Advanced BioFuels USA

by Jim Lane (Biofuels Digest)  E-Zero – ethanol-free gas, has been popular with boaters, but here comes isobutanol, with Gevo leading the pack.  Are the economics a slam-dunk? Here’s the hard data.

One of the more interesting trends in recent years has been the rise of ethanol-free gasoline.

Overall, Pure-gas.com reports 9915 stations offering ethanol-free gas in the US and Canada — although it is a crowd-sourced site and may have missed stations adding or dropping E0 fuels. The site does not include stations in Alaska because “all gasoline is ethanol-free.” 314 of those are in Canada.

That’s around three times the number of stations offering high-ethanol blends such as E85, despite the inducements that emerge under the Renewable Fuel Standard for high-ethanol blends, especially as the US reaches the E10 saturation point and RIN prices rise, as they are designed to do to provide “blend-wall busting” incentives.

In many cases, customers are looking for ethanol free gasoline for a “boat, truck, RV, plane, farm equipment, snowblower, hotrod or motorcycle”, based on concerns over corrosion, engine wear, and performance of E10 in boat engines and outdoor power equipment.

Isobutanol makes a move

In that context, along comes news this week that Harbor Marina, at Lake Pomme de Terre in Missouri, has become the first U.S. marina to sell gasoline blended with Gevo’s renewable isobutanol at the pump. Harbor Marina owner Todd Spencer said he made the decision to offer isobutanol-blended gasoline to his recreational boating customers once he concluded that it would be a superior renewable fuel for their boats.

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Perhaps the most fascinating stat in this growing market is the pricing. E85prices.com reports the national E85 price average at $1.93,  E10 at $2.30, and E0 averaging $2.88. Looking at E10 and E0, we don’t know yet whether that E0 price would be available for an (ethanol-free) isobutanol blend with gasoline, but it could be a substantial premium market for isobutanol.

A price case for $5.00 per gallon isobutanol

For example, a $5.00 per gallon (wholesale) isobutanol fuel blended at 12.5 percent adds 47.8 cents to the hard cost of a gallon of fuel, compared to using $1.468 ethanol (today’s CBOT September ethanol futures contract price). At the same time, there’s a 5.6 cent gain in the RIN value in the fuel (slightly higher blend, higher RIN value for advanced biofuels and more energy density). So, you net out with a $0.42 premium in this scenario — or $2.72 for B12.5. That’s less than the $2.88 average for E0.

In a nutshell, you have the answer to the age-old question in renewables: why sell a $2 fuel when you can sell a $5 chemical? Answer, sell a $5 fuel, and be happy that you don’t have to meet the exacting green chemistry performance spec.

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TruFuel is selling at chainsawsdirect.com for $27.95 today, per 1.5 gallon pack, or $18.63 per gallon, and ChainSawsDirect will tell you straight out the rationale: Ethanol Free, High Octane fuel. There are other benefits in lubricity, such as the blend with synthetic oil, and there’s the 2-year shelf-life from gas in a can. But we see right away in the marketing pitch that there’s a perceived advantage for ethanol-free fuel in this sector.    READ MORE