The Battle Over Biofuels

Jim Motavalli

Jim Motavalli | Dec 06, 2012

The oil industry and its allies, sensing blood in the water, are trying to kill off biofuels for good. There are a number of easy targets, including the difficult-to-meet Renewable Fuel Standard (RFS), which sets biofuel targets, and the very unpopular plan to increase ethanol content in gasoline from 10 to 15 percent.

It's complicated. GM and other carmakers love E85 flex-fuel cars, because they get lucrative credits. But they're worried about E15 gasoline. (GM photo)
It's complicated. GM and other carmakers love E85 flex-fuel cars, because they get lucrative credits. But they're worried about E15 gasoline. (GM photo)

Last week, the American Petroleum Institute (API), the powerful trade group representing Big Oil, filed suit against the Environmental Protection Agency to overturn the agency’s 2013 goal of 1.28 billion gallons of biodiesel (up 28 percent from 2012). API said the plan is “unworkable,” with costs outweighing benefits by “as much as $425 million.”

Obviously, the oil industry has the American consumer by the short hairs. What are we going to do when prices go up to $4 a gallon? Not drive? I doubt the ExxonMobils and BPs are losing sleep over's fossil-free divestiture campaign, as noble as it is. Biofuels, even when they're required as a gasoline additive, aren't yet doing much to challenge oil's supremacy, but it's still an annoying sideshow that the petroleum satraps want to shut down.

AAA, long an ally of highway and oil interests, called this week for the EPA to suspend E15 sales. The group wants more public education, and says that some 95 percent of its customers say they don't understand what's going on and are concerned about mechanical damage.

Also getting into the act in opposition to the RFS was the fast food industry, which said quick-serve places could face new costs of $2.5 billion with the biodiesel mandates, thanks to the higher corn prices that are one result of the "food versus fuel" battle. Cheap corn is the single most important ingredient in fast food, whether it's the soda, the burger, or the bun. Ironically, the McDonalds and Burger Kings of this world have long left money on the table by giving away their used grease to biodiesel drivers.

Big Oil had to take legal action, because the Obama Administration’s EPA has repeatedly affirmed the RFS (not finding the required “economic harm”). Growth Energy, representing ethanol producers, describes the RFS as “the most successful energy policy this nation has enacted in the last 40 years.” And, of course, the group talks about rural jobs, leaving out the “food vs. fuel” controversy that has led to higher corn prices (and wavering support in Congress).

Last week the Senate voted by a lopsided margin to allow the Pentagon (the Navy’s Ray Mabus is a big enthusiast) to buy limited supplies of biofuels—even if they cost more than gasoline. Critics—John McCain is one—point to the Navy paying $27 a gallon. Though, by the time a gallon of gas reaches our troops in Afghanistan, that might seem like a bargain, as the total cost per gallon rises to $400. No, we're not kidding.

E15 scare stories get the ratings. It's not surprising that consumers are confused.
E15 scare stories get the ratings. It's not surprising that consumers are confused.

And then there that 15 percent ethanol-in-gas standard. The auto industry hates it, and a lot of consumers (including boat owners) are worried, too. There are lawsuits here, too. In August, the U.S. Court of Appeals rejected multiple challenges to E15 from the Grocery Manufacturers Association.

E15 has been studied to death, supporters say, including six million road miles from the Department of Energy. The DOE claims “no statistically significant loss of vehicle performance (emissions, fuel economy and maintenance) attributable to the use of E15 fuel compared to straight gasoline.”

Will that silence the critics? Nooooo. E15 was finally approved for sale back in August, but the controversy isn’t going away. Consumer Reports says, for instance, “While E15 could be an effective way to reduce petroleum consumption on a national basis, blending additional quantities beyond E10 poses compatibility hurdles with both infrastructure and vehicles.”

Others say worse things. Nine automakers wrote letters to Congress criticizing E15 last year, saying it could void warranties. “We have concerns about the potential harmful effects of E15 in engines and fuel systems that were not designed for use of that fuel,” said Jody Trapasso of Chrysler. Automakers have ultimately had to accept E15, but they're not happy about it.

Consumers are undoubtedly confused about the whole E15 thing. The fuel is approved for cars in the 2001 model year or later—so owners of older ones will have to know to steer clear. One fear is that people with post-2001 cars that are out of warranty won’t have anywhere to turn if E15 makes their engines wear prematurely. And that’s not even mentioning the boats!

This warning at the pumps clears up the confusion...not.
This warning at the pumps clears up the confusion...not.

Warns Tom Dammrich of the National Marine Manufacturers, “While allowing E15 would certainly be beneficial for the struggling ethanol industry, it would have serious negative effects on the nation’s 17 million boats and marine engines currently in operation throughout the U.S….Widespread reports from boaters and marine repair professionals across the country on E10 already indicate that higher blends of ethanol can cause performance problems, fuel tank corrosion and damage to valves, gaskets and fuel lines, not to mention marine engine failure.”

And that’s the responsible industry spokesman. Internet posts warn that this is Armageddon time. If your boat is already a hole in which you pour money (don’t Tom and Ray say that auto repairers work for boat payments?) now you can add in a costly engine rebuild.

We’re not about to all hold hands and sing “Kumbaya” about biofuels. This is war. Personally, I think biofuels have some really interesting applications. They don't offer zero emission, but certainly reduced impact on smog and climate change.  I’m fascinated by the potential of cellulosic ethanol, and gasoline or diesel from algae is very promising, not to mention science-fiction cool. Will biofuels replace gasoline or other fossil fuels? I don’t see that happening anytime soon, given new oil development and super-abundant natural gas.

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