U.S. Biofuels & Ethanol Mandate: More Vulnerable Than Ever Now?

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Big square baler harvesting wheat straw for production of cellulosic ethanol

Big square baler harvesting wheat straw for production of cellulosic ethanol

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Since 2007, U.S. fuel producers have been required by law to include more and more ethanol and other biofuels in their blends.

Now, Pike Research suggests, the biofuels mandate enacted as part of the 2007 U.S. Energy Act may be vulnerable to renewed political pressure.

Pike notes that the drawbacks of conventionally produced biofuels--based on corn in the U.S. and rapeseed in Europe--are becoming more apparent at the same time that anticipated production of advanced biofuels has failed to materialize.

"Wish" not science

In January, a Federal appeals court tossed out the EPA's "cellulosic" ethanol requirement, saying it was based on a "wish" rather than factors fuel refiners could actually control.

The EPA had upheld its mandate last November despite a request from several parties that it be suspended.

So-called ellulosic biofuel is made from wood chips or the inedible parts of plants, including corncobs. In 2011, refiners had been required to blend 6.6 million gallons into gasoline and diesel vehicle fuels--although none was available on the market--and the 2012 quota rose to 8.65 million gallons.

Producers and refiners of fuels had already failed to meet the 2011 mandate--and paid $7 million in fines--due to lack of supplies.

Banning E15?

Now two bills recently introduced into Congress seek to delay or ban altogether the sale of E15 gasoline, which contains 15 percent ethanol rather than the 10-percent maximum standard since 1978.

As Hemmings Motor News noted last week, House Bill 875 requires that sales of E15 be suspended for at least 18 months while more testing is done of its effects on older cars and the large variety of small combustion engines that were never designed to accommodate that fuel.

Senate Bill 344 simply suspends the sale of E15 gasoline altogether.

The Renewable Fuel Standard (RFS) that carries out provisions of the 2007 Energy Independence and Security Act passed by Congress mandates that 36 billion gallons of ethanol to be used to fuel U.S. by 2022. That's more than three times the 11.1 billion gallons that were used in 2010.

But in December 2011, in the first sign of waning support for ethanol--long a main plank of the agriculture lobby--Congress ended subsidies for ethanol production that had been in place since 1980, along with import tariffs on imported ethanol.

The decline in support for ethanol, including the fight against E15, may signal a sea change in the political winds for the gasoline additive.

2012 Volkswagen Passat TDI test car running on Solazyme algae-derived diesel fuel

2012 Volkswagen Passat TDI test car running on Solazyme algae-derived diesel fuel

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Biodiesel ascendant?

On the other hand, tests are now underway on sustainable diesel fuel--which is, admittedly, at a much earlier stage than the millions of gallons of ethanol being produced at  multiple operating U.S. refineries today.

Those include tests of algae-based biodiesel in Volkswagen TDI diesel cars, and the first commercial jet route using biofuel on a regular basis.

What do you think?

Is this just a tempest in a teapot: political posturing that won't end up affecting the slow rollout of E15 and other biofuels?

Or are we heading toward a tipping point where the mandates that specify increasing volumes of biofuels to be blended into our national fuel supply might actually fall?

Leave us your thoughts in the Comments below.

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