Addressing Two Objections to My Midwest Ethanol Plan

August 19, 2019

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by Robert Rapier (Forbes) ... My proposed solution is for the Midwestern states to band together to provide sufficient state incentives to develop a major Midwest corridor where E85 -- a blend of 85% ethanol and 15% gasoline -- is the primary fuel of choice for consumers. There is enough potential demand in the Midwest to consume nearly five times current U.S. ethanol production. This would shift control of ethanol demand from federal government decrees -- where support is mixed -- to the state governments that strongly benefit from the ethanol industry. (I have actually proposed such a solution for about a decade).

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There were two consistent objections raised, which I will address.

Objection 1: Not Enough Flex Fuel Vehicles

The first was that there aren't enough flex-fuel vehicles (FFVs) on the roads to consume that much E85. While it is true that more would have to be eventually built, there are far more E85 vehicles on the roads today -- predominantly in the Midwest -- than there is demand for E85.

In 2017, there were more than 22 million FFVs on the roads. That represents nearly 10% of the entire automobile fleet. In 2018, General Motors had the most FFVs with 13 models. Ford followed with 11, and Fiat Chrysler had seven.

Plus, according to Renewable Fuels Association (RFA) Vice President of Industry Relations Robert White, “There are more than 4,000 retail stations throughout the U.S. that offer E85 or other ethanol flex fuel blends, and that number grows each week."

Thus, the E85 infrastructure is there, and there are plenty of E85 vehicles on the roads to begin growing E85 demand.

Further, vehicle manufacturers respond to demand. If they see E85 demand rising, they will build more FFVs to respond to that demand. This simply isn't an issue, at least certainly not until the FFVs that are already on the roads begin to consume the E85 they were designed for.

An acquaintance from Iowa told me that many users balk at the lower gas mileage they get from E85. This means they have to fuel up more often. That's a key reason that the E85 price needs to be cheaper than the price of gasoline on a per mile basis.

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Objection 2: Ethanol Needed for Octane

The second objection was that a plan to increase E85 demand in the Midwest is unnecessary because refiners across the country need ethanol to boost the octane of gasoline.

There are multiple problems with this argument. The first is that if refiners really need ethanol for octane, then they will use it. Refiners are in the business of making money, and if the RFS was not in place they would evaluate ethanol as an octane-boosting option in the same way they would evaluate other options.

Keep in mind that refiners must also buy the oil they refine. If the economics favor ethanol, they are going to buy as much ethanol as they can.

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Some refiners would absolutely opt to use ethanol to boost octane, but others would make other choices.

What are those choices? Consider that refiners have the following options for boosting octane. I will address some objections to these components below, which are listed with their typical blended octane ratings. Most of these ratings are exactly those shown at the RFA website, which cites the Department of Energy as the source:

Methanol -- 117
Ethanol -- 114
Xylene -- 107
Toluene -- 104
Reformate -- 100
Alkylate -- 95
Butane -- 93

For reference, nearly 90% of all gasoline sold is regular, which has an octane rating of 87. Most refiners can easily meet that mark without any need for additional blending components.

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These aromatics are already removed in some refineries, as they are valuable feedstocks for petrochemical processes.

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If the RFS wasn't in place, they would make decisions based on the most favorable economics. That might mean building or expanding an alkylate unit. That's not a hypothetical, as alkylate capacity has been steadily increasing over time.

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But refiners that are forced to blend 10% ethanol must sometimes operate the rest of the refinery in a suboptimal fashion to produce lower-octane blending components so they end up with the appropriate octane in the finished gasoline. Without the RFS, refiners would change how they operate, and the demand for ethanol as an octane booster would certainly fall. READ MORE

The Ethanol Industry's Flaw Is Its Entitlement Mentality (Forbes)

Never Bring A Rapier To A Gun Fight: Ethanol critics with glass arguments shouldn't throw stones (The Auto Channel)

New EPA rule could wreck your engine this summer (Rockland County Times/Houston Chronicle)

An Ethanol Defender Misses The Point (Forbes)

The Best Defense Is Still A Good Offense: You Forgot To Take The Safety Tip Off Your Points (The Auto Channel)

The Great Ethanol Debate: Status Quo Or New Paradigm? (Forbes)

Open fuel market to higher ethanol blends (Watertown Public Opinion)

Is EPA At War With The Ethanol Industry? (Forbes)

Excerpts from The Auto Channel: I continued reading, and in the very next paragraph I read something that I don't agree with. Robert wrote:

"The business model of the ethanol industry...is to get the federal government to force consumers to use their product."

I felt that this is an unfair and myopic view of the ethanol fuel industry, for which there are real reasons and needs for the ethanol industry to exist. I read more, and found some additional points of disagreement, such as:

"Refiners object to the entire concept of being forced to blend ethanol, and for being penalized if they don't. Refiners have spent billions of dollars complying with the ethanol mandates. That cost to the refiners is essentially a transfer of wealth to the ethanol industry."

"...the ethanol industry...relied on federal subsidies, import tariffs designed to keep out Brazilian ethanol, and a federal mandate. After fighting to keep the federal subsidies for years, the ethanol industry finally lost the main federal subsidy ($0.45 per gallon) at the end of 2011."

"Forcing consumers to use your product is the opposite of the free-market conservatism Senator Grassley says he supports."

I believe that these comments from Robert are intellectually dishonest and historically inaccurate. The petroleum oil industry enjoys its position of dominance for one reason only: Federal government interference. You can't honestly fault the ethanol industry for accepting a morsel of crumbs from the same hand that nourished the oil industry for more than 150 years, right up to today. This was the subject of the thesis that Rob Bradley, Jr. requested from me and then published on his MasterResource online blog (Ethanol’s Lost Decades: Could We Have Had a Biofuel World?).

If Robert Rapier wants the ethanol industry to act mature and grown up, shouldn't the suggested role model (the oil industry) be worthy of emulation? At this point in time, shouldn't the oil industry be free from all governments supports and be standing on its own?

Refiners object to being "forced" to blend ethanol into gasoline, and being penalized if they don't, for just one reason: the loss of profit. Refiners have long had to blend various additives into gasoline, they know how to do it. They used to blend in tetraethyl lead, then they blended in ethylene bromide, then they blended in other anti-corrosion chemicals and detergents, and then MTBE; so there's no big deal to blending in ethanol. Robert says that the cost to the refiners was a transfer of wealth to the ethanol industry. Even if this was true we all have to remember that this "transfer of wealth" was due to the oil industry's theft of the public's health through the use of the poisonous fuels. For years the oil industry hid the truth about the health risks, just as the Tobacco Industry did. They lied to America and to the world.

In any event, the $.45 per gallon subsidy that Robert refers to didn't go to the farmers or the ethanol industry, it primarily went to the oil/gasoline blenders to make up for having to use 10% of someone else's product. This is the so-called transfer of wealth. So, you see, any animosity felt by refiners for just doing what they have done for many decades (blending ingredients to make this stuff called gasoline), is nonsense because they were compensated.

The effort to end the "blenders tax credit," led by oil industry champion Senator Tom Coburn, backfired on the oil industry. They had assumed that by removing the tax credit that the cost of ethanol-gasoline blends, which were lower priced than ethanol-free gasoline, would increase and make consumers angry. The angry consumers would then scream at their elected representatives to change the law, and the oil industry would be able to add some other crap derived from crude oil. The removal of the blender's tax credit wound up having no effect on the retail price of ethanol-gasoline blends, which remained lower priced than E0. So, it's not accurate to say that the ethanol industry lost the "main federal subsidy," and by implication lost millions or billions of dollars; the oil industry lost that money. They cut their nose to spite their faces, as the old saying goes.

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The oil industry hasn't been an open and free market since around the American Civil War. Oil companies have used their muscle to keep competitive fuel products out of service stations, even when they don't own specific stations. The RFS didn't, and doesn't force customers to use ethanol, it requires the use of any renewable fuel to extend the available supply of fuel. The oil industry had their chance to give us another oxygenate to replace tetraethyl lead, and they gave us another poison, MTBE. The oil industry could use higher concentrations of aromatics to replace ethanol, but it would cost much more and it would multiply the amount of poisons thrown into the air. So the choice...THE CHOICE...is ethanol.

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So now we have just 30 million people were killed in the 20th century from oil related wars. Comparatively, how many people died in wars over ethanol rights and distribution? I don't know of any. We have 30 million deaths on one side, and 0 deaths on the other. Isn't this enough reason to advocate for more ethanol use?

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Saudi Arabia was a very poor country up until American oil men and politicians made them very rich. The Saudi family was promised national protection, and other subsidies...all the things that Robert finds wrong with what he says in his last editorial is the ethanol industry's "Entitlement Mentality."

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Moreover, Robert's description of Saudi Arabia exportation of crude oil implies that the Saudis only export the amount left over after the Saudis satiate themselves with the oil they produce. This is not a correct depiction. The great majority of oil produced in Saudi Arabia each day gets exported. They use what they don't export.

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I always tell them that ethanol doesn't damage engines; it cleans engines, adds power to combustion, and helps to remove water that forms in engines because of condensation.

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Second, because every single aftermarket liquid additive that claims to safely clean engines and remove water contains some type of alcohol.₂ And since ethanol is more compatible with rubbers, plastics, and metals (less corrosive) than other alcohols, it means that ethanol can't possibly be the primary cause of any type of engine damage (ethanol is also more compatible than gasoline and aromatics with various types of materials).

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In the years prior to the First World War and Prohibition, dozens of newspaper articles throughout America and the world promoted "farm alcohol fuel" as being the fuel of the future, and none raised the alarm that ethanol damaged engines.

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In many instances, the only thing stopping any non-flex fuel car and light truck from using E85 is that the "Check Engine" light will illuminate. This can be cured by uploading new on-board computer software, or installing a simple E85 conversion kit, or just ignoring the light.

But for the ethanol industry to efficiently and economically use the Dairy Industry business model something has to change. That something is the spread of true information about ethanol, and the elimination of the junk lies propagated by the Anti Ethanol Industry...admittedly a daunting task, but it is made somewhat less difficult by being able to rely on common sense, true information, and not having to invent new lies on a regular basis.

Robert Rapier warns:

"the U.S. ethanol industry has never been consistently profitable;" "that farm bankruptcies are steadily rising;" "that if the ethanol mandate was suddenly removed, the ethanol industry would collapse...(forcing the ethanol industry) into a perpetual cycle of lobbying to ensure that the federal government keeps them in business."

Earlier in this paper, I wrote that Robert's comments are "intellectually dishonest." To the warning just above I slightly amend what I wrote. I say that this warning is intellectually bankrupt - I changed the word "dishonest" to "bankrupt" for a specific reason. Through his warning, Robert implies that the oil industry has been consistently profitable; as if oil industry entities have been immune to financial downturns; as if the oil industry has not had to rely on a perpetual cycle of government largesse to survive.

Talk about "bankruptcies," take a look at these stories published online:

The 15 Biggest Oil Bankruptcies (So Far) - this was published in May 2016, just 4 months into the year

Haynes & Boone Oil Bankruptcy Monitor - this study was released at the end of 2016 and showed there were 114 North American oil and gas producer bankruptcies

The oil bust forced more than 330 North American energy companies into bankruptcy, report says - this report was published in April 2018

Energy bankruptcies back on the rise in 2019 - this report was published about 10 days ago

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Imagine what would happen to the oil industry if all government subsidies and the free use of the U.S. military were suddenly withdrawn.

Imagine what would happen if the federal government suddenly came to its senses and mandated "No more benzene in the air, no more any aromatics in the air." Remember, the government mandated the end to analog television, they could mandate the end of gasoline and petroleum diesel if they wanted.

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Robert's fourth editorial concludes with:

"It is time to get the federal government out of this business."

This is a platitude; it's too late. You can't stop a horse race in the final turn because a challenger is making a move on the leader. The leader is the leader - in the case of the energy industry - because it was permitted to start the race half way around the track. Provide the ethanol industry with equal subsidies and open availability to the marketplace, make the competition fair and prohibit the lies, then kick out the Feds. I say all this as an avowed conservative free-market capitalist.

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Gasoline is poison. Petroleum diesel fuel is poison. Aromatics (that nice sounding word that includes some of the foulest things on planet Earth) are poison. The debate about these things being poison is over, it's been over for a long time. There is no reason to continue using these poisons, there is no societal benefit. We can make abundant quantities of fuels that are not poisonous - or at the least much less hazardous. There is no excuse for allowing refinery exemptions. If there is an industry that deserves to be pushed into bankruptcy it is the petroleum oil industry. If there are people in the petroleum industry who like being in the "energy" business, and want to be in the business of producing a fuel that is not poison...a fuel that does not push us into wars...a fuel that does not give away our economic freedom, then they should get into the ethanol industry and compete fairly. It's interesting to note that BP has recently enlarged their involvement in ethanol production in Brazil; and despite any complaints about Valero suffering from RFS regulations, they've recently increased their ethanol capabilities here in America.

(I sure hope that all these refinery exemptions are not just an attempt by oil companies to manipulate the financial markets, drive down the value of distilleries, and then swoop in to buy them at bargain-basement prices)

In conclusion, I'll repeat what I've written and said elsewhere: Brazil's mandated use of E27 (and their forthcoming move to E40) proves that all ICE vehicles and equipment can safely and efficiently use more ethanol than we are using in America, and more than the amount used in Canada, Europe, and Asia/Australia/NZ. The long history of ethanol-gasoline blends in Great Britain also proves that all ICE vehicles (land, sea, and water) can use blends higher than E10 and E15. And the tests conducted by the EPA about ten years ago not only proved that E15 was safe to use, they tested E20 and concluded that E20 performed the same as E15. Until and unless congress changes the RFS, the EPA should not be issuing any refinery exemptions.

I would rather my fuel money go to American farmers than to a foreign dominated industry that makes and sells poison.

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₁ Forbes has published anti-ethanol articles written by James Conca, Michael Lynch, Henry I. Miller, and Steve Salzberg

₂ SEE: Famous Manufacturer of Anti-Ethanol Additives Proves Ethanol's Safety and Benefits

₃ SEE: The Ford Model T Car, page 156 READ MORE

₄ SEE: The Hypocrisy of Big Oil

Excerpt from The Auto Channel: For 100 years (give or take), the American public has been bombarded by the oil industry with warnings about the dangers of using alcohol fuel (ethanol). Simple statements like "ethanol damages engines" have become axiomatic. An ethanol advocate can't reply with just a simple 3-word "no, it doesn't." An explanation is required...more information is needed.

To the vast majority of people who hear about the ethanol versus gasoline issue they will immediately think "ethanol, who needs it, ethanol damages engines." But this isn't the truth. Ethanol does not damage engines, ethanol cleans engines. It is gasoline and petroleum diesel that damages engines. This is a paradigm shift in most people's thinking, so it requires explanation and substantiation. I'm happy that Robert chose not to address this point except by seeking asylum in the straw-man-shelter-ruse. By doing so he concedes the validity of my statements regarding this specific issue. Most people have no knowledge of the history of engine fuels. Many people in the ethanol industry have no knowledge of this history; and if there is a sizeable number of people in the ethanol industry who are unaware of the history, then you can imagine how few people in the oil industry have any idea of the true history of engine fuels, and (of course) they have no incentive to want to learn it.

To Robert's claim that the only reason I publicize facts regarding the danger of petroleum oil fuels is to make an emotional appeal, I say you're damn right it is! As often as I can, I try to remind/inform people of the millions of lives that have been lost because of petroleum oil. Every time I do a live speaking engagement, I present an update to the number of consecutive days that have gone by since the 1973 Oil Crisis in which no American service man or women has been killed defending ethanol (that number, by the way now stands at 16,735 consecutive days). Conversely, American casualties defending the oil industry are never more than a few days between incidents. EMOTIONAL, YOU BET!

Is it diversionary to tell people salient details as to why something exists? I don't believe so.

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In my original rebuttal on August 24th, I wrote "The petroleum oil industry enjoys its position of dominance for one reason only: Federal government interference." Robert disagreed and responded with "It’s because it (oil) was cheap, abundant, and had high energy density. That’s why the greenest countries in the world continue to rely on oil -- not because there is a powerful oil lobby in all of these countries."

Well, "cheap" (as it relates to cost) is a relative thing - something can be cheap compared to one thing, but more expensive than something else. Kerosene (the first petro-fuel that was compared to alcohol) became cheaper than alcohol because of a huge tax that was placed on alcohol to increase government revenue to pay for the Civil War - kerosene was not cheaper because it cost more to produce alcohol, not cheaper because alcohol was less cost efficient as a burning fluid to light a room, not cheaper because it alcohol could only be obtained at the loss of human lives...but because of an enormous sin tax that was placed on alcohol. The sin tax was levied by the government. The government "interfered" with the normal marketing of alcohol. They government tipped the scales in favor of petroleum oil...hell, they didn't just tip the scales, they turned the entire equation on its head. There was no comparable tax placed on kerosene production. Hence, the petroleum oil industry enjoyed kerosene's dominance over ethanol because of Federal government interference.

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Although Henry Ford powered his first automobile on an alcohol-turpentine blend, other early inventors admittedly used gasoline because of the lower price. However, in European countries, where a usurious tax was not placed on alcohol production (or where equal taxes were placed on alcohol and petroleum fuels), ethanol enjoyed at least equal acceptance to kerosene and gasoline.

As for the second part of Robert's "cheap" retort, oil wasn't abundant everywhere (Germany, France, Great Britain, Spain, Italy, Sweden - the European car manufacturing countries - had no petroleum oil at that time), and the issue of energy density was irrelevant. Alcohol was known to provide greater power in any internal combustion engine (early gasoline was around 50 octane), and engines could just as easily be manufactured to optimize ethanol as gasoline - something that is also true today.

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In a reverse argument for Robert's business model plan to make ethanol the dominant fuel in just specific parts of America (I'll get into this in greater detail shortly), perhaps gasoline today should only be sold in those areas where there are oil wells and refineries?

In estimating the role that the "oil lobby" played in government actions and decisions, we don't have to look any further than the relationships that Rockefeller and Standard Oil, and Deterding and Royal Dutch Shell had with Imperial Germany, Britain, Nazi Germany, and Lenin's Russia. Then we don't have to look any further than the Teapot Dome Scandal in the U.S., along with Rockefeller's involvement with the passage of Prohibition, and all the campaign donations given to individual American politicians from the oil industry.

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Moreover, in line with my calculations on the number of American service men and women who were killed defending oil, I'd say that the number of wars we fought during the 20th century proves the power of the oil industry to influence and control government decisions.

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The key to Robert's statement here is that ethanol is not utterly dependent on petroleum. Any fuel needed to run the farm equipment can easily be ethanol or biodiesel. Fertilizer doesn't have to be made from petroleum by-products, it can come from corn remnants itself or from any other remnant of the base material used to make ethanol.

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The ethanol industry is a victim NOW, today. The big concern is that entitlements that were part and parcel of the RFS and other government sanctions that enabled ethanol fuel to be sold at fueling stations around the country are being interfered with, by the government...again.

The purpose of my history lessons isn't to say that ethanol should be the dominant engine fuel today because gasoline was poison 140 years ago. I say ethanol should be the dominant engine fuel today because gasoline is still poison, the difference is that now we know it is poison. Ethanol didn't suddenly become a cleaner, safer, more powerful fuel than gasoline; it always was. Gasoline didn't become a cleaner, safer, more powerful fuel than ethanol since removing TEL and MTBE and therefore deserves government help in remaining the dominant fuel. It was poison 140 years ago, it is poison today. However, if one would argue that gasoline today is better than the gasoline of 100 years ago - or 50 years ago - the reason for the improvement is that it now contains ethanol instead of tetraethyl lead, ethylene bromide, or methyl-tert-butyl-ether.

Robert suggests that instead of relying on entitlements that the ethanol industry should take control of its own destiny. Saying this is as much of a joke today as it would have been in 1921, during Prohibition. For the ethanol industry to begin to take control of its own destiny it would require all government agencies to immediately remove all restrictions on the use of ethanol as a fuel, including the requirement to denaturize ethanol. It would require the removal of all restrictions on pumps at fueling stations. It would require the honest acknowledgement by all government authorities that ethanol is not any more harmful to engines than gasoline and diesel, in fact that it is less harmful. It would require government action to prevent the oil companies from exerting any influence whatsoever on the fuels sold by filling stations. The ethanol industry could announce that E50 will be available, and that it is available for all vehicles, and that all auto manufacturers will honor the vehicle warranties, but without the government removing restrictions and/or enacting the appropriate legislation the ethanol industry can not take control of their own destiny.

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I think a much more practical plan would be the plan I published in the summer of 2008. Here's the take away:

• Continue to produce petroleum oil fuels and products required to serve out the life of existing engines.

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So here we are, at the end of five Forbes editorials, plus one more to reply to my rebuttal to the five editorials, and he has offered no damning evidence against the use of ethanol. There's merely difference of opinion related to implementation.

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Ethanol is the clean fuel for internal combustion engines; it is the safe and healthier fuel; it is the domestic fuel; it is the fuel of the future and the future is now. READ MORE

Excerpt from Forbes: Following my recent series of ethanol articles, the most substantive reply came from Douglas A. Durante, who is the Executive Director of the Clean Fuels Development Coalition, a pro-ethanol advocacy group.

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In this first installment, we discuss the origins of the Renewable Fuel Standard (RFS), and debate whether a different approach is needed (my position). In Part 2, we will discuss Doug’s contention that EPA has engaged in an ongoing battle that has hurt the ethanol industry.

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The RFS is a necessity until the Environmental Protection Agency (EPA) stops their 30-year vendetta against ethanol and allows ethanol to compete. Using oil company engineers to put a thumb on the scale when measuring ethanol's emissions is not a fair fight and the revolving door of oil interests in and out of EPA has made it impossible for ethanol to compete."

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Robert: Well, the core of my proposal is to get the federal government entirely out of this business and shift market control to the states where ethanol enjoys more political power. That would make EPA largely irrelevant when it comes to growing ethanol markets. Certainly, EPA will continue to regulate emissions across the country, and in some cases oil refiners may find that the only way they can meet those emissions is to blend ethanol.

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We passed an RFS –twice, because it was so successful the first time—to meet multiple public policy objectives. For starters although it was finalized in energy legislation, it was an amendment to the Clean Air Act to remove the oxygen requirement in reformulated gasoline used in the nation’s largest cities to control ozone.

But it did not relieve the petroleum industry from what Congress deemed was the need to diversify their slate of products by using renewables. Ethanol is a source of oxygen to facilitate complete combustion while providing non-toxic octane, diluting sulfur, and providing other benefits. Secondly, we were headed towards 60% oil imports at the time with a massive transfer of wealth out of the US and vulnerable to the slightest blip in world markets. Third was the need to increase demand for agricultural products and provide a stimulus to the rural economy.

I just don’t understand how people can suggest these are not national goals that benefit the entire country. To get national benefits you need national policies and the RFS was the solution to a lot of problems, and still is. READ MORE

Excerpt from Forbes Is EPA At War With The Ethanol Industry?: Today, in Part 2, we discuss Doug’s argument that EPA has engaged in an ongoing battle that has hurt the ethanol industry.

Doug: Your notion of flex fuel vehicles (FFVs) and E85 [RR: A blend of 85% ethanol and 15% gasoline] is not the answer, although it could be part of the answer. E85 is the lowest value of ethanol, it should be used in 20-30% blends to maximize its octane and displace toxics."

Robert: Why is E85 the lowest value of ethanol? If E85 was consistently cheaper than gasoline or E10 based on dollars per mile driven, wouldn’t it become a much more valuable (and much bigger) market?

Doug: It’s a technical reality that despite ethanol’s many advantages like octane, it has less BTUs and FFVs will get less mileage. So, it must be priced accordingly. When it is, it works. But ethanol price tracks gasoline and there are certain price points where E85 can’t sell. With $3 gasoline for example, that could be a $0.60/gallon discount. Why would you want to sell at that price when you can replace toxic additives like toluene at $3? And sure, you can show me E85 sales in California but that is due to the very government intervention you oppose due to the low carbon credits the state issues. If it works in that particular application, then great.

EPA has phased out any incentives for automakers to make FFVs, so that is simply not practical to go that route nationwide. As noted, it can be part of the answer but with 20 million FFVs on the road and 260 million conventional vehicles, it has flat-lined.

Automakers don’t like FFVs, they say they are not going to make them, and have done little to promote them or increase availability. I know, we had a FFV Awareness Campaign for years and gave up when we opened a station in D.C. and none of the local Chevy dealers had a FFV to bring to the event. Try going to a dealer and ask for a FlexFuel Vehicle -- they do not know what you are talking about. They used to put yellow gas caps on FFVs to help inform consumers they had this option and then got rid of them too.

So look at it from an ethanol standpoint: I have a low-cost, low-carbon product that will increase octane, which will allow automakers to increase compression and get much better mileage, allowing them to cost effectively meet ever increasing fuel economy/greenhouse gas (ghg) requirements and I can go head to head with my competition which is anything coming out of the oil barrel. I replace the most carbon intensive, harmful parts of gasoline at a better price. Now that’s a high value market."

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EPA says E15 is gasoline but E20, 30, etc. is not? I think we will get into the details later but if we had full access to the market through regulatory relief, mandates wouldn’t be needed."

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Doug: I am not aware of much in the way of state incentives to boost E85 (other than California’s carbon credits), but if all cars were allowed to run on any blend of ethanol you wouldn’t need any. After decades doing this, I am absolutely convinced that this is not a question of chicken or egg when it comes to E85 and FFVs -- the cars simply have to come first. If cars are approved to run on a fuel—any fuel—then the fuel will follow.

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Robert: ... I have had plenty of people tell me that they use E30 in their vehicles. You seem to imply that this is illegal. Could you clarify? I am arguing for state-level incentives to make this a bigger market.

Doug: Quite the contrary, we argue that since ethanol is part of what we would call the base fuel in the U.S., defined by the fact that E10 is the certification fuel for emissions and mileage, it should be clarified that it is legal. The issue is now the legality of dispensing it. Yes, before the autos completely turned away from FFVs, blender pumps seemed to be the answer to allow for regional economics, FFV availability, state incentives, etc. and they still are. Blends of E30 show little if any mileage loss and are a high octane, economic force that checks all the boxes. Even DOE has acknowledged E30 as an optimum blend.

The new problem we face, and another example of how EPA is littering the pathway with sand, mud, potholes and land mines is the recent rule allowing E15 in which EPA has defined a blender pump dispensing anything other than E15 or E85 as a fuel manufacturer and subject to the same regulations as a refinery. Since they have only approved volumes of 15% or 85%, anything else would be illegal."

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And while I suppose you are right in that we are fighting for the status quo, when the federal government says we have a program that guarantees a home for 15 billion gallons of corn ethanol for example, industry uses its own money and builds that much capacity, but then the same government cuts that market with the waivers, that is a clear example of moving the goalposts.

But when you talk about E30, now we are getting somewhere. E30 would be a 200% increase over E10, making RINS so cheap you’d never hear about RIN Prices again. States should be allowed to sell such a fuel, retailers should be allowed to sell it, and automakers should warrant their cars for it. Again, EPA is keeping all that from happening and with true regulatory relief could make the RFS irrelevant."

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Doug: Ok, point taken, so let’s come back to the regulatory barriers. We already talked about the barrier of EPA eliminating vehicle incentives to OEMs that cost taxpayers nothing. Next is the E15 vapor pressure rule which was granted because 15% ethanol was deemed to be “substantially similar” to 10% ethanol, and in fact has lower vapor pressure. It is a linear downward path that with volume eliminates the very evaporative emissions the controls were put in place for. But EPA did not extend the waiver to anything above E15, keeping intact a regulatory barrier that will make it extremely difficult to gain approval for higher blends. It only took 10 years to get year-round E15!

Then they threw in the provision that a blender pump is now a refinery and the pumps are fuel manufacturers. Another regulatory barrier is EPA’s outdated and extremely harmful emissions modeling that states are required to use and incorrectly attributes higher emissions to ethanol rather than aromatic compounds in laboratory tests that even automakers say are not realistic.

EPA has failed to regulate toxics as required under the clean air act which would reduce aromatic compounds used for octane and allow—not require—ethanol to compete IF they removed the volume limitations.

Permeating all of this is EPA’s woefully inaccurate and outdated life-cycle modeling that assumes a negative carbon footprint for corn ethanol when every other reputable model shows a huge gain in carbon benefits. The Departments of Energy and Agriculture have much more expertise in this field, yet EPA has kept this barrier in place. The list goes on—labeling, reporting, paperwork— everything the President told his agencies to do in terms of eliminating barriers and opening markets. READ MORE