Category Archives: Ethanol

Biofuels Law Conference: Discussion of Ethanol Blend Wall

On May 2, 2014, I presented a talk at the Energy Bioscience Institute (EBI) 6th Annual Biofuels Law and Regulation Conference at the University of Illinois, summarizing a number of key legal, policy and regulatory issues affecting the development of the biofuels industry in the U.S. and internationally. The slides from that presentation can be found here. In this series of posts in Biofuel Policy Watch, I’m elaborating on the issues I discussed in the presentation.  These posts are not meant to provide comprehensive summaries of the issues at hand, but instead to highlight some key aspects of my presentation and other discussions at the EBI conference. For most of these policy issues, you can find background information in other posts on this blog and my Advanced Biotechnology for Biofuels blog, and I’ll provide links such previous posts where possible.

In today’s post, I’ll briefly discuss issues related to the so-called ethanol “blend wall” that I discussed in the EBI presentation. As has been widely reported, the blend wall represents a somewhat artificial (yet real) limit on the amount of ethanol that can be blended into the U.S. gasoline pool. This limit, which is roughly 10% of the total volume of gasoline-based fuel sold in the U.S., arises largely because until recently, EPA regulations did not allow the blending of concentrations of ethanol greater than 10% into gasoline for use with conventional motor vehicles. Higher blends of ethanol, particularly E85 (85% ethanol, 15% gasoline) are sold for use in specialized “flex-fuel” vehicles that are designed to utilize such blends, but these vehicles comprise only a very small share of the U.S. automobile fleet. Almost all the gasoline sold in the U.S. today includes 10% ethanol (E10), for use with automobiles, light trucks, as well as motors on boats, lawn mowers, snowmobiles, etc. The blend wall poses a challenge to compliance with the U.S. Renewable Fuel Standard, since the yearly-escalating volume mandates under the RFS cannot be met in the short term without the use of amounts of ethanol that well exceed the blend wall limits.

EPA is responsible for setting limits on the amounts of ethanol in gasoline, under its responsibilities under the Clean Air Act. In 2010 and 2011, EPA announced that it had granted waivers under the Act to allow ethanol blends of up to 15% (E15) to be used in all cars and light trucks of model year 2001 or later. However, E15 was not allowed to be used in older cars and in other motors, so that EPA’s regulations allowing the sale of E15 additionally included some requirements aimed at preventing misfueling of E15 into vehicles or motors for which it was not permitted. See my January 11, 2013 posts on Biofuel Policy Watch and Advanced Biotechnology for Biofuels for more details about E15.

In spite of EPA’s action, adoption of E15 around the country has been slow, for a variety of reasons. Some of these are quite legitimate: in order to sell E15 along with E10 (and in some cases also E85), gas stations may need to retrofit their gasoline pumps to offer the different blends, and may also need to install new tanks or piping to accommodate the increased corrosiveness of the higher ethanol blends. Along with the labeling requirements of EPA’s regulations and other factors, the needed infrastructure changes to individual gasoline stations can be extensive and expensive. Furthermore, many states also regulate their gasoline supplies and had existing laws or regulations that placed the blend limit at 10% — those states would need to explicitly authorize the use of higher blends, often through legislative action.

Beyond these legitimate barriers, the acceptance of E15 has been hindered by the lobbying and (quite frankly) misinformation efforts of various parties opposed to the use of E15. Although EPA’s action to approve E15 was based on the results of extensive engine tests showing that the fuel can be used safely, opponents have funded and widely publicized studies purporting to show that E15 damages engines. The resulting publicity has cast doubt on the safety of E15, including concerns over whether use of E15 might invalidate the warranties on engines.

So, as long as E15 struggles to gain acceptance, the blend wall of 10% remains a reality, thus causing the conflict with the obligations under the Renewable Fuel Standard. During my talk, I made several suggestions for policies that might promote the use of higher ethanol blends, to help break through the blend wall. These included the following.

Adopt state legislation to guarantee that E15 can be sold; block state bills that would prohibit sale of blends greater than E10. There has been a fair amount of state legislative attention directed at E15 in recent years, some of which I’ve discussed in earlier entries on this blog (for example, my posts of May 23, 2013 and February 27, 2014). According to recent news reports, there are now 14 states which allow E15 to be sold, although in many of these states there are very few gas stations yet selling this fuel. On the other hand, the last 18 months or so have seen a flurry of activity in state legislatures that were considering bills to prevent the sale of ethanol blends greater than 10% — please see the May 23, 2013 post and others preceding it on the blog for summaries of activities in 2013, particularly in some of the New England states. The biofuel industry has lobbied hard against these bills, and has successfully defeated or neutralized most of them, but in general the bills that have passed impose limits that would only go into effect in that state if a specified number of neighboring states adopted similar bans. Among more recent (winter-spring 2014) activities and developments in state legislatures are the following.

  • In Missouri, a law was scheduled to go into effect at the end of May, allowing E15 to be sold in the state. According to press reports, Missouri will become the 13th state to allow E15 to be sold. However, as reported elsewhere, the law generated some controversy from groups opposed to the use of higher ethanol blends.
  • The first gasoline station to offer E15 in Ohio opened in late May, making Ohio the 14th state in which E15 is commercially available.
  • In Iowa, Governor Branstad signed a bill on May 21, 2014 that promotes biofuel usage in several ways, including extending the state’s biodiesel production tax credit, and enhancing the retailer tax credit for gasoline sellers who want to offer E15 during the summer driving season.
  • Earlier this year, South Dakota announced that it would begin incorporating E15 into its state vehicle fleet. This six-month test period was announced in March 2014 by Governor Dennis Daugaard
  • In New Hampshire, the state House passed House Bill 1220, which would limit the use of corn-based ethanol to 10 percent of the fuel mix used in New Hampshire, but only if two other New England states adopt similar legislation. However, on May 15, 2014, the State Senate voted to send the bill to an interim study, which effectively kills the bill for the current legislative year.

Adopt policies mandating use of alternative fuels and high ethanol blends in captive government fleets. One potentially powerful strategy available to federal, state and local governments would be to adopt policies mandating or favoring the use of higher ethanol blends in captive government fleets: the cars and trucks used by government agencies for internal purposes, as well as mail delivery vehicles and other motor vehicle fleets owned and operated by governments. There are a handful of examples of this (e.g. see the South Dakota news report mentioned above), but to my knowledge such policies are not common, but more widespread adoption of such policies could go a long way towards creating a market for E15 as well as E85 and the flex-fuel vehicles that can utilize E85.

Education and consumer communication about the safety and utility of higher ethanol blends. The efforts by those interest groups opposed to biofuel adoption have been successful in sowing doubt about whether E15 can safely be used in most automobile engines. Rigorous studies have been done establishing safety, but it has been hard for the industry to publicize and disseminate these results against the tide of misinformation coming from the opponents. Ethanol and biofuel advocacy groups are doing what they can: among other activities, the Renewable Fuels Association maintains a webpage promoting E15, and the American Coalition for Ethanol recently issued a press release aimed at E15 education for the public. However, these efforts need to be broadened and intensified, and ideally should be joined by the government agencies whose studies have shown efficacy and safety, and which maintain regulation promoting or authorizing use of higher ethanol blends. That being said, I know this is not an easy task, and that the efforts of many stakeholders will be needed.

Promoting infrastructure upgrades. As mentioned above, the most important tangible barrier to the acceptance of higher ethanol blends is the need for costly infrastructure improvements at gasoline stations around the country. Governments at all levels should adopt programs that allow, encourage or support the infrastructure upgrades that are needed for E15, E85 and other high ethanol blends, by providing grants, tax breaks and other types of assistance for retailers to improve infrastructure. Some efforts along these lines have taken place, but more are needed.

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels. 

Upcoming Presentation: Biofuel Legal and Policy Issues

This Friday, May 2, 2014, I will be presenting a talk at the 6th Annual Biofuels Law and Regulation Conference at the University of Illinois. My talk, entitled “Legal and Policy Issues Affecting Biofuel Development,” will briefly summarize a number of key legal, policy and regulatory issues that are critical for the successful development of the biofuels industry in the U.S. and internationally. The slides from that presentation can be found here, and after the conference, I’m planning a series of posts here on in Biofuel Policy Watch to elaborate on the issues I intend to cover in the presentation. These topics are as follows (with links to the blog posts describing each topic):

In each post, I’ll briefly summarize the issues I’ve presented in the talk, and to the extent possible I’ll also report on any relevant discussion on these topics that arose during the conference. I’ll be happy to answer any questions anyone may have on this presentation, these topics, and the forthcoming blog entries.

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available atwww.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels. 

 

U.S. Federal and State Biofuel Policy News: February 27, 2014

Here’s an update on recent news items and other public policy developments relating to biofuel policies at the federal and state levels in the U.S.

Federal Legislative Developments


Farm Bill Passage. As has widely been reported in the trade press and lay press, in late January Congress passed, and President Obama signed, a new Farm Bill to replace the Farm Bill of 2007 that had expired at the end of 2012. The bill restored mandatory funding for the Energy Titles of the bill, an also extended eligibility of these programs to processes for production of renewable chemicals. The bill, which was widely heralded as a rare example of bipartisanship in the U.S. Congress, is also viewed as a victory for the biofuels and industrial biotechnology industry.

Biodiesel tax incentive extension. On February 12, 2014, Sens. Maria Cantwell, D-Wash., and Charles Grassley, R-Iowa, introduced a bill to extend the expired biodiesel tax incentive for three years. This incentive would apply to biodiesel, renewable diesel and renewable aviation fuel. The bill, S. 2021, would extend the tax incentive until 2017. However, the tax code overhaul bill more recently introduced by Rep. Dave Camp, R-Mich., would repeal and not reinstate any of the expired biofuel incentives or credits. Prospects for passage of the Camp overhaul bill in the current Congressional session are generally considered to be dim.

Bill filed to assist fuel retailers invest in alternative fuels. Representative Dave Loebsack (D-Iowa) has introduced the Renewable Fuel Utilization, Expansion and Leadership, also known as the  Re-FUEL-Act. This bill, H.R. 4051, would create a competitive grant program to provide funds for fuel retailers to use to make investments in renewable and alternative fuel and energy sources. It is meant to address the need for infrastructure changes at the retail level to allow improved consumer access to renewable fuels such as biodiesel and higher ethanol blends.

State Legislative and Policy Developments


New Hampshire legislation introduced.  A bill has been introduced in the New Hampshire State Legislature, HB 1220, that would prohibit the blending of more than 10% corn-based ethanol in gasoline in the state. A hearing on the bill was held by the House Science, Technology and Energy Committee on February 11, 2014, at which several proponents of ethanol, including the Biotechnology Industry Organization and the Advanced Ethanol Coalition, testified against the bill.

Missouri ethanol blending policy. In Missouri, on February 6, 2014, a State Senate committee debated whether to block a proposal that would allow ethanol/gasoline blends of up to 15% (E15) be sold in the state. The state’s Agriculture Department issued a rule in 2013 that would have allowed the sale of E15, but that rule was blocked by a legislative committee, due to concerns touted by business groups, car manufacturers and the petroleum industry that E15 blends might damage engines. Permanently blocking the rule would require approval by early March 2014 of both branches of the Missouri legislature and the signature of the governor, who is on record as supportive of E15.

Low Carbon Fuel Standard News


California Low Carbon Fuel Standard. In February 2014, The California Air Resources Board (CARB) issued an update to its scoping plan which indicated that it intends to extend the requirements of the California Low Carbon Fuel Standard through 2030. CARB did not provide further details of its plans, except to say that it plans during 2014 to propose “more aggressive targets for 2030”.

Oregon Low Carbon Fuel Standard.  On February 13, 2014, Oregon’s governor John Kitzhaber announced his intention to use executive authority to extend Oregon’s Clean Fuels Program beyond its scheduled December 2015 expiration. Legislative efforts to extend the program past this “sunset” date failed last year and have not sufficiently progressed so far this year, and so Gov. Kitzhaber said he would direct the Department of Environmental Quality to move to the second phase of the program, under which fuel distributors would be required to meet targets for low-emission motor vehicles fuels.

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels. 

 

Biofuel Policy Updates January 24, 2014

Here’s a quick wrap-up of some recent developments relating to biofuel policies in the U.S., particularly relating to the U.S. Renewable Fuel Standard (RFS) and the California Low Carbon Fuel Standard (LCFS).

2014 RFS volume mandates. The end of the public comment period is approaching on the US EPA’s proposed rule for the 2014 volume mandates (renewable volume obligations, or RVOs) under the RFS. As I reported in my 2013 year-end summary, this proposal represented the first time that EPA was proposing to reduce not only the targets for cellulosic fuels, but also the mandated volumes both for advanced biofuels (a category which includes cellulosic fuels) and the overall target for all renewable fuels. The biofuel industry and its proponents have been up in arms about this proposal, conducting an intense war of words in the media, the Twittersphere, and elsewhere, with numerous companies, trade groups, elected officials and others publicly voicing their opinions opposing these reductions in the RVOs. The public comment period closes on January 28, 2014, and it is not known how quickly EPA will respond and set the final 2014 volume mandates. My prediction is that EPA will respond to the public comments by raising the volumes from the levels in the proposed rule, but not restore them to the levels originally set in the RFS legislation.

Challenges to the RFS. In October 2013,  the American Petroleum Institute (API) and the American Fuel & Petrochemical Manufacturers (AFPM) filed petitions with the EPA challenging the 2013 cellulosic biofuel volume mandates, in view of an August 2013 announcement from KiOR that the company was lowering its projections for the amount of cellulosic biofuels it would be able to produce that year. On January 23, 2014, EPA announced, in letters to API and AFPM posted on its website, that it was partially granting these petitions for reconsideration of the 2013 cellulosic RVOs, based on the “new information” from KiOR, and that EPA expected to propose such revised volume mandates in upcoming rulemaking. I haven’t yet seen any industry reaction to this announcement, but I’m sure that responses from the biofuel industry will be swift and harsh, especially coming so closely on the heels of EPA’s proposed reduction in the 2014 RVOs. Note that the October 2013 petitions are different from the petitions filed by API and AFPM in August 2013 asking for a partial waiver of the 2014 RVOs, and are also in addition to a lawsuit these groups and others had filed in the U.S. Court of Appeals challenging the 2013 volume mandates.

California Low Carbon Fuel Standard. The full 9th Circuit U.S. Court of Appeals issued a decision on January 22, 2014 that it would not, after all, rehear a case previously decided in favor of the California Air Resources Board (CARB), when a 3-judge panel of the Court ruled by a 2-1 vote that the LCFS did not unconstitutionally discriminate against out-of-state fuel producers. That panel decision reversed a lower court decision that went against CARB. The decision not to rehear the case leaves the decision by the 3-judge panel in place and would allow CARB to continue to administer the LCFS program. However, seven justices on the Court signed on to a dissent that is widely believed could signal the path for the industry groups who are the plaintiffs to appeal the case to the U.S. Supreme Court. The crux of the dispute is whether the requirement that the energy costs of transporting fuel into California from other states be considered in determining the carbon intensity of fuels under the LCFS discriminates against out-of-state fuels in violation of the Constitution’s provisions that prohibit states from interfering with interstate commerce. 

 

Year-End Biofuel Policy Wrap-Up

The close of 2013 seems to be a good time to post a quick wrap-up of some recent developments relating to biofuel policies in the U.S. and Europe, particularly relating to the U.S. Renewable Fuel Standard (RFS) and the European Renewable Energy Directive (RED). As some of these stories have already been widely reported in the trade press and onlnie, I have not included links for all the stories — please contact me for more information on any of these developments.

2014 RFS volume mandates. As has been widely reported, the US EPA published its proposed rule for the 2014 volume mandates (renewable volume obligations, or RVOs) under the RFS. In the proposal, EPA used its statutory authority to propose reduction of certain of the volume mandates below what was called for in the original 2007 legislation. This included a substantial reduction in the target for cellulosic fuels, as has been done in recent years, to a level corresponding to EPA’s assessment of actual gallons of cellulosic fuel expected to be produced next year. But for the first time, EPA used its authority to also lower the mandated volumes both for advanced biofuels (a category which includes cellulosic fuels) and the overall target for all renewable fuels, the latter being reduced by about 3 billion gallons. Combined, these adjustments also lead to about a 1 billion gallon reduction in the portion of the mandates corresponding to corn ethanol.

This is only a proposed rule, and EPA is taking comments on the proposal until January 28, 2014. The proposal elicited the expected vehement reactions on both sides of the renewable fuels debate, and biofuel supporters have been pulling out all the stops to convince EPA to scale back or eliminate the proposed reductions in the mandates.

EPA has held public hearings on this proposal. A hearing in Washington DC on December 5 drew approximately 150 commenters over a 12-hour period. Reportedly, RFS supporters outnumbered RFS opponents roughly 2-to-1. The outcome of all the public comments and debate will likely not be known until after the close of the public comment period.

Challenges to the RFS. Among pending actions challenging the RFS are the following.

  • EPA has requested public comment on the petition asking for a waiver of the 2014 RVOs filed in August 2013 by the American Petroleum Institute (API) and the American Fuel & Petrochemical Manufacturers (AFPM). Public comments have been requested by January 28, 2014.
  • The U.S. Court of Appeals has agreed to expedite review of a pending lawsuit challenging the 2013 volume mandates that EPA issued in August 2013. The Court had previously consolidated three separate lawsuits filed by API, AFPM, and Monroe Energy. A number of organizations have filed briefs on both sides of the issue, including BIO and the National Biodiesel Board in defense of the 2013 volume mandates. The case should move quickly after a February 2014 deadline for submission of all briefs.

Congressional action. Although EPA’s proposal to lower the 2014 mandates may have temporarily quieted Congressional Republican efforts to repeal the RFS in its entirety, at least two new bills have been, or are expected to be, filed in Congress to revise the RFS, in addition to at least one bill addressing the tax credits due to expire today, December 31, 2013.

  • On December 13, Senators Dianne Feinstein (D-Calif.), Tom Coburn (R-Okla.) and eight cosponsors introduced the Corn Ethanol Mandate Elimination Act of 2013. The bill eliminates the corn ethanol mandate within the Renewable Fuel Standard (RFS), which requires annual increases in the amount of renewable fuel that must be blended into the total volume of gasoline refined and consumed in the United States. Cosponsors of the bill are Richard Burr (R-N.C.), Susan Collins (R-Maine), Bob Corker, (R-Tenn.), Kay Hagan (D-N.C.), Jeff Flake (R-Ariz.), Joe Manchin (D-W.Va.), Jim Risch (R-Idaho) and Patrick Toomey (R-Pa.).
  • Senators Ben Cardin (D-Md.) and David Vitter (R-La), the top Republican on the Senate Environment and Public Works Committee, have been widely reported to also be working on legislation that would curtail corn’s portion of the RFS mandate. Details on this bill have not yet been disclosed.
  • On December 11, the Senate Environment and Public Works Committee held a hearing on the RFS. Although testimony and statements from committee members were heard on both sides of the issue, Committee Chair Senator Barbara Boxer (D-Calif.) reportedly closed the hearing by indicating that her committee would not be pursuing any legislation that would “reverse course” on the RFS.
  • On Dec. 12, Rep. Scott Peters (D-Calif), introduced H.R., 3758, which would extend the second generation biofuel producer credit and the special allowance for second generation biofuel plant property. The bill, entitled the “Second Generation Biofuel Extension Act of 2013,” would extend both the second generation biofuel tax credit and the second generation biofuel plant property allowance for one year, extending the expiration dates from to Jan. 1, 2015.

California Low Carbon Fuel Standard. The full 9th Circuit U.S. Court of Appeals will rehear a case previously decided in favor of the California Air Resources Board (CARB), when a 3-judge panel of the Court ruled by a 2-1 vote that the LCFS did not unconstitutionally discriminate against out-of-state fuel producers. That panel decision reversed a lower court decision that went against CARB. Briefs have been filed on both sides of the issue, but it is not known when the full Appeals Court will decide the issue.

European Union Renewable Energy Directive. In meetings December 12-13, the Energy Ministers from EU nations failed to reach agreement on the path forward for amendments to the Renewable Energy Directive. In particular, the ministers rejected a compromise proposal from Lithuania that would have capped crop-based biofuels at 7% (up from the 6% limit passed by the European Parliament) but would also have required mandatory reporting of indirect land use change (ILUC). This action apparently means that the proposal will not advance any further until after the 2014 parliamentary elections, and assures that there will not be final action until sometime in 2015. In the meantime, the provisions of the Renewable Energy Directive remain in place as originally adopted.

E15 and E85 Ethanol News: June 4, 2013

Here’s an update on recent news items and other public policy developments during the last few weeks relating to the use and market acceptance of 15% blends of ethanol into gasoline (“E15″) and other higher blends of ethanol such as E85, including specific updates on actions in several U.S. state legislatures that I reported on in a post on May 23.

E15 Developments in the States 


Florida Governor signs bill to repeal the state’s Renewable Fuel Standard. As previously reported, the Florida legislature passed House Bill 4001, a bill that would repeal the requirement that gasoline sold in Florida be blended with 10% ethanol. On May 31, Governor Rick Scott signed the bill. Although the new law removes the previous blending mandate, it does not prohibit the sale of E10 or higher blends, and so the bill is expected to have minimal effect since essentially all the nation’s gasoline supply is currently blended with up to 10% ethanol. This bill had been opposed by the biofuel industry, including companies such as INEOS and Algenol who are located in Florida, and in response to the signing of the bill, Algenol’s CEO reiterated the company’s intent to investigate other locations for its planned first commercial facility. 

Maine legislation. As previously reported, the Maine legislature continues to debate bills that would hinder the sale of gasoline-ethanol blends in the state.  On May 23, the state Senate unanimously passed a version of the previously-killed bill LD 115, amended to specify that sales of cornstarch-based ethanol would be prohibited in Maine if similar bans were to be adopted in at least 10 other states with a collective population of 30 million. Prospects for full passage are not known.

A hearing was held in the Illinois House on a proposed bill that would trade the 20% sales tax break currently available for sales of E10 ethanol blends for a 10% tax break on E15 sales. Advocates on both sides of the debate presented their positions at this hearing. As previously reported, this bill has been pending in the state legislature for some time, and proponents are hoping for action before the legislature ends its current session.

In Iowa, a State Senate committee voted on May 17 to retain the advantaged tax status of ethanol blends (19 cents per gallon) relative to unblended gasoline (21 cents per gallon).  Also in Iowa, the full legislature passed a bill, H.F. 640, on May 23 that guarantees that local retailers retain the right to offer ethanol and biodiesel blends of its choice, said to be protection against clauses in the supply agreements between retailers and refiners that might restrict such choice.

E15 Federal Developments


EPA files brief with Supreme Court on E15 ruling. The U.S. Solicitor General has filed a brief on behalf of the EPA on the lawsuit that has challenged EPA’s waivers under the Clean Air Act which have granted approval for E15 ethanol blends. As previously reported, three industry groups including the Alliance of Automobile Manufacturers had filed a petition with the Supreme Court asking the Court to overturn an Appeals Court decision that the groups did not have legal standing to challenge EPA’s actions allowing E15 to be sold in the U.S. The government’s brief stresses the Appeals Court’s decision of the industry group’s lack of standing and states that the groups have not highlighted any flaws in the ruling of the Appeals Court. There is no definitive timetable on the Supreme Court’s decision of whether or not to hear the case; should they decide not to do so, the Appeals Court ruling in favor of EPA would stand.

Previous Biofuel Policy Watch posts on ethanol policy:

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels. 

 

E15 and E85 Ethanol News: State Legislative Update, May 23, 2013

Here’s an update on recent actions in several U.S. state legislatures on pending laws that would affect the use and market acceptance of ethanol/gasoline blends such as E15 and E85. Although these legislative actions have not all been successful, most of them have had the goal of discouraging or preventing the use of ethanol in the affected states, and mirror some of the efforts being pursued by Republicans in the U.S. Congress to similarly block increased blending of ethanol in the nation’s gasoline supply. (I have recently summarized these Congressional efforts in a post in my Advanced Biotechnology for Biofuels blog.)

E15 Developments in the States 


Mixed progress for anti-ethanol bills in the Maine legislature. As previously reported in the blog, there have been four bills on fuel ethanol introduced in the Maine legislature this year. 

  • One of these, LD 453, which could potentially ban the sale of gasoline containing more than 10% ethanol, has now been enacted. The bill was approved by the legislature on May 1 and signed by the governor on May 7, but this bill would only take effect if at least two other New England states adopted similar prohibitions.
  • In other action, on May 8, the Maine House of Representatives approved by a 109-32 vote a bill (LD 115) that would ban the sale of corn-based ethanol in gasoline in the state. On May 15, the State Senate rejected LD 115 by a 21-14 vote, apparently killing the bill in this legislative session, although it has recently been reported that the bill has been revived through a “motion to reconsider”, still with uncertain prospects for passage. Even if passed, this bill would also only take effect upon similar action by at least two other New England states.
  • The House also passed LD 105, that would allow sale of gasoline with 5% ethanol, and a nonbinding resolution urging the federal government not to require the sale of E15 gasoline blends, but LD 105 has also been killed in the State Senate, in a vote on May 16.

New Hampshire anti-ethanol bill dies in State Senate. The State Senate in New Hampshire has killed a bill, HB362, that would have placed a total ban on the blending of ethanol in gasoline in the state. The Senate’s action to designate the bill “Inexpedient to Legislate” effectively kills the bill for the current legislative session.

Bill to repeal Florida’s Renewable Fuel Standard still awaiting governor’s signature. As previously reported, House Bill 4001, a bill that would repeal the requirement that gasoline sold in Florida be blended with ethanol, was approved by the state House of Representatives on April 12, and its companion bill Senate Bill 320 was passed by the Florida Senate on a 33-1 vote on April 24. The bill has gone to the governor, who has until June 4, 2013 to act on the bill. Industry groups are calling on Governor Rick Scott to veto the bill, and a leading Florida biofuels company, Algenol, has said that the enactment of this legislation may cause them to reconsider a major expansion it has planned in the state.

California legislator urges Congress to pass RFS Reform Act.  A Republican Assembly member in California, Kristin Olsen, has introduced a resolution (AJR 21) that would have the California legislature urge the U.S. Congress to pass H.R. 1462, the “RFS Reform Act of 2013”. As I’ve reported in my Advanced Biotechnology for Biofuels blog, H.R. 1462 would eliminate the mandate for corn-based ethanol in the Renewable Fuel Standard and would also prohibit ethanol blends in gasoline of greater than 10%. The prospects for AJR 21 in the California legislature are unclear, but even if passed, the resolution would have no binding effect on the U.S. Congress.

Minnesota legislation. As reported in an earlier blog post, legislation (H.F. 976) is moving through the Minnesota legislature that would alter the state’s biofuel and ethanol mandates. The most significant changes would broaden certain of the ethanol blending mandates to allow use of other advanced biofuels in such blends. Please see the earlier blog post for more details. The bill is now in conference committee to resolve differences between different versions.

Previous Biofuel Policy Watch posts on ethanol policy:

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels. 

 

Pending Biofuel-Related Bills in Congress May 2013

In the first few months of the U.S. 113th  Congress there have been a number of bills introduced into the House of Representatives and the Senate that, if enacted, might affect the development of ethanol or other renewable fuels. The ones of most potential concern are those, all introduced by Republicans, that are meant to repeal or curtail existing programs that currently benefit the renewable fuels industry. Although I’ve written about many of these bills in previous posts in this blog, I thought it would be useful to post a more complete summary, which I have done today in my Advanced Biotechnology for Biofuels blog.

In that entry, I’ve summarized 12 pending bills, all introduced by Republicans in either the House or the Senate, which would significantly affect or limit federal biofuel policies. Included are bills that would eliminate the Renewable Fuel Standard (RFS), or modify the RFS in several ways, e.g. to eliminate incentives for cornstarch-based ethanol or to change the way EPA calculates the annual volume mandate for cellulosic biofuels. There have also been several bills introduced that would prohibit the Environmental Protection Agency from approving ethanol/gasoline blends containing greater than 15% ethanol while also revoking EPA’s prior decisions to approve E15 fuel for certain motor vehicles. Other bills would eliminate some of the favorable tax treatment now available for biofuels and other sources of renewable energy.

That post, which has links to the text and up-to-date status of all these bills, can be accessed here. Please look to future posts on this blog for updates on the status of these bills and other U.S. Congressional or state legislative actions that may affect the renewable fuels industry.

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels. 

E15 and E85 Ethanol News: May 1, 2013

Here’s an update on recent news items and other public policy developments during the last few weeks relating to the use and market acceptance of 15% blends of ethanol into gasoline (“E15″) and other higher blends of ethanol such as E85.

E15 Federal Developments


Senate bill would allow MLPs for renewable fuels. On April 24, a bipartisan group of senators introduced a bill entitled the “Master Limited Partnerships Parity Act”, which would extend the benefits of these partnerships (MLPs) to renewable energy, biobased chemical, and energy efficiency technologies. MLPs, which have long been available for oil, gas and other traditional energy companies, have ownership shares that are traded like typical corporate stock but are taxed as partnerships rather than corporations. This structure is viewed as favorable to private investors but is not available to renewable energy companies. It is still too early to know the prospects for this bill in the current Congress, but it has apparently engendered strong support from across the political spectrum.

E15 Developments in the States 


Bills to repeal Florida’s Renewable Fuel Standard. As previously reported, House Bill 4001, a bill that would repeal the requirement that gasoline sold in Florida be blended with ethanol, was approved by the state House of Representatives on April 12, and the companion bill Senate Bill 320 was approved by the Senate Communications, Energy, and Public Utilities Committee. At an April 9 hearing held by the Senate Environmental Preservation and Conservation Committee, the Senate Bill was substantively amended to differ from the House version. The original version of the bill would have repealed the sections that required ethanol blending, but in the amended version, these sections would not be repealed, but would be amended to “encourage” ethanol blending rather than require it. Although the amended bill cleared the Committee by a 7-0 vote, on April 16 the full Senate adopted an amendment that once again made SB 320 identical to HB 4001, so that it would once again repeal the blending requirement. The Florida Senate passed the bill on a 33-1 vote on April 24. The bill now goes to the governor, with industry groups calling on Governor Rick Scott to veto the bill. A leading Florida biofuels company, Algenol, has said that the enactment of this legislation may cause them to reconsider a major expansion it has planned in the state.

Minnesota legislation. As reported in an earlier blog post, legislation is moving through the Minnesota legislature that would alter the state’s biofuel and ethanol mandates. Among the changes reported in the omnibus energy bill H.F. 976, the current requirement for 10% ethanol in all gasoline sold in the state would be revised to read “10% biofuel”; the requirement would be altered to require gasoline either to include the maximum percent of biofuel authorized by the EPA (i.e. E15) or to include 10% of an advanced biofuel;  and the tiered goals of current law would be amended to lower the short-term goals but raise the 2025 goal to 30% biofuels. Different versions of the bill have been passed by both houses, so the bill is now in conference committee to resolve these differences.

E85 News


E85 consumption, numbers of flex-fuel vehicles, rose in the U.S. in 2011. According to figures published by the U.S. Energy Information Administration, consumption of E85 in the U.S. increased 52% from 2010 to 2011, with over 500 million gasoline-equivalent gallons used in 2011. The rise in E85 usage came despite flat growth of E10 during the same period. EIA also reported that there were nearly 2.47 million E85-capable vehicles on the road in the U.S. in 2012. The full data set can be accessed on the EIA website.

Draft EPA policy may inhibit development of flex-fuel vehicles. EPA has published a Draft Guidance for how flexible fuel vehicles (FFVs) would be treated under its Light-Duty Greenhouse Gas Emissions Program for model years 2016–2019. The Emissions Program sets fleet-average limits on GHG emissions that all automakers must meet, and under current policy for model years 2012-2016, automakers receive a credit for FFVs based on the assumption that each FFV would be fueled with E85 50% of the time. The new draft guidance would reduce this “F factor” to 20% for model years 2016-2019. Many biofuel companies feel this will significantly discourage or deter further development of flex fuel vehicles. The comment period on this draft closed on April 22, but it is not known how quickly EPA will act to adopt a final policy.

High RIN prices and E85 sales. The Energy Information Administration, in its April Fuels Outlook issue, predicted that the high prices of ethanol RINs and the expected drawdown of banked RINs would stimulate E85 sales by lowering its price relative to E10, and also create increased incentive for biodiesel blending. Prices for ethanol RINs reached a two-week high on Monday, April 30: 2012 D6 RINs rose to $0.68/gallon and 2013 D6 RINs rose to $0.74/gallon.

Previous Biofuel Policy Watch posts on ethanol policy:

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels. 

 

E15 and E85 Ethanol News: April 10, 2013

Here’s an update on recent news items and other public policy developments during the last few weeks relating to the use and market acceptance of 15% blends of ethanol into gasoline (“E15″) and other higher blends of ethanol such as E85.

E15 Federal Developments


E15 Appeals Court ruling appealed to Supreme Court. The Alliance of Automobile Manufacturers has filed a petition to ask the U.S. Supreme Court to review and overturn the opinion of the Court of Appeals for the District of Columbia which threw out a lawsuit that had challenged EPA’s waivers approving E15 ethanol blends. The Appeals Court had ruled that the various plaintiffs (companies and trade associations) did not have legal standing to challenge EPA’s actions. The automakers association again cited the alleged damage that E15 may do to automobile engines, and their assertion that more study of E15’s effects is needed. The Supreme Court usually agrees to hear only a small fraction of the cases appealed to it, so the prospects for further review of this lawsuit are not clear.

Impact of EPA’s proposed sulfur rule on ethanol. The U.S. EPA has issued a proposed regulation revising the standards for sulfur emissions in gasoline (the so-called “Tier 3 Rule”). The proposed rule would require that sulfur emissions from gasoline be reduced from the current 30 ppm to 10 ppm by model year 2017.  Although this rule doesn’t directly affect ethanol mandates, it has several provisions relating to ethanol (there is a good summary of these provisions in Ethanol Producer magazine). In the rules, EPA assumes that the Renewable Fuel Standard volume requirements will at least partially be met by the time these new limits take effect in 2017, and therefore reflect a mix of E10 and E15 by 2017 and 100% E15 by 2030. The baseline test fuel for auto manufacturers to determine their emissions is proposed to be E15, although EPA has also requested comment on E10 as an alternative. The proposal also includes (apparently for the first time) detailed specifications for an E85 emissions test fuel to be used for flex-fuel vehicle certification and there is also a provision allowing manufacturers to request approval for mid-level ethanol blends such as E30. In addition, some feel that these more stringent emission standards may present a market opportunity for ethanol, if blenders wish to take advantage of ethanol’s higher octane rating.  This is a proposed rule and there will be a 30 day comment period beginning on the day of Federal Register publication. That period is likely to be extended for an additional 15-30 days if not longer. EPA will then take public comment into consideration and will issue a Final Rule, which under ordinary circumstances takes up to a year, and for controversial rules could take considerably longer.

E15 Developments in the States 


Legislation to repeal Florida Renewable Fuel Standard moves forward, but is amended at April 9 hearing. House Bill 4001, which would repeal the state’s Renewable Fuel Standard Act and end mandatory blending of ethanol into gasoline, was approved by two House committees in March, following a hearing held on March 22 by the Regulatory Affairs Committee of the Florida House of Representatives. Action has now moved to the State Senate, where companion bill Senate Bill 320 has been approved by the Senate Communications, Energy, and Public Utilities, and was scheduled for a hearing before the Environmental Preservation and Conservation Committee on April 9.  The favorable votes on this legislation have come in spite of significant opposing testimony from renewable fuel companies, trade associations, and other allies.  

In a more recent development, the Senate Bill was substantively amended at the April 9 Committee hearing. The original version of the bill would have repealed the sections that required gasoline sold in Florida to be blended with ethanol. In the amended version, these sections would not be repealed, but would be amended to “encourage” ethanol blending rather than require it. This amended bill, which cleared the Committee by a 7-0 vote, is still opposed by some within the Florida biofuel industry, although it is clearly less damaging than the original version of the bill. According to press reports, the Senate Committee was heading towards disapproving the original bill, and proposed this amendment as an alternative.

New Hampshire legislation to ban corn ethanol. As previously reported, House Bill 362, which would ban the use of “corn-based” ethanol in the state, was passed by the state House of Representatives on March 13. It is now before the State Senate, where a hearing is scheduled for April 10 before the Energy & Natural Resources Committee.

Maine ethanol legislation. As previously reported, there were four bills on fuel ethanol introduced in the Maine legislature this year. According to the Portland Press Herald, on March 28 the Joint Committee on Environment and Natural Resources sent one of these bills, LD 453, to the full legislature. This bill would prohibit sale of gasoline containing more than 10% ethanol. The other bills were reported out of Committee with unfavorable recommendations for the full legislature. A date has not yet been set for action by the full House or Senate on any of these bills.

E85 News


USDA grants available for blender pump installation. The U.S. Department of Agriculture has announced that will be accepting applications from gasoline retailers for grant funds to be used to install ethanol blender pumps. This is the third year that these grants, under the Rural Energy for America Program (REAP), will be available. A gas station in Jackson, Nebraska is one of the recent recipients of these grants.

E85 News Briefs

  • Sales of E85 in Minnesota declined 26% in 2012 relative to 2011, a drop that was attributed to the narrow price spread between E10 and E85.
  • Sales of E85 and other alternative fuels are said to be strong in Wisconsin, where there are reportedly 124 stations selling E85.

Previous Biofuel Policy Watch posts on ethanol policy:

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels.