go, Urbandale, IA pumped 1150 gallons of E85
Sept. 12th: Popkes, Rock Rapids, IA pumped approximately 600 gallons of ethanol-blended fuel
Sept. 15th: Farmer’s Coop, Forest City, IA pumped 1000 gallons of E85
Sept. 17th: Galva Holstein, Galva, IA pumped 1335 gallons of ethanol-blended fuel

October also looks to be a busy month in the state of Iowa.