Advanced BioFuels USA

by Aaron Smith and Vincent Smith (Investor’s Business Daily)  … The most immediate impact of the RFS wars is to focus attention on corn ethanol and petroleum gasoline at the detriment of second-generation biofuels. These fuels — produced from the inedible parts of plants with much lower greenhouse gas emissions than corn ethanol — can also be blended with gasoline. Adding them to the fuel mix would lessen transportation-caused emissions considerably because they emit vastly less carbon than corn ethanol or petroleum gasoline.

While commercialization of second-generation biofuel has been very slow up to now, with only negligible volumes produced in 2017, recent innovations by American companies provide some hope. Today, several firms are producing cellulosic ethanol from corn kernel fiber, which would otherwise not be used productively.

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The core issue in the RFS wars is the total number of gallons of biofuel (a number determined by the RFS) that has to be used yearly. The economics of gasoline supply depend on the rate at which ethanol is blended into gasoline. Getting a certain number of gallons of ethanol into a shrinking gasoline pool requires that ethanol be a higher percentage of the fuel blend. Increasing the blend rate above the current 10% requires costly investments that the fuel industry has so far refused to make.

At the moment, EPA, which administers the RFS, is mediating the RFS wars using giveaways to Big Oil and Big Corn.

To Big Oil, EPA has secretly given compliance exemptions from using ethanol to several large and profitable firms that own small refineries. While EPA has the authority to exempt small refineries that suffer “disproportionate economic hardship” from complying with the statute, it has not demonstrated such hardship in these cases. Continuing these covert exemptions would be a back-door way to reduce the RFS mandate, and a reading of the law suggests it would be illegal.

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Congress could end the RFS wars by reforming the RFS and setting the gasoline blend rate. This would provide stability to the fuel industry, as firms would be able to determine the needed investments to meet the standard. In so doing, Congress could also provide production incentives for second-generation biofuels.

Whether gasoline use declines by more or less than what the Department of Energy projects, there will be still large demand for gasoline for the foreseeable future. All of us will suffer if we miss the chance to develop a viable second-generation biofuel supply because of political giveaways.   READ MORE

Norbert Brauer: Stand up for Illinois biofuels (Effingham Daily News)