Iowa Gov. Branstad Expands “Fueling Our Future”

Iowa Governor Terry Branstad’s “Fueling Our Future” program has recognized two retailers for their innovative plans to increase accessibility to higher ethanol and biodiesel blends. Farmers Cooperative based in Mount Ayr, Iowa and Oak Street station based in Inwood, Iowa both received $125,000 to offset the cost of adding renewable fuel infrastructure for biodiesel and ethanol. In addition, he has committed to expanding the program.

I’ve long been an advocate for increasing consumer access to locally-produced, environmentally-friendly renewable fuels,” said Iowa Governor Terry Branstad during a press conference. “The two retailers receiving funding as part of the ‘Fueling Our Future’ program will provide Iowans with additional access to higher blends of ethanol and biodiesel, supporting Iowa products and jobs, while also improving air quality.”

The Farmer’s Cooperative station in Mount Ayr will offer E10, E15, and E30, E50 and E85 as well as B5, B10 and B20. “Based on the consumer response to higher levels of renewable fuels at our Creston location, Farmers Cooperative wants to add more blender pumps where they are needed,” said Farmers Cooperative Creston Location Manager Darin Schlapia. “Mount Ayr is the hub of Ringgold County and we want to capture that customer base by offering more American-made fuel options. We’re pooling the Coop members’ resources to drive profitability and offer more competitively priced fueling options not otherwise available.”

Oak Street Station received a grant for its new fueling site set to be built in the Northwest Iowa town of Inwood. The station will offer E10, E15, E30, and E85, as well as B5 year-round and B99.9 during the summer months for independent jobbers and special use customers such as tractor pullers.

Oak Street Station Accountant Lisa VanRegenmorter said, “At Oak Street Station, we have a passion for renewable fuels and want to help grow the industry. Putting in blender pumps and biodiesel will continue our support for biofuels, provide fuel choices for our customers, and supply customer data to support the state’s Fueling the Future initiative.”

The “Fueling Our Future” program is administered by the Iowa Department of Transportation and the Iowa Department of Agriculture and Land Stewardship. The purpose of the program is to gain better consumer information regarding fueling preferences, expand the use and availability of higher blends of ethanol and biodiesel, and provide a pathway to reduce particulate matter in Iowa.

Lucy Norton, Managing Director of the Iowa Renewable Fuels Association applauds the program. “We commend Gov. Branstad for his unwavering support in making Iowa a model state for fuel choice and consumer access to clean-burning renewable fuels. With the help of Gov. Branstad, IDALS, and the Iowa DOT, Iowa is raising the bar to show the nation that higher blends of ethanol and biodiesel are the preferred fuels.”

Midtex Oil Offers E85 in San Marcos, Texas

Midtex Oil, L.P. is now offering E85 at its Spirit-branded convenience store located in San Marcos, Texas. Its fifth E85 station in the state, it is located off the interstate at 1214 IH-35 South, San Marcos, TX 78666.

Midtex Oil E85 pump in San Marcos Texas“Our local drivers are savvy enough to know the benefits of E85 fuel,” said Rodney Fischer, owner, Midtex Oil. “When we put up that E85 sign, we usually don’t even need to advertise about ethanol. It speaks for itself. This is one of several eco initiatives we have at Midtex.”

According to Midtex Oil, by offering this blend of 85 percent ethanol, 15 percent gasoline, these E85 stations will help the area reduce emissions, lower dependence on foreign oil and spur domestic economic growth.

“We have a longstanding benefit from Midtex’s bullishness on giving their customers more choice in fuels, that also happen to be better for the environment,” said Steve Walk, an Executive Director of Protec Fuel who worked with MidTex Oil to install the E85 pump. “This E85 station is instrumental in the greater Austin and San Antonio area to provide the building blocks for additional higher ethanol blends, like up-and-coming E15.” Protec also did a complete dispenser island renovation at this Spirit.

San Marcos, San Antonio, New Braunfels, Kyle and Austin are all also home to other E85 stations as well, making it very convenient for Flex-fuel (FFV) drivers utilizing E85 to fuel up.

“The Lone Star Clean Fuels Alliance and its stakeholders are pleased to see more E85 available in the region,” added Stacy Neef, Exec. Director of the Austin-based Clean Cities coalition. “The choice of E85 provides a large proportion of vehicles on the road today the ability to choose an alternative fuel at the pump, since half the new U.S.-produced cars can use E85.”

Iowa Senate Votes for Renewable Fuels

The Iowa State Senate has voted unanimously (48-0) to pass Senate File 2344. The Iowa Renewable Fuels Association (IRFA) commended the Senate and noted the policy move showed tremendous, bipartisan support for renewable fuels.

“I applaud the Iowa Senate for voting unanimously to protect Iowa jobs and access to homegrown, clean-burning renewable fuels,” said IRFA Policy Director Grant Menke. “This vote sends a clear message that Iowans are serious about increasing renewable fuels Iowa fuel pumpproduction and use, expanding consumer fuel choice and growing Iowa’s economy.”

With renewable fuels producers facing significant federal policy uncertainty, Senate File 2344 protects Iowa’s renewable fuels industry by extending the state’s biodiesel production tax credit that is set to expire at the end of this year, and enhancing the state’s E15 retailer tax credit to help alleviate extra costs to Iowa retailers who want to offer E15 as a registered fuel during the summer driving season. The bill also updates Iowa Code to define biobutanol as a legal renewable fuel option for Iowans.

Iowa’s biodiesel producer incentive offers a $.02 per gallon refundable credit on the first 25 million gallons of biodiesel produced in any single plant. The incentive is set to expire at the end of calendar year 2014, but the legislation passed by the senate would extend the credit through 2019.

An amendment added to the bill would also extend an Iowa retailer credit of 4.5 cents per gallon for 5 percent biodiesel (B5) through 2019. It was set to expire in 2017. The amendment also extends retailer tax credits for biodiesel, E15 and E85.

The Iowa Biodiesel Board (IBB) commended the vote. “This state policy will encourage biodiesel production to remain in Iowa, which benefits Iowa’s economy and reputation as an American energy producer,” said Grant Kimberley, executive director of IBB. “It will also help shelter our state’s biodiesel industry from the impact of uncertainty over the federal Renewable Fuel Standard and other federal policies.”

The Rise of E85

The latest edition of Today in Energy follows the rise of E85 (85% ethanol, 15% gas). According to the Alternative Fuels Data Center (AFDC), Minnesota leads the nation with 336 E85 retail locations, while states outside the Midwest are adding E85 stations most quickly. Today, 2 percent of all retail stations in the U.S. offer E85 serving 5 percent of the U.S. light-duty vehicle market, including flex fuel vehicles (FFVs) that can use E85.

In 2007, the majority of E85 stations were located in Minnesota, Illinois, Indiana, Iowa and Wisconsin: the same states leading the nation in corn-ethanol production. Today, these states continued to add E85 stations while California, New York, Colorado, Georgia E85 retail stations by stateand Texas added 49 E85 stations through 2013. As a result, the share of nationwide E85 stations in the five traditional ethanol-producing states of the Midwest fell from 54 percent in 2007 to 36 percent in 2013.

California and New York have seen some of the fastest growth in new E85 fueling stations, increasing from fewer than a dozen stations combined in 2007 to more than 80 stations each in 2013. Only two states (New Hampshire and Alaska) currently have no E85 fueling stations, compared to nine that had none of these stations in 2007.

Growth in the number of E85 fueling stations has slowed in the past two years. The number of E85 fueling stations in the country nearly doubled between 2007 to 2011, from 1,229 to 2,442, but only increased by 7 percent from 2011 to 2013, when the total reached 2,625. Notwithstanding the increase in the number of retail outlets selling E85 since 2007, the vast majority of the nation’s approximately 156,000 retail motor fuel outlets do not offer E85.

ACE Preparing for Biofuels Beltway March

Make Washington keep their word was a common mantra during the National Ethanol Conference last week. American Coalition for Ethanol (ACE) Executive Vice President Brian Jennings is going to help them do just that. Each March, ACE brings nearly 100 ethanol advocates to the Hill to meet with Legislative and key stakeholders to tell their stories about the benefits of ethanol. This year’s Biofuels Beltway March is just around the corner on March 26-27, 2014 in Washington, D.C.

nec14-jenningsThis year, Jennings said they are doing something a bit different. They are asking retailers from different states who have successfully added the infrastructure or the equipment they need to sell E15, E85 or both, to join them. “So they will deliver the message straight from their own experiences that higher blends work. The RFS [Renewable Fuel Standard] works. We want to see you continue to fulfill what the program was intended to do,” said Jennings.

During the NEC conference, a spokesperson from Marathon said E85 won’t work and E15 is a nonstarter. When asked to respond to those comments, Jennings answered, “We added over 200 E85 sites in 2013 and it was based on price. So he is simply not correct when it come to E85. Retailers are looking at it and understanding better today than they ever have how to price E85 relative to straight gas or relative to E10 so the consumer keeps coming back and makes the choice that it works well in my FFV [flex fuel vehicle].”

In terms of E15, Jennings said he was referring to liability. But there are things ACE is working on along with others to erase liability concerns whether those are real or perceive. The other half of the battle and helping them understand the blending economics.

“I was disappointed to hear what the gentleman from Marathon say what he did about higher blends, but what’s going on on the ground, in the states defies the message he was trying to deliver about E85 and E15,” added Jennings.

Listen to Cindy’s interview with Brian Jennings: Interview with Brian Jennings, ACE

2014 National Ethanol Conference Photo Album

NEC Coverage sponsored by Patriot Renewable Fuels LLC

State Level Blend Walls Update

nec14-randy-jenningsThe phrase “all politics is local” seems like it sure could apply to some of the decisions to overcome the ethanol blend wall. Challenges to increasing ethanol in the marketplace exist on the state level as well as the federal level, and participants at the National Ethanol Conference learned more about efforts to break down the blend wall in various states, including Tennessee, where Randy Jennings is Director of Program Operations for the state Department of Agriculture Division of Consumer & Industry Services.

“Definitely, the walls are falling,” is how Jennings described the results so far of their efforts, along with the Renewable Fuels Association (RFA), to increase the amount of ethanol to be blended into gasoline in his state.

He said they brought together various Tennessee state agencies, such as the state’s Department of Environment and Conservation (the regulator of fuel storage tanks), Commerce and Insurance, and Department of Labor and Workforce Development, as well as stakeholding industries in Tennessee. They are proposing some key changes in current rules to also be proposed at this summer’s National Conference on Weights and Measures (NCWM). Those changes include: an Environmental Protection Agency (EPA) waiver for up to 15 percent ethanol, redefining E85 and how it is marketed, and proposing yellow grip guards at the pump just for flex-fuels, among other proposed changes. Jennings hopes that there will be more fuel choices for consumers, while working with the industry.

“We remain committed to working with all stakeholders in a fair, consistent manner.”

Hear more of his remarks here: Comments from Randy Jennings, Tennessee Department of Agriculture

nec14-kristy-mooreMeanwhile, RFA Vice President for Technical Services Kristy Moore outlined some of the challenges they face on the state level, including EPA’s restrictions during the summer volatility season.

“[For example in the Kansas City, Kansas area], gasoline in the summer must [meet EPA's capped requirements]. Gasoline in that area blended with 9-10 percent ethanol is allowed an 8 PSI requirement. But gasoline with 15 percent ethanol, has to meet the more restrictive [requirement],” she explained. And then in the rest of the state of Kansas, there are other requirements for E10 and E15 and above blends.

Moore said they have needed to work state-by-state, making sure they were not crossing laws already on the books and trying to get legislatures to make changes so there could be an increase in blends and more uniform blending rules across the country. She believes they’ve helped eliminate impediments in many states.

“We’ve really have had some major success, major education, and a lot of good partnerships in these state regulators to understand what E15 fuels can do, what blender pumps can do, what E85 can do for their marketplace and their fuel markets.”

Listen to more of here remarks here: Comments from Kristy Moore, RFA

2014 National Ethanol Conference Photo Album

NEC Coverage sponsored by Patriot Renewable Fuels LLC

Iowa E85 Sales Set Record in 2013

Iowans have purchased a record number of gallons of E85 (85 percent ethanol, 15 percent gas) in 2013. According to the Iowa Renewable Fuels Association (IRFA), total E85 sales in 2013 reached 10,854,117 gallons, up nearly 20 percent from 2012 and an increase of more than 130,000 gallons from the previous record in 2011. The sales figures were reported by the Iowa Department of Revenue. manning_ia_pumpE85 sales in Iowa finished strong in 2013 setting a fourth quarter record at 2,784,326 gallons, up more than 67 percent from fourth quarter 2012 and an increase of more than 700,000 gallons from the previous fourth quarter record in 2010.

To learn more about Iowans choice of ethanol blends, I spoke this afternoon with Grant Menke, policy director for IRFA. My first question: how much more can we do with E85 and higher blends of ethanol in Iowa. “We can do a whole lot more,” answered Menke. Iowa is a 1.5 billion to 1.6 billion gallon gasoline market and the state is at 11 million gallons for E85. “So there is clearly a lot of growth that needs to take place there. With a strong growing RFS (Renewable Fuel Standard) we really think this can happen.”

Menke noted that consumers who purchased E85 last year did so at very competitive prices. He said he remembers buying E85 during the third quarter at $1.10 per gallon less than a gallon of E10. He said ethanol is a homegrown fuel, good for the economy, good for farmers, and good for the environment. It’s a win-win-win. “If we can continue to price this fuel well, which the RFS allows us to do, we’re going to continue to break records in the future,” stressed Menke.

I asked Menke why it was so important to not only keep the RFS in tact, but moving forward. He noted that the Environmental Protection Agency (EPA) comment period for the 2014 RFS has been completed and the ball is now in the EPA and White House’s court. They have heard from tens of thousands of RFA supporters as to why a reduction in the RFS would be devastating to this industry: first generation, biodiesel and cellulosic ethanol. “If we want to continue to diversify our fuel supply with cleaner, homegrown, renewable fuels, we need a strong growing RFS,” added Menke.

IRFA aids retailers who want to offer consumers more choices at the pump, and noted that retailers who diversify their fuel offering (biodiesel, higher blends of ethanol) can have financial success in this space. Menke said they are hoping to break records in 2014.

Listen to my interview with Grant Menke here: Iowa E85 Sales Set Record in 2013

NEC Breaking Down Blend Wall Panel

nec14-blend-wallTying in to the first part of the theme “Falling Walls, Rising Tides”, the second panel at the 2014 National Ethanol Conference was focused on Breaking Down the Blend Wall.

The panel, moderated by Renewable Fuels Association Director of Market Development Robert White, featured infrastructure experts who discussed efforts underway to expand options for retailers and overall availability of ethanol blends above E10.

Panelists were:
Bruce Sprague, Product Manager, Gilbarco Veeder-Root
Patrick Jeitler, Dispenser Product Manager – North America, Wayne, A GE Energy Business
Steve Walk, VP of Business Development, Protec

Listen to the entire discussion here: NEC Blend Wall Panel

2014 National Ethanol Conference Photo Album

NEC Coverage sponsored by Patriot Renewable Fuels LLC

Iowa RFA President Steve Bleyl Seeks Advocates

The new Iowa Renewable Fuels Association (Iowa RFA) President Steve Bleyl is seeking advocates for biofuels. Iowa RFA President Steve BleylWhile giving his remarks to kick off the 8th Annual Iowa Renewable Fuels Summit held in Altoona, Iowa, he had people who were driving flex-fuel vehicles, using E15 or mid-level ethanol blends and driving biodiesel vehicles stand up. Most of the 600 plus attendees were still sitting.

Thus, said Bleyl who works for Green Plains Renewable Energy (they have three ethanol production facilities in Iowa), the industry and consumers need to become better advocates for renewable fuels such as ethanol and biodiesel.

Bleyl noted that Iowa is a motivated state to have higher ethanol blends. The state incentivizes retailers to blend over 10 percent ethanol (E10), and he said you’re starting to see that effect take off. He noted that the IRFA board has given his staff some pretty lofty goals. They want E15 in the state and his goal is to have 100 E15 pumps in Iowa by the end of this year.

I asked Bleyl, so how exactly do we make this goal happen? “I’m in a unique situation. l  will actually write someone at a retail gas chain and tell them, hey, I was at your gas station today and your E85 is not competitively priced. I know what the price should be,” answered Bleyl. But he said he’s not doing it in a way to tell them how to price their fuel, but in a way that let’s them know he realizes they want to do more and he wants to help.

He challenged me and all those at the conference as well as in his interview to be better advocates and call retail chains and write letters and ask for E15 and E85 and biodiesel. He stressed that if retailers know consumers want these fuels, then most of them will offer the fuels to their customers.

His last piece of advice, “Fight globally, but act locally.”

Listen to my interview with Bob Dinneen here: Iowa RFA President Steve Bleyl Seeks Advocates

View the 2014 Iowa Renewable Fuels Summit photo album.

EcoEngineer’s Jim Baker Wins Coveted FFV Mower

irfasummit-E85 John Deere riding mowerIf there was one item that was coveted above all others at the 8th Annual Iowa Renewable Fuels Summit, it was the E85, flex fuel riding lawn mower donated by John Deere. Attendees who submitted comments to the EPA were registered to win and people were jockeying for position to run up to the podium when their number was announced….and the winner is…Jim Baker with EcoEngineers who noted that he is going to have to buy a new house with a bigger yard to get the full value out of his new toy.

Jim was so excited he was hoping to drive it home but, well, it was a tad cold out. EcoEngineers, who is based in Des Moines, is a company specializing in biofuel compliance issues such as RIN management, plant registrations and more. EcoEngineers also hosts webinars for the industry as well as workshops. It is anticipated that when the weather gets warmers Jim will ride to work on his E85 John EcoEngineers Jim Bakers ticket to FFV John Deere mowerDeere riding mower and as a gal about town, I will be sure to get a photo and tweet it out.

Want to get a peek at this bad boy? Jim is taking applications for lawn mowing jobs. I suspect there will be a lot of people lining up to mow his lawn this summer.

Monte Shaw, the executive director of the Iowa Renewable Fuels Association (Iowa RFA) who was the host of the event, said that he wanted to give special thanks to John Deere for their support of the event and the industry. John Deere has been selling agricultural equipment designed to use biodiesel for years.

Listen to my interview with Jim Baker here: EcoEngineer's Jim Baker Wins Coveted FFV Mower

View the 2014 Iowa Renewable Fuels Summit photo album.

Bob Dinneen: Consumers Want Choice at the Pump

Bob Dinneen, president and CEO of the Renewable Fuels Association gave a legislative update during the 8th Annual Iowa Renewable Fuels Summit and spoke of the efforts of Big Oil to quash the renewable fuel industry. The Summit took place on the last day of the EPA comment period for the 2014 proposed Renewable Fuel Standard (RFS) and Dinneen told a funny story.

irfasummit-dinneen-14In December when the EPA hosted its public hearing, that lasted nearly 10 hours, the American Petroleum Institute (API) hired young kids to ride around in support of oil. However when Iowa Governor Terry Branstad gave his comments (he also gave an impassioned speech during the Summit) the kids hired by API cheered for renewable fuels. Needless to say, Dinneen noted that API was none too happy, but he said that shows that consumers do want the choice and they will choose renewable fuels like ethanol.

So I asked Bob why this fight is this happening. Why did the EPA go backwards on its 2014 RFS proposal?

“Well it’s happening because some bean counter in the Office of Management and Budget decided to take API’s talking points and accept them as fact,” answered Dinneen. “That somehow the rising price of renewable fuel credits (RINs) was going to drive up the price of gasoline. “Now there is no credible evidence to make that suggestion. Indeed if you were to plot the price of RINs versus the price of gasoline, there is actually a negative correlation suggesting that gasoline prices will be driven down by higher RIN prices.”

Dinneen noted that the EPA has become confused by the issue and hopes as the agency reviews all the comments will have a better understanding in RINs and what they were supposed to do – incentivize investment in E85 refueling infrastructure, allow E15 to be offered and provide consumer choice at a reasonable cost.

This fight is about access to the consumer, its about market share said Dinneen. API has been losing battles and is trying to re-litigate the RFS. Yet Dinneen said the RFS is doing everything it is supposed to do. He believes that at the end of the day, API will lose again.

This process will take several months. “I wish they would come to their senses sooner. The marketplace could certainly use the certainty that that would provide. But the reality is its going to take a while,” explained Dinneen.

I asked him what consumers should do after the comment period closes. “Consumers should recognize while farmers have a lot of stake here, they do as well,” answered Dinneen. “Because without ethanol, without the RFS, there price of gasoline goes up. So consumers should recognize they have as much at stake in all of this as the ethanol industry itself.”

Listen to my interview with Bob Dinneen here: Bob Dinneen: Consumers Want Choice at the Pump

View the 2014 Iowa Renewable Fuels Summit photo album.

IRFA’s “Fuel the Future” Winners Announced

Jon Low 2014 IRFA Fuel the Future Grand Prize WinnerThe winners of the Iowa Renewable Fuels Association’s (IRFA) 4th Annual “Fuel the Future” Video Contest were announced today during the 8th Annual Iowa Renewable Fuels Summit. The first place award and $1,000 went to John Low of Marion, Iowa. An 11th grader from Linn-Mar High School won for his highly entertaining, creative and informative video, “E15: The Fuel of the Future”. Low beat out 26 other entries.

Second place, and winner of a $600 prize, was awarded to Tyler Yates and Dalton Hart of Muscatine, Iowa for their video entitled, “Saving the Planet with Ethanol.” Tyler and Dalton are juniors at Muscatine High School.

IRFA 2014 Fuel the Future Video 3rd Place WinnersThird place, and winner of a $400 prize, was awarded to Megan Anderson, Trenton Bacus and Tyler Blaudow of Bussey, Iowa for their “Paul Harvey spoof” entitled, “The Farmer Made Biodiesel.” Anderson is a senior, while Bacus and Blaudow are juniors at Twin Cedars High School.

“Every year I’m amazed at how creative and informative these student-produced videos are,” said IRFA Communications Director T.J. Page. “The IRFA congratulates all of the ‘Fuel the Future’ winners, as well as each of the Iowa high school students who took on the challenge of entering this year’s contest.”

IRFA’s “Fuel the Future” video contest challenges Iowa high school students to create the best video highlighting the importance and benefits of renewable fuels—such as ethanol and biodiesel—to local communities, Iowa and the nation. This year’s contest was sponsored by the law firm of Faegre Baker Daniels LLP.

View the 2014 Iowa Renewable Fuels Summit photo album.

Informa Study Shows E85, E15 Can Achieve RFS

According to a new study by Informa Economics, “Analysis of the Potential Use of Biofuels toward the Renewable Fuel Standard in 2014, shows intended Renewable Fuel Standard (RFS) 2014 blending requirements as outlined by statute can be reached through expanded consumption of E85, E15 and carryover of RIN credits (Renewable Identification Numbers). According to the Renewable Fuels Association (RFA), the study “clearly demonstrates why the Environmental Protection Agency’s proposal to reduce RFS blending requirements is unnecessary and imprudent”.

Using empirical data from 2013, the study finds that E85 sales volumes respond strongly to changes in RIN prices. The authors say this demonstrates the RFS program is working exactly as intended to drive expanded consumption of biofuels above the so-called E10 “blend wall.” The study finds, “It is possible for all statutory components and allocations within the Renewable Fuel Standard to be met in 2014, after adjustments have been made for a waiver of a large majority of the Cellulosic Biofuel Standard.”

The study takes a closer look at likely consumption, finding that ethanol consumption in 2014 could be at least 13.7 billion gallons, comFreedom Fuel ethanol blender pumppared to the EPA’s assumption of 13.0 billion gallons. It points toward E85 as a major contributor, “E85 accounts for most of the potential for expanded consumption….The increase could be even larger if E85 is priced at a sustained discount to gasoline (on an energy-equivalent basis), as the consumer response could be stronger than implied by historical data, since discounts have been transitory in the past.”

Bob Dinneen, RFA president and CEO said of the report, “This study is further proof that the so-called ‘blend wall’ can be easily scaled if the RFS is allowed to work as intended. As I have said time and time again, the RIN mechanism is the tool to drive innovation and infrastructure to accommodate higher ethanol blends like E85 and E15. There is absolutely no need to reduce or repeal the RFS. It is working.”

Roger Zylstra, a farmer from central Iowa and current president of the Iowa Corn Growers Association added, “We hope that this study further emphasizes that the EPA decision to lower the RVO just doesn’t make sense. As a corn grower, I know we have the science and the production to back up the current RFS. It is working and we need to move forward, not backward on our energy security.”

The Informa analysis was commissioned by RFA and the Iowa Corn Promotion Board.

No Changes Needed to 2014/2015 RFS

According to a new analysis from Iowa State University’s Center for Agricultural and Rural Development (CARD), the Environmental Protection Agency’s (EPA) proposal to reduce the 2014 Renewable Fuel Standard (RFS) blending requirements is unwarranted and economically irrational. “Feasibility and Cost of Increasing US Ethanol Consumption Beyond E10,” demonstrates that the 2014 statutory RFS requirements could be easily met with no new investment in refueling infrastructure, and 2014 requirements could be achieved with only modest infrastructure investments.

CARD LogoWhen EPA released the lower volume obligations for renewable fuel back in November 2013, the agency cited the so-called E10 “blend wall” as a key factor in its decision to propose the cut. Yet the authors of the report, Bruce Babcock an Sebastien Pouliot write, “…the assumption by EPA that a 14.4 billion gallon ethanol mandate in 2014 was not feasible is not correct. …meeting a 14.4 billion gallon ethanol mandate is feasible in 2014 with no new stations, modestly lower E85 prices, and judicious use of available carryover RINs.”

The analysis finds that cutting the 2014 blending requirements below the “blend wall” results in a “self-fulling prophecy that stunts any future growth potential in domestic ethanol consumption”. The report states that exceeding E10 levels (overcoming the ‘blend wall’ with higher blends of ethanol such as E15 and E85) is contingent on the EPA setting mandates sufficiently high to incentivize the investments in fueling infrastructure that allow the targets to be met.

In terms of 2015, the authors argue that, “Adopting a 14.4 billion gallon ethanol mandate would send a clear signal that EPA is not locked into keeping ethanol mandates below E10 levels. It would also increase RIN prices enough to incentivize investments in new E85 stations that would give EPA the freedom to move the ethanol mandate to 15 billion gallons in 2015.”

The authors conclude, “The 14.4 billion gallon mandate level in 2014 is feasible to achieve even if no new E85 stations are added. Adding stations would lower the cost of meeting the 14.4 billion gallon mandate and, more importantly, would allow EPA to increase mandates by even more in the future.”

The analysis also finds that if EPA set the 2014 requirement for renewable fuel at 14.4 billion gallons, and no new E85 or E15 stations were added, RIN prices could be expected to average 69 cents each. However, adding 500 additional E85 stations in 2014 would reduce RIN prices to just 18 cents apiece.

Murphy USA Opens First E15 Station

logo-murphy-usaMurphy USA has opened the first E15 (15 percent ethanol, 85 percent gasoline) station in Arkansas, located at 2720 N. West Avenue in El Dorado. The Arkansas station is also the second Murphy USA location to offer E85 (85 percent ethanol, 15 percent gasoline). E15 is approved for vehicles 2001 and newer, while both E15 and E85 can be used in flex fuel vehicles. Murphy USA operates 1,179 stores in 23 states throughout the country, with additional E15 and E85 locations being planned in the Midwest.

“It is very encouraging to see a major retailer like Murphy USA understand the value in offering ethanol-blended fuels like E15 and E85, and we are confident they will have a positive experience,” stated Robert White, director of market development for the Renewable Fuels Association (RFA). “Retailers across the country are always looking for new opportunities to increase volumes and margins, while also attracting new consumers, and E15 and E85 are the perfect fit.”

The very first E15 station opened over a year ago in Lawrence, Kan. With the addition of the Arkansas station, there are now more than 60 stations in 12 states registered to offer the higher level fuel blend. E15 is the most tested fuel additive in the history of the Environmental Protection Agency and has been on the market for more than 16 months and driven over 45 million miles with no known cases of engine damage. Additionally, E85 has been available since 1995. There are now approximately 3,216 stations that sell E85 and more than 15.5 million flex-fuel vehicles on the roads.

Listen to the interview with Robert White about Murphy Oil’s E15 rollout strategy: Murphy USA Embraces E15