"DUMB AND DUMBER"?

We all know how our beloved government does so many "stupid" and costly "blunders", right?  Well, here's another classic example. The EPA's "Ethanol Mandate" requires oil companies to blend a certain percentage of ethanol gas with ethanol made from something other than corn.  The "cellulosic biofuel" mandate requirement can't be met, because THERE ARE NO PLANTS IN EXISTENCE that make cellulosic biofuel.  The EPA even admits that.  The very first "pilot" plant to make this biofuel (from corn stalks, cobs and shucks) is just starting construction to try to prove the technology.  So what does EPA do?  They fine the oil companies for not blending a fuel for which the ethanol is "non existent"!  Make sense?  This is far worse than "Dumb and Dumber"!

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



1:16 PM, July 25, 2012
Big Oil sues over cellulosic ethanol mandate
Oil companies have never liked the federal Renewable Fuels Standard, but they have a special ire for the requirement for the use of non-corn, cellulosic ethanol that is virtually nonexistent.
The American Petroleum Institute, which represents the largest oil companies, filed a lawsuit with the D.C. Circuit Court late Tuesday challenging the Environmental Protection Agency’s mandated use of cellulosic biofuels in the 2011 Renewable Fuel Standard (RFS).
Cellulosic biofuels, made from crop residue or grasses, have been slower to develop than originally hoped and for the last two years the EPA has acknowledged that federal targets for the non corn ethanol have not been met.
In Iowa, two corn stover plants at Emmetsburg and Nevada are scheduled to begin construction this year in time for the 2013 harvest. They will be the first noncorn ethanol plants in what is the nation’s largest ethanol producing state.
“EPA’s unattainable and absurd mandate forces refiners to pay a penalty for failing to use biofuels that don’t even exist,” said API Director of Downstream and Industry Operations Bob Greco. “The mandate is effectively an added tax on gasoline manufacturers that could ultimately burden consumers.”
The Clean Air Act requires EPA to determine the mandated volume of cellulosic biofuels each year at “the projected volume available.” There was no commercial supply of the fuel in 2011, according to EPA’s own records. However, EPA required refiners and importers of gasoline and diesel to use or pay for credits to cover 6.6 million gallons of the nonexistent biofuels.
The Renewable Fuel Standard has become a target by livestock producers as corn prices reached record levels this summer due to the drought, causing fears of shortages and high food prices. A bill introduced this week in the U.S. House of Representatives by Reps. Bob Goodlatte (R-Va.) and Jim Costa (D-Calif.) would cut the RFS by as much as 50 percent if corn surplus stocks fall below certain levels.
Corn surpluses have been at 15-year lows for most of the last two years due both to export demand and the fact that ethanol now consumes about 35 percent of the U.S. corn crop. In Iowa, home of the nation-leading 41 ethanol plants, ethanol consumes about 60 percent of the crop.

End the Ethanol Madness

This is a very good article on the issue of the ethanol mandate.  This whole issue is heightened by the the worst drought in corn belt states in over 50 years.  It is very questionable if there will be enough corn in this years harvest for both gas and food, particularly if the drought lasts much longer.  That is already causing food products made from corn or dependent on corn, such as animal feed, to start sharply increase in price.  I have a hunch this issue will get much uglier before it gets better.  There is growing pressure on Congress to reign in the EPA on their ethanol mandate to ease the pressure on food prices.

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

July 24, 2012
End the Ethanol Madness
By Jeffrey Folks


Economists are warning that the current drought in the Corn Belt is going to result in higher food prices.  That increase will hit consumers hard, reducing discretionary spending and further weakening an already fragile economy.  With every scorching day that passes, the catastrophe mounts.  But, as usual, the president is AWOL.  There's not been one word from Obama about how to address a food crisis that everyone knows is coming.
There have been Midwestern droughts from time immemorial, some of them (like those of the 1930s and 1956) as bad as or worse than present one.  And no one -- not even a president who thinks government should get credit for everyone else's success -- can perform a rain dance and make the drought go away.  But there is one thing the president can do to alleviate the effects of the drought: suspend the nation's ill-conceived ethanol program.


That program now burns up 40% of the U.S. corn crop.  If he had exercised leadership, Obama could already have taken action to suspend ethanol mandates.  That action would have spared 320 million Americans higher food prices this fall and helped to rescue the economy from further decline.  Obama keeps saying he is focusing on jobs like a laser, but now, when he has a chance to actually do something about it, he can't even be located.  He's off in Toledo or Roanoke or dining with Anna Wintour, where he probably was not thinking about food inflation.  He doesn't even seem to know that the American people are hurting -- "the private sector is doing fine."  Yeah, right.


How bad is the damage to America's corn crop?  The situation gets worse every day, but current estimates are that 20% of the crop may be lost.  The price of corn futures is up nearly 50% since the end of May, along with surging prices of soybeans, wheat, and other basic agricultural commodities.
In the face of this, the Obama administration has its head stuck in the sand.  Agriculture Secretary Vilsack refuses to acknowledge any significant impact of the drought on food prices.  If prices are rising, it's the result of "unfair practices," he said.  Or it's the fault of energy prices (which have actually come down 27% from recent highs).  Vilsack has actually offered to perform a "rain dance," if he can come up with one, to alleviate the drought.  That seems to be about all this administration is capable of.


As for the president, he has steadfastly ignored the impending crisis.  He probably figures that in the run-up to the election, voters do not need to be advised that his party's ethanol policies have been responsible for food inflation.  When he is not ignoring the problem, he is lying about it, with his administration refusing to deny that climate change is responsible for the present localized weather conditions.  Yes, George Bush's failure to sign the Kyoto Climate Accord is responsible for the present drought.  Bush caused this year's drought (and those of 1988, 1956, and 1936 as well).  He also caused the global warming of the Medieval Climate Optimum (950-1250 AD) and the frigid temperatures of the Little Ice Age (1350-1850).
The crucial point is that Obama's environmental policies have put the country's food supply at risk.  Anyone with common sense knows that burning 40% of the nation's corn crop (and proposing to burn the entire crop, as increasing mandates would do) to satisfy ethanol mandates is madness.  Yet Obama has consistently supported the ethanol program along with impractical mandates for biofuel and other alternatives.


The risk posed by ethanol mandates was apparent even before the current drought set in.  Corn reserves were low at the beginning of the season, and now they are almost nonexistent.  The administration should have anticipated the possibility of a drought, since droughts are a regular occurrence in the Corn Belt.  Instead, the president was out there raising money from environmental donors at George Clooney's home, a thousand miles away from reality.


Now reality has set in, and the American people will pay for it.  Economists are predicting that the wholesale price of milk (already up 15% in the last 6 weeks) will rise 23% by year's end.  Prices for meat, poultry, and eggs are set to rise dramatically as well.  As these price increases filter down and spread throughout the economy, they will set off further inflation.  Obama is calculating that these price increases won't become an issue until after the election.  After that, as he told then-Russian President Medvedev, he can be "more flexible."  In other words, after the election he doesn't care what Americans pay for a gallon of milk.  Just don't talk about it 'til then.  


Maybe that's why Secretary Vilsack is telling the public that the drought will have no effect on food prices despite all the evidence that it already has.  After all, corn is a fundamental ingredient in a host of food products.  If the drought continues, a lot more than 20% of the crop may be gone, and the effect on food prices will be a lot more than Vilsack's prediction of 0.1%.
The average two-earner household spends $12,258 a year on food.  In 2011, food inflation was 4.8%.  Double that to 10%, and that would be $1,226 that consumers won't be able to spend elsewhere.  That's a $150-billion hit to the economy.  At a time when unemployment is running 8.2% and the economy is growing by less than 2%, the nation cannot afford a $150-billion hit.


A bit of leadership from Obama could save Americans from this senseless damage.  Of course, it might cost him campaign donations from ethanol producers, it might cost him support in Iowa, and it might even make George Clooney mad.  But a great man would rise above these considerations, take action on behalf of the American people, and let the political chips fall where they may.  Obama is not a great man.  He is a small-minded, calculating politician who always puts his own interest above that of the country.    
Now is the time to suspend the ethanol program.  Better yet, end it entirely, and let consumers decide whether they want to put corn in their gas tanks.


Read more: http://www.americanthinker.com/2012/07/end_the_ethanol_madness.html#ixzz21YzdmUmK

BEWARE OF 15% ETHANOL GAS

As some of you may know, the very first gas station in the Country to sell 15% ethanol gas      (E-15) opened for sales in Kansas about two week ago.   I'm waiting for my webmaster to post an article I wrote a few weeks ago about 15% ethanol gas on my website's "Ethanol Articles" page.  Hopefully he'll post it by the end of this week.

We may not see it in Louisiana until late this year or next.  BUT, when you first see it in gas stations, DON'T BE TEMPTED TO TRY IT BEFORE READING YOUR VEHICLE'S OWNERS MANUAL.  Despite that EPA said it is safe to use in 2001 and newer passenger cars and light trucks, nearly ALL owners manuals for 2001 and new vehicles warn owner NOT to use gasoline with greater than 10% as engine damage could result.  They go further to say that if you do use gas with greater than 10% ethanol and damage does occur, the vehicle's warranty will be voided!  NEVER EVER use 15% (or anything greater than 10% for that matter) in any marine engine, motorcycle, 4 wheeler, jet ski, chainsaw, home generator or any gas powered lawn and garden tool.  It will destroy the engine and warranties will be void.  

A HUGE concern amongst retail gas station, convenience and grocery stores about carrying 15% ethanol gas is the significant liability concerns.  So, when it does come out in Louisiana, it will likely be in major branded stations.

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




KPC Warns Consumers of E15 'Danger'
PUBLISHED JULY 16, 2012
BY HUW EVANS


Although it has been granted Environmental Protection Agency approval, the Kansas Petroleum Council has issued a warning over the use of E15 fuel by motorists.
Last Thursday, the council issued a statement declaring that E15 which contains 15 percent ethanol, and now available for sale in the state, “could damage vehicle engines.”
KPC’s director, Ken Peterson, said in reference to a three-year study conducted by both the automobile and oil industries, that “we need to press the pause button on EPA's rush to allow higher amounts of ethanol in our gasoline," said Ken Peterson, director of the Kansas Petroleum Council. "The new fuel could lead to engine damage in more than 5 million vehicles on the road today and could void the manufacturer's warranty."


The three year study conducted by the oil and auto industries concluded that using E15 could cause damage to engine and fuel system components and void manufacturer warranties even though the EPA has granted the fuel’s approval for use in 2001 and newer model year vehicles.
Kansas is currently the only state where Ethanol 15 is available and the only station that currently sells it, requires purchases to buy at least four-gallons per pump visit in order to prevent filling up for small engines used in implements such as lawn mowers, chainsaws and garden tractors which aren’t E15 compatible.
"Our first priority should be protecting consumers and the investments they've made in their automobiles," remarked Peterson. "EPA has an obligation to base this decision on science and not on a political agenda."
Kansas Petroleum Council via Autoblog Green

CORN PRICES SOARING AND WILL RESULT IN HUGE PRICE INCREASES IN FOOD PRODUCTS

Yet another article on the impact that the severe droughts in the corn producing States will have on food prices.....we should all e-mail our US Senators and Congressmen and URGE them to put pressure on the EPA to reduce their ethanol fuel mandate!  If not, we may be faced with severe food shortages and sky high prices on all food products in which corn is used.

If you don't know how to contact our US Senators and Congressmen, here's how to e-mail them:

Louisiana US Senator Vitter: http://vitter.senate.gov/public/index.cfm?FuseAction=Contact.ContactForm

Louisiana US Senator Landrieu:  http://www.landrieu.senate.gov/about/contact.cfm

Contacting your State’s US Senator:  http://www.senate.gov/general/contact_information/senators_cfm.cfm

Contacting your State’s US Congressman:  http://www.contactingthecongress.org/

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


July 20, 2012 10:23 pm
Corn and soya prices continue to soar                                            By Emiko Terazono
Fears of a food shortage reverberated through commodities markets this week as corn and soyabean prices soared to fresh record highs amid the worst US drought in half a century, sparking fears of a repeat of the 2007-08 food crisis.
Although other grain staples such as wheat and rice remain lower, the weather disruptions in key agricultural areas around the globe, such as the severe drought in the US, a weak monsoon in India and a lack of rainfall in Russia threaten to push agricultural commodities prices higher.
The drought in the US Midwest had “completely changed the outlook for grains and oilseeds”, said Chris Gadd, grains analyst at Macquarie Securities. Earlier expectations that the US would see a bumper corn crop had been scuppered, and the grains market now faced a third consecutive year of poor supplies from the world’s largest producer and exporter, he said.  Benchmark soyabean prices on Friday hit a record high of $17.77¾ a bushel, while corn futures rose above $8 a bushel for the first time on Thursday, reaching a peak of $8.16¾.
The buying of corn and soyabeans was supported by US government data on the crops, which pointed to sharply lower harvests, as well as an official confirmation from meteorologists that the country was facing the worst drought in the US for half a century.
The US Department of Agriculture said in its weekly report that only 31 per cent of the corn crop was in “good to excellent” shape, down from 40 per cent a week earlier. For soyabeans, the figure fell to 34 per cent to 40 per cent.
Meanwhile, the US National Oceanic and Atmospheric Administration said the drought affecting the country was the worst since 1956 in terms of the areas suffering moderate to extreme effects.
Weather forecasts suggesting that the hot and dry conditions will continue were likely to lead to further cuts in crop production and yield predictions, said analysts. The Commodity Weather Group, a US weather consultancy, cut its corn yield estimate by 10 per cent from its July 5 outlook, to 136 bushels per acre, at the end of the week. This compares to the USDA latest number of 146 bushels per acre.
While US livestock breeders are hoping for some reprieve in the form of corn used for ethanol to be diverted to animal feed, Tom Vilsack, US agriculture secretary, this week rejected calls to ease the rules which mandate ethanol to be blended with gasoline. Analysts said that, with the powerful grain-producing states lobbying for the use of grains as fuel, the ethanol mandates were unlikely to be relaxed ahead of the US presidential election.
Despite the price rallies, many policy makers do not believe the world is facing a new food crisis because the global supply of wheat and rice, the two commodities most important for food security, remain relatively plentiful and prices are still below previous highs.

PRESSURE INCREASING TO REDUCE EPA ETHANOL MANDATE

With the severe drought in the corn belt states causing untold damage to corn crops, corn prices have increased to nearly $8/bushel.  With nearly 40% of corn grown this year destined for ethanol production, food prices, especially those using corn are very likely to skyrocket according to the US Department of Agriculture.  Pressure is mounting on Congress to demand that the EPA reduce the ethanol mandate, at least until the corn crop recovers, possibly next year.  Here's a recent article on the issue:

Is it time to reduce the ethanol mandate?

Rick Jordahl, Associate Editor, Pork Network   |   Updated: July 20, 2012

As the 2012 drought expands and intensifies across the heat-baked U.S. Corn Belt driving corn prices to all-time record highs, the Renewable Fuel Standard (RFS) mandating the production of ethanol is being debated with increased intensity.

With cash corn prices stretching up to record levels of $8 per bushel, many ask, ‘is now the time to reduce or waive the ethanol production requirement’? The answer to the question depends on who you ask.

The nation’s corn growers say leave the RFS alone. “When it comes to the Renewable Fuel Standard for ethanol and other biofuels, now is not the time for changes," says National Corn Growers Association President Garry Niemeyer in a statement responding to media coverage on the drought. “The RFS is revitalizing rural America, reducing our dependence on foreign fuel and reducing the cost of gasoline.”

A coalition of livestock and poultry groups, however, takes the opposite view. The group, which includes the National Pork Producers Council, is urging Congress to reform the RFS. The livestock and poultry producers cite a study conducted by Thomas Elam, president of FarmEcon LLC, showing that federal ethanol policy has increased and destabilized corn, soybean and wheat prices to the detriment of food and fuel producers and consumers.

“The increases we’ve seen in commodity prices are strongly associated with the RFS mandate,” said Elam. “At the same time, we haven’t seen the promised benefits on oil imports or gasoline prices. This means that while Americans are forced to pay more for food, they’re also not seeing lower prices at the pump; it’s a lose-lose situation.”

In comments to Pork Network, Ron Plain, University of Missouri agricultural economist, looks at several aspects related to reducing ethanol production.

According to Plain, one bushel of corn will produce about 2.75 gallons of ethanol and 17 pounds of distillers’ dried grains with solubles (DDGS), a co-product of ethanol production used to supplement livestock and poultry feed.

The RFS for calendar year 2012 is 13.2 billion gallons of ethanol from grain and 13.8 billion gallons for 2013, Plain says.  “At 2.75 gallons per bushel of corn, this is 4.8 billion bushels and 5.02 billion bushels, respectively. If ethanol production is reduced by 1 billion gallons, it would free up 363.6 million bushels of corn for feed or other use but, it would also reduce DDGS production by 3.09 million tons.”

Plain estimates that for every 1 billion gallon decrease in ethanol production, the feed supply increases by 7.09 million tons or the equivalent of 253 million bushels of corn,.

Plain also looks at historic relationship of projected corn yield and its effect on corn price. “In early May when USDA was predicting a 14.79 billion bushel corn harvest, December futures were trading at $5.00 per bushel.  On July 11 USDA predicted a 12.97 billion bushel corn harvest and December corn was trading at $7.00.  “So for a 1.82 billion bushel drop in production we had a $2.00 rise in price, or a $1.10  price rise per billion bushel decline in corn production.”

Plain believes it would be reasonable that the same relationship between corn availability and price also would work in reverse and a billion bushels of extra production would take $1.10 per bushel off of corn prices.

So what effect on corn price would result by decreasing ethanol production? “The math says that for each billion gallons of reduced ethanol production it would reduce corn prices by 28 cents per bushel (253/1000 times $1.10),” Plain estimates. “However, I would predict the decline would be more as it would establish a precedent and make corn demand for ethanol look much less assured.”

ETHANOL FROM COAL?

Here's an interesting article on Celanese chemical company buying a patent to make ethanol from coal.  This is not a new idea, but a patent that apparently allow this conversion with fewer emissions to the atmosphere.  Chemical companies currently manufacture ethanol.  However, the ethanol from corn industry was apparently given protection by refusing chemical companies from manufacturing ethanol for fuel blending use.  I suspect we may see lawsuits soon to deal with this unfair monoply.  You just know the large ethanol lobby group, Growth Energy will fight any efforts to open ethanol fuel blending by chemical companies.

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




Celanese up on ethanol pact; takes aim at U.S. for new tech
July 19, 2012, 4:24 PM


Shares of Celanese Corp.  rose 5% Thursday after the materials company announced a new pact with Indonesia to use its TCX technology to produce ethanol from coal.  Using a closed process that keeps emissions lower than other coal  technologies, the TCX technology produces ethanol  at a price of about $1.50 to $2 a gallon.


Once the ethanol is produced, it burns more cleanly than petroleum products and helps reduce emissions from cars and trucks.
Mark Oberle, senior vice president of corporate affairs for Celanese, said the company’s TCX process could produce ethanol from multiple sources including natural gas, depending on whatever’s most economical in a given market.
“It’s a breakthrough technology that allows us to produce ethanol cost-effectively using a variety of feedstocks,” he said.


Currently, the U.S. Renewable Fuel Standard restricts coal as a raw material, or feedstock, to make ethanol, but Celanese would like that to change, Oberle said.  For now, the king of American renewable fuels remains corn-based ethanol, which is blended in gasoline at a rate of up to 15%.
For the time being at least, Celanese has plenty on its plate with its new ethanol deal in Indonesia. U.S. regulators may not go along with classifying coal as a renewable fuel, but if the TCX process proves its worth overseas, policy makers could warm up to it.

Retailers Are Concerned About Liability in Selling E-15

Good morning readers!  Some of you may have heard that the 1st gas station to sell 15% ethanol (E-15) opened for business about two weeks ago in Kansas.  It is NOT MANDATORY for stations to sell E-15.  And, many retailers have told me they are very apprehensive to even consider selling this gas due to the tremendous liability concerns.  This new fuel will likely be priced about $0.10/gallon cheaper than E-10 and may tempt customers to try it without considering the consequences.  I'll have an updated article about E-15 on my website's "Ethanol Articles" page in a few days.  The best thing I can offer to consumers when they see the new E-15 pump label on a fuel pump is "BUYER BEWARE"!

Here's an article about retailers liability concerns regarding this new fuel:

Retailers want liability protection before considering E15

By Kris Bevill | February 22, 2012 – Ethanol Producer Magazine

Liability issues surrounding the use of E15 remain a major concern for many retailers when considering offering the fuel to customers driving 2001 and newer vehicles. The U.S. EPA recently approved required health effects and emissions testing for E15, bringing the fuel one step closer to commercial availability for those drivers, but before retailers can begin selling the fuel for 2001 and newer vehicles, additional requirements must be met, including EPA approval of a misfueling mitigation plan for retailers. State regulations also need to be amended to allow E15 to be sold and retail infrastructure must be approved to store and dispense the fuel. The ethanol industry is working to overcome all of these hurdles, but it remains unclear when the process will be complete.

Iowa is expected to be the first state in the nation to allow E15 to be sold for 2001 and newer vehicles. The blend is already available at numerous blender pumps in the state for use in flex-fuel vehicles, giving those retailers a head start in offering it to other customers when they are able. The ethanol-friendly state also offers incentives to retailers who sell mid-level blends of ethanol and has a statewide renewable fuel standard, which further spurs retailers to make alternative fuels available. The ethanol industry has also been successful there in working through the procedural issues surrounding E15’s legality. “We have been looking at state policies and have modified the necessary policies and requirements to be in a position to offer E15 fairly soon after it goes through the formal approval process and all of the registration and other requirements have been met,” said Lucy Norton, managing director of the Iowa Renewable Fuels Association. “We have moved forward very quickly to put the pieces together here to enable retailers to put E15 in this market so consumers have additional fuel choices.”

For Iowa retailers, the main issue now is gaining approval of a misfueling mitigation plan, according to Norton. The Renewable Fuels Association submitted a mitigation plan to the EPA on Feb. 16 which the group said could serve as a model plan for fuel retailers to follow in order to demonstrate regulatory compliance, but it is unclear when the EPA might approve the RFA’s plan. And some retailers say they will need even further assurance before they begin offering E15.

Minnesota-based CHS Inc., a cooperatively owned diversified energy, grains and foods business which supplies fuel to approximately 1,400 branded retail petroleum outlets and is the nation’s leading E85 retailer through its 800 Cenex-branded convenience stores located throughout the Midwest, said it will continue to support retailers’ decisions to install blender pumps but, as a company, it won’t consider selling E15 until multiple factors are addressed. Issues of concern include liability issues for vehicles and equipment, potential gasoline compatibility issues related to Reid Vapor Pressure levels and state and local fuel regulations, according to Lani Jordan, director of corporate communications at CHS, who added that the business remains committed to providing fuel that meets the broad needs of consumers now and in the future.

Jeff Lenard, vice president of industry advocacy for the National Association of Convenience Stores, said the potential for misfueling liability and the cost of acquiring equipment to sell E15 are two significant hurdles for retailers, but his group is also concerned about consumer acceptance of the fuel. “Retailers must obtain the appropriate storage tanks and dispensers to sell the product, and this can be a very expensive investment,” he said. “In order to justify such an investment, a certain level of consumer demand must exist. Given the opposition of the auto manufacturing industry to E15 and their concerns about the use of the fuel in current vehicles, it is very difficult to evaluate potential consumer demand.” Lenard added that while the NACS believes the EPA’s misfueling regulations are practical, there is still concern that retailers who comply with those regulations won’t receive adequate liability protection. “NACS is pursuing legislation that will provide such legal protection to ensure that a retailer who complies with EPA’s misfueling program cannot be held responsible in the event a self-service customer ignores or disregards the label and introduces E15 into a non-approved engine,” he said.

Valero Energy Corp., which produces more than 1 billion gallons of ethanol annually, more than any other company in the U.S. aside from Archer Daniels Midland Co. and Poet LLC, said it has no intention of selling E15 at any of its 1,000 company-owned retail fuel stores. “Because E15 has not been approved for use in all engines and hasn’t received warranty protection from engine manufacturers, we can’t guarantee its performance and we won’t sell a product we can’t guarantee,” said Bill Day, executive director of media relations for Valero. Some Valero-branded fuel stations are independently owned, however, and Day said those stations can choose to offer E15, but they would have to locate the dispensers under a separate canopy.