OMAHA (DTN) — With all of the political fights about the role ethanol and other biofuels have in the transportation sector, there is common ground for the ethanol, oil and automobile industries that could bode well for the long-term health of the agriculture economy.
A lower-carbon, cleaner-air future may hinge on bringing more ethanol into the fuel supply as an octane enhancer.
The U.S. Environmental Protection Agency notes a lower-carbon future may not happen without corn ethanol and other biofuels to meet the octane demands of higher-compression engines.
For farmers, bringing high-octane fuels from E25 to E40 could create more markets for corn and a wide variety of feedstocks, including those used for producing cellulosic ethanol.
It may be music to the ears of rural America where lower commodity prices have led to higher uncertainty in 2016.
“Without question, that is the key to this whole thing,” said Doug Durante, director of the Clean Fuels Development Coalition based in Washington, D.C.
“Right now with the RFS capping corn ethanol at 15 billion gallons per year, we are pretty much done in terms of the RFS creating demand and providing new markets for corn. Creating market demand for octane will drive ethanol demand beyond what the RFS requires and open a market for another 15 billion gallons or 5 billion or more bushels of corn.”
Durante said to the extent cellulosic and advanced technologies develop feedstocks such as corn stover, sorghum, other agriculture wastes and biomass, “the sky is the limit.”
The biofuels industry as a whole has been frustrated by how the Renewable Fuel Standard has been implemented in recent years. EPA has made adjustments to biofuels volumes, going away from what was called for by the original law that calls for 36 billion gallons blended in gasoline by 2022.
As a result, RFS doubts have made it difficult for cellulosic ethanol to catch fire commercially.
Right now, however, EPA is in no hurry to put policies in place to support high-octane fuels.
During an automobile industry conference in Michigan last month, Christopher Grundler, EPA’s director of the office of transportation and air quality, said a move to high-octane fuels may not happen until after 2025 when new emissions and fuel-economy standards take effect. Auto manufacturers are required to meet corporate average fuel economy, or CAFE standards, to improve fuel efficiency in cars and light trucks.
The necessary high-octane fuels such as E25 to E40 largely are unavailable. Octane measures a fuel’s ability to reduce engine knock and improve power.
Studies from Argonne National Laboratory, the National Renewable Energy Laboratory and Oak Ridge National Lab in recent months found ethanol blends of E25 to E40 can be more fuel efficient and reduce greenhouse gas emissions in the existing passenger vehicle fleet than E10.
A fact sheet published by the Environment and Energy Study Institute said, “Additionally, the introduction of this high-octane mid-level ethanol fuel could provide an optimized fuel source for the much more efficient internal combustion engines carmakers are developing.”
Dave VanderGriend, chief executive officer of Kansas-based ethanol plant builder and technology company ICM and president of the Urban Air Initiative in Washington, D.C., said it’s time for the biofuels industry to push beyond the RFS.
VanderGriend, who is considered to be an ethanol industry pioneer as one of the primary builders of the modern industry, said ethanol has sold itself short with a push for blends such as E15. He’s not necessarily against the RFS or expansion into E15, he said, but ethanol has so much more to offer beyond a blending component of gasoline.
Over the past decade, VanderGriend has been looking at higher ethanol blends and how they affect engines and their emission components. Based on his work, VanderGriend said ethanol cuts harmful tailpipe emissions compared to fossil fuels.
“It (ethanol) is low-carbon, and science continues to validate that even if EPA is using old data,” he said.
Ethanol’s carbon footprint has improved in the past decade, VanderGriend said, as farmers have continued to improve farming practices, including applying fertilizers using GPS and implementing no-till practices that minimize runoff and hold soil. Those changes, he said, have made the corn crop more sustainable.
“The top crop is the corn plant,” he said. “It grows feed, fuel and sequesters carbon. Ethanol is a high-octane addition to gas — 2 to 2.5 octane added for every 10% added to fuel. It is a win, win all the way around.”
Electric cars and so-called drop-in biofuels such as bio-butanol that require no change in pumping infrastructure because it is nearly identical to gasoline, garners most of the attention from EPA.
“We’re out here validating the molecule, going after EPA for bad science,” VanderGriend said. “We’re dealing with major health risks in urban areas. With smoke out of tailpipes, there is a growing body of science on the health effects. EPA is not even looking at that. They are fixated on coal and diesel. We have existing infrastructure to deal with it. We have to look beyond the RFS. It has to incentivize our competitor. It was never intended as a destination.
“We in the ethanol industry have failed to look down the road. What do we want to be when we grow up? We’ve got a train wreck coming. Our industry does not see it. Production at ethanol plants has increased 20% to 40% year over year and continues to improve. The RFS is limited to 15 billion gallons per year corn ethanol.”
Bob Dinneen, president and chief executive officer of the Renewable Fuels Association, said his group continues to press EPA not to wait for 2025 before laying the policy groundwork for high-octane fuels.
What’s more, Dinneen said he believes the RFS is an important foundation for those fuels.
“The autos have been talking high-octane fuels for a while,” he said. “Oil has been talking high-octane fuels. We’re trying to move the agenda forward. I think we’ve been looking down the road for a while. This is something we need to prepare for now.
“Ultimately, it is the autos who will have to make the decision to send market signals.”
Dinneen said there likely would be no need for Congressional action because “EPA has the tools” to make it happen.
“I’ve not heard of anyone (in Congress) who expresses opposition to high-octane fuels,” he said.
Gasoline retailers and the oil industry in general have been opposed to higher ethanol blends based on claims by the industry of insufficient infrastructure to handle those fuels on a large scale.
A July 2016 study from the National Renewable Energy Laboratory, or NREL, concluded ethanol blends of E25 to E40 were the so-called sweet spot for fuel efficiency and emissions reductions. To read more about the study, visithttp://bit.ly/…. What’s more, NREL said infrastructure limitations were overstated.
“It would be a significant benefit if a new fuel utilized the existing infrastructure,” the study said.
“Our findings were that neither technical nor materials obstacles are likely to prohibit HOF (high-octane fuel), but new aboveground equipment compatible with HOF will need to be installed. Sufficient capacity was found to allow the introduction of HOF at the nation’s terminals.”
The Urban Air Initiative was part of an effort to petition EPA to change a rule that requires fuels like E30 to be commercially available to be used as test fuels to certify new vehicles for compliance with emissions and fuel economy standards. The U.S. Court of Appeals for the D.C. Circuit rejected that petition in July 2015.
Groups like the Urban Air Initiative, however, are clinging to a line in the court’s decision as a reason for hope: “If EPA permitted vehicle manufacturers to use E30 as a test fuel, there is substantial reason to think that at least some vehicle manufacturers would use it.”
What’s more, EPA agreed it would accept any applications from the auto industry for alternative test fuels without requiring them to be available nationwide — essentially opening the door for higher ethanol blends.
“Give us access to consumers,” VanderGriend said. “Let the chips fall where they may. We have a great product. We are being limited.”