15% Ethanol Gasoline May Be in Stations by the End of 2012

Readers, here is an article I wrote recently about the upcoming 15% ethanol gas.  The very first station to start selling "E-15" opened in Kansas about a month ago.  There are some very serious issues with this new gas.  This article will be on my new, re-designed website which we hope to launch before the end of August.

Here's the article to give you a "heads up":

"Pete"
====================================================

15% Ethanol Gasoline May Be in Stations by the End of 2012              By Pete Landry – July 15, 2012

Readers of my website (PeteLandrysRealGas.com) may recall I wrote an article in 2011 about Growth Energy, a lobby group for a large group of ethanol manufacturing plants in the Midwest petitioned the US Environmental Protection Agency (EPA) in early 2009 to increase the ethanol content of motor fuels from the current 10% maximum to 15%, a 50% increase (see the website’s “Ethanol Articles” page for original article titled: “15% Ethanol Gasoline – A Potential Crisis Developing”).  The EPA allowed input into this proposal and were inundated with replies, almost all negative.  Despite the response, the EPA began testing vehicles with 15% ethanol.  In December, 2010, the EPA issued “conditional approval” for the use of 15% ethanol gasoline (E-15) in 2007 and newer cars and light trucks.  Then, in January, 2011, they extended the approval to use this new gasoline in 2001 thru 2006 cars and light trucks, despite lawsuits against the EPA from over eight different groups.  The biggest concern expressed by litigants was the potential for “misfueling”, or using this gasoline in equipment which was not designed to operate with this fuel. 

In the EPA’s approval of this new fuel, they made the following statement on their website:

What Vehicles and Engines MAY NOT USE E-15 ?

• All motorcycles.

• All vehicles with heavy-duty engines, such as school buses, transit buses, and delivery trucks.

• All off-road vehicles, such as boats and snowmobiles (includes four wheelers and jet skis).

• All engines in off-road equipment, such as lawnmowers (all lawn and garden tools) and chain saws.

• All 2000 model-year and older cars (and light trucks).

   (Gasoline powered home generators cannot operate on E-15 gasoline either)

The EPA has now completed all regulatory requirements necessary to authorize retailers to sell this new fuel.  Ethanol plants have registered to become authorized to sell the ethanol to blenders.  It is expected that E-15 may start showing up in retail stations in Louisiana before the end of 2012.  It is most likely this new fuel will be sold in major, branded stations (Exxon/Mobil, Shell, Chevron, etc).  Independent gas stations, grocery and convenience store have expressed serious concerns about the liability associated with selling this fuel when a customer’s equipment is damaged, exposing them to lawsuits.  The EPA indicates that it is VOLUNTARY, NOT MANDATORY for stations to sell this new fuel.  Retailers are CAUTIONED NOT to let their gas supplier force them into selling this fuel against their will.  Also, many grocery and convenience stores may have older underground storage tanks and pumps which may not be compatible with E-15.   

In my continued research of E-15, I have learned that despite EPA’s claim that this new fuel is safe to use in all 2001 and newer passenger cars and light trucks, ALL automobile manufacturers, domestic and foreign alike, warn owners of 2001 and newer passenger cars and light trucks NOT to use gasoline with greater than 10% ethanol and further say that any damage caused by the use of gas with greater than 10% ethanol will void the vehicle warranty!  E-15 should NEVER be used in vehicles model year 2000 or older as manufacturers warn that engine damage will likely occur.  So, PLEASE read your owners manual carefully before considering putting this fuel in your 2001 or newer car or light truck, despite the EPA claim that it is safe.  The ONLY vehicles which may use E-15 without the risk of damage are “Flex” vehicles, which are designed to tolerate all concentrations of ethanol, up to and including E-85 (85% ethanol/15% gasoline). 

I am very concerned that despite pump label warnings, some consumers may be tempted to try this new fuel in equipment for which it is NOT designed.  It will likely be priced about $0.10 -  0.15/gallon lower than E-10.  But, don’t fall for the cheaper price temptation.  As a reminder, here is the EPA approved label which EPA requires to appear on all pumps which will be selling 15% ethanol gasoline:

    
In addition to 2000 and older model passenger cars and light trucks, this E-15 fuel is also NOT COMPATIBLE with marine engines, motorcycles, four wheelers, jet skis, chain saws, all gas powered lawn and garden tools, gas powered home generators and all gasoline powered heavy duty engines like school buses, transit buses and delivery trucks.  Use of E-15 in these engines may destroy the engines according to almost all manufacturers and warranties will NOT cover damages. 
SO, when you pull up to a gas station and see the above new “E15” label on the pump, the old saying of  “BUYER BEWARE” applies………use at your own risk!  Use of this fuel in equipment it is not designed for may be very costly and the buyer may not have any recourse for damages that may result!

HAVE A GREAT MONDAY READERS!

Do hope everyone has had a great weekend!  Was GREAT to see the Saints back in action in a pretty good game in Canton tonight.

Here's yet another article on the issue of the ethanol mandate........

"Pete"
=============================================


Our View: It's time for ethanol mandate to go
Corn prices affect most sectors of our national and local economy
Aug. 5, 2012  |  
The recent upward motion in gas prices is not entirely the fault of the petroleum industry. It's partly because of the drought that's plaguing much of our country this summer. That's right, it's related to agriculture -- specifically, the nation's corn crop.
That's because since 2005, the federal government has mandated that 40 percent of the American corn crop must go to ethanol production, for use in the fuel that is pumped into our motor vehicles. Gasoline prices rose 17 cents per gallon in July, the largest increase for July in more than a decade. Ethanol itself rose 17 percent in July, gaining 37.9 cents. Most ethanol is made from corn.
Corn is a commodity in the United States with intrinsic value because it is found in so many places. It's used as food, animal and pet feed, in ethanol (by federal mandate) and, well, it's used in some form in just about anything you can think of --toothpaste, crayons, paint, medications, candies, yogurt, plastics, paper, oil drills, preservatives, detergents and even blue jeans. It's transformed into cornmeal, corn oil, cornstarch and sweeteners that include corn syrup and high-fructose corn syrup. It's fermented for use in whiskey. Even the waste products -- cobs and germ, primarily -- have uses. Cobs are used in livestock feed, as absorbants for oil and other hazardous waste, in insecticides, fertilizers and as grit for tumbling and blasting. Corn germ is used to make stronger industrial glues.
Since 1990, the United States has increased its use of corn-based ethanol by more than 1400 percent, from 349 million bushes in 1990 to 4,900 bushels 2010, according to the Corn Refiners Association.
Under normal circumstances, this is all good news for the U.S. economy. America's corn production eclipses that of any other country in the world; it's more than double that of China, which is the next highest corn-producing nation.
But in 2012, we are experiencing normal circumstances. A severe drought is hitting the nation's corn crop hard, driving price skyward. And that either has or will affect the prices of all those products.
It's contributing to an untimely rise in gas prices, as noted above. It also threatens the poultry industry here on Delmarva, because up to 70 percent of a chicken's diet is corn. And unlike the corner gas station that can raise and lower pump prices as the price of a barrel of oil fluctuates, poultry is sold under contract, making it difficult to account for rising corn prices and remain profitable.
What we have right now is the equivalent of a perfect storm surrounding the price of corn.
The federal government mandates 40 percent of the nation's crop go to ethanol production. But some estimates have 40 percent of the 2012 corn crop already in jeopardy. If that estimate is roughly accurate and ethanol production from corn was halted immediately, the supply of corn for all the other uses listed above would be about the same as in more normal years.
What would this do the nation's automotive fuel supply? There's no definitive answer, but anecdotally, some claim the ethanol blend (10-15 percent of the fuel we pump) reduces gas mileage in most vehicles, even those that are supposed to operate efficiently using the blend. Smaller engines (lawn mowers, recreational boats and more) cannot handle the blend and must use pure gas. If using pure gas increases vehicle mileage by, say, 10-15 percent, we'd be using the same amount of fuel, but without the ethanol additive. So possibly zero effect.
If poultry takes another economic hit because of the corn shortage, it will have a ripple effect across Delmarva that will include lost jobs, higher unemployment and poverty rates, greater personal financial need and more closed businesses.
Poultry companies are asking, therefore, that the federal government grant a temporary exemption from the 40 percent mandate, along with a longer-term solution that would tie the amount of corn earmarked for ethanol production to each year's crop. If the net effect of the exemption is cost-neutral on motor vehicle fuels, a smarter long-term solution might be to scrap the mandate altogether.
The world's food supply --not a government biofuel mandate --should be the top priority. And with an expanding demand worldwide for corn exports, U.S. farmers should be fine with an increasing market demand for their product instead of a government mandate.

NuStar, Eco-Energy planning D.C.-area ethanol transportation facility

Two companies partner to build an ethanol distribution and storage facility to feed ethanol to blenders on the east coast.  I explained earlier this year that ethanol cannot be pumped through existing pipeline networks because it is corrosive.

"Pete"
====================================================


NuStar, Eco-Energy planning D.C.-area ethanol transportation facility
San Antonio Business Journal by James Aldridge, Web Editor
Date: Monday, July 30, 2012, 11:12am CDT                                               
      
NuStar Energy LP and Eco-Energy Holdings Inc. are developing an ethanol unit train and storage facility to serve the Northern Virginia and Washington, D.C., markets.
NuStar and Eco-Energy will jointly build an ethanol unloading, storage and outbound truck loading system at NuStar’s Dumfries, Va., facility. Each company will bear their own development, construction and refurbishment costs. Dumfries is located about 20 miles south of Washington, D.C.


The terminal will have 155,000 barrels of ethanol storage capacity and will be capable of distributing more than 400,000 barrels of ethanol per month. The terminal will be equipped to receive up to 96 rail car units through a connection with CSX Transportation. Operations should commence sometime during the third quarter of 2013.


San Antonio-based NuStar (NYSE: NS) is a publicly traded, limited partnership that owns 8,420 miles of pipeline; 84 terminal and storage facilities; two asphalt refineries and a fuels refinery with a combined throughput capacity of 118,500 barrels per day.
Franklin, Tenn.-based Eco-Energy markets and distributes biofuels. The company has more than $3 billion in sales.

The Coming Food Crisis: Blame Ethanol?

Here's an interesting article from Forbes on what they are predicting is "The Coming Food Crisis"..........many people believe that the severe drought in the corn belt States may in fact lead to a food shortage, in part because ethanol plants get first priority on corn produced, over animal feed and food products..........

PS:  The reason I can't display the full article is that major news medias allow use of only the first 2-3 paragraphs into the article and the link to the full article without having to pay a very large re-use fee.

"Pete"
=================================================


The Coming Food Crisis: Blame Ethanol?

ENERGY – Forbes - William Pentland

A series of spikes in global food prices resulted in riots in 2008 and contributed to violent uprisings in North Africa and the Middle East in 2011. The culprit is a matter of considerable and frequently heated debate, but the most commonly cited candidates include market speculators, global warming and aggressive government renewable fuel mandates.

If you believe the folks at the New England Complex Systems Institute in Cambridge, Mass., the global food supply system is stumbling into a drought-induced supply shortage that could galvanize a global food crisis far more severe than those implicated in the widespread uprisings known as the Arab Spring.

In an updated version of a paper first published in September, Marco Lagi, Yavni Bar-Yam and Yaneer Bar-Yam considered the possible consequences of the prolonged drought in the mid-western United States, the worst in half a century, on global food prices.  The analysis, which relied on a quantitative model of historical food prices, concluded that the drought could amplify the impact of market speculation and corn-to-ethanol conversion policies on the impending global food crisis by an order of magnitude. To

(Read full article here:  http://www.forbes.com/sites/williampentland/2012/07/28/the-coming-food-crisis-blame-ethanol/

The Coming Food Crisis: Blame Ethanol?

Here's an article from Forbes magazine on what they call "The coming Food Crisis"!  And, they may well be correct.........as the weltering heat and drought in the midwest worsens, some farmers are already cutting dead corn stalks as feed for their cattle.  This may get ugly before it's over.  More and more demands are being made for the EPA to stop the ethanol mandate for at least a year......

"Pete"
============================================

The Coming Food Crisis: Blame Ethanol?

ENERGY – Forbes - William Pentland

A series of spikes in global food prices resulted in riots in 2008 and contributed to violent uprisings in North Africa and the Middle East in 2011. The culprit is a matter of considerable and frequently heated debate, but the most commonly cited candidates include market speculators, global warming and aggressive government renewable fuel mandates.

If you believe the folks at the New England Complex Systems Institute in Cambridge, Mass., the global food supply system is stumbling into a drought-induced supply shortage that could galvanize a global food crisis far more severe than those implicated in the widespread uprisings known as the Arab Spring.

In an updated version of a paper first published in September, Marco Lagi, Yavni Bar-Yam and Yaneer Bar-Yam considered the possible consequences of the prolonged drought in the mid-western United States, the worst in half a century, on global food prices.  The analysis, which relied on a quantitative model of historical food prices, concluded that the drought could amplify the impact of market speculation and corn-to-ethanol conversion policies on the impending global food crisis by an order of magnitude. To

(Read full article here:  http://www.forbes.com/sites/williampentland/2012/07/28/the-coming-food-crisis-blame-ethanol/)

MORE PRESSURE TO STOP ETHANOL MANDATE!

Pressure continues to grow from many different sources to get EPA to slow or stop the ethanol mandate due to food shortages and animal feed.  Due to the mandate, ethanol plants get first priority on corn for their plants.  However, with an estimated 40-50% crop loss due to the worst drought in nearly 50 years, more and more groups and Congressmen are pushing to STOP the mandate.  Some want it stopped for the rest of this year and also next year.

"Pete"
====================================




Groups ask for ethanol law break as corn hits record
Bloomberg News
July 30, 2012

Livestock and poultry producers formally asked the Obama administration Monday to suspend the nation’s renewable fuels standard because it is causing “severe economic harm” as corn prices surged to a record.

A coalition including the National Cattlemen’s Beef Association and National Pork Producers Council sent a petition to the Environmental Protection Agency  asking for a waiver “in whole or in substantial part” the output requirements under the Renewable Fuels Standard for 12 months.


(Read full article here:  http://www.ibj.com/groups-ask-for-ethanol-law-change-as-corn-hits-record/PARAMS/article/35816

Ethanol 'One of the Most Hated Industries

Here's a rather interesting article I ran across today.  No doubt, to those of us who have suffered through the damage and cost to equipment by ethanol gas, most who have experienced this would probably agree with the title of this article.

Have a GREAT weekend readers!  Enjoy the Olympics over the upcoming week.

"Pete"
===========================================

Ethanol 'One of the Most Hated Industries': CEO

Published: Friday, 27 Jul 2012 | 3:49 PM E                                                                                                                                                                                                                                                                             By: Jane Wells Correspondent

·         

Ethanol has been held up as a homegrown fuel which creates jobs and replaces foreign oil.

Lately, as corn prices have shot up in what some are calling the worst drought in a half century, there is more criticism than acclaim for ethanol.It's also been criticized as a huge waste of food resources, benefiting corn farmers at the expense of livestock producers, all for a fuel that isn't very clean.

"When you're in one of the most hated industries in the world, it's always interesting and always challenging," says Todd Becker, President and CEO of Green Plains Renewable Energy[GPRE  4.25    0.64  (+17.73%)   ] in Omaha, Nebraska.

The company buys up to 3 percent of the nation's corn supply to make ethanol, an unprofitable business lately due to high corn costs. Green Plains swung to a loss in the second quarter, and on Thursday, it's stock plummeted to a 52-week low, trading below the company's cash value.

"There really is a big need for this fuel," Becker insisted.

The company is getting through the downturn by reducing production 7 percent, sitting on $137 million in cash, and increasing its dependence on its non-ethanol businesses, including leasing out rail cars to help deliver oil from the Bakken Shale. Its goal is to generate enough revenue from these other businesses to cover all debt servicing.

Green Plains has also locked in prices for about 40 percent of the corn it will buy and the ethanol it will sell in the fourth quarter, at a margin Becker believes will return the company to profitability no matter what happens with the other 60 percent.  

But the biggest political issue facing the industry right now is pressure by ethanol critics, especially livestock producers, to reduce the federal government's mandate on how much ethanol must be purchased by gasoline refiners. Proponents say refiners can use past spending splurges on ethanol as credits against this year's purchasing requirements, and exports will also probably be cut. This should leave more corn for everyone else.

However, that may not happen. Becker thinks refiners will still keep buying a lot of ethanol as needed. Why? Many have come to depend on the corn-based fuel's high octane level of 113 to raise overall gasoline octane to 87 and higher.

"What we've seen over the last 18 months is that the refining community has kind of scaled back to an 84 octane subgrade gasoline — which you can't put in your car — because they saw the benefit and the opportunity that they can use ethanol as their blend stock," Becker said. "If you want to replace this octane, you're going to have to buy something much more expensive than ethanol today, and it's not in big supply."

If that's the case, then the fight will be on in earnest between all the users of corn this fall, assuming the worst about the drought. Yet the octane issue shows how the ethanol industry has tried to expand its value proposition in the nation's fuel supply. That's a change from four years ago, when many declared the death of ethanol as corn topped $7 and several producers went bankrupt. Like a zombie, ethanol won't die.

"The industry this time around is much healthier to withstand this. We will see some guys go down, but in general it's a much different experience than '08," Todd Becker said. "We're still in business today, our lights are still on, we're still going to be in business at the end of the year."