Oil companies demand end to ethanol mandates

As described in our March 10 article, it is generally accepted that fuel companies hit the so-called blending wall this past winter, a situation where EPA blending mandates cannot be fulfilled, even if every drop of gasoline contains 10% ethanol by volume. This has unleashed the unintended consequence of RIN (Renewable Identification Number) speculation, as described in this article from the oil industry newsletter Platts.

While oil producers and various industry and consumer groups such as the Aviation Fuel Club have been calling on Congress for the past several years to repeal the RFS2 ethanol mandates that are a consequence of the EISA 2007 Act, now even the nation’s third-largest producer of ethanol, Valero, has asked Congress to scrap the entire law and start over.

As described in the Des Moines Register, “Bill Klesse, chief executive of Valero Energy Corp., told a Senate panel that the Renewable Fuel Standard — an eight-year-old law that requires refiners to produce alternative fuels to help reduce the country’s dependence on foreign energy — is ‘out of control’ and needs to be overhauled to better reflect today’s marketplace…With not enough gallons of fuel available to blend all the ethanol required, refiners are forced to buy these credits to comply with the law. RIN prices have soared to a record, topping $1.30 per gallon this week, from a few cents earlier in the year.”

Not only aviators prefer an ethanol-free choice.  The website Pure-Gas.org, the best list of retail sellers of ethanol-free fuel, just passed through the 7,000 mark, little more than six months since it reached 6,000.

With pressure mounting from consumers, industry groups, those concerned about the negative influence of ethanol production on third-world food prices and now even the ethanol producers themselves, how much longer can Congress ignore the need for the obvious, scrapping this obsolete and market-distorting law? An end to ethanol mandates would eliminate the added cost of RINs, greatly expand the availability of aviation-grade mogas and assure future supplies of an FAA-approved, lower-cost, lead-free alternative to 100LL.

It would be great to have our own aviation advocacy groups weigh in on this important issue. If any of our readers include the leaders of the EAA, AOPA, GAMA, NATA, and the NBAA, why not have your D.C. office add its name to the growing list of those calling for a repeal?  Perhaps one day we’ll finally see mogas available at Oshkosh, where it was first approved by the FAA 31 years ago and could power the vast majority of aircraft that make the annual aerial trek to EAA AirVenture, taking place this year from July 29-Aug. 4.

Comments

  1. Guido says

    Pure-Gas is on the honor basis and many of the listings are bogus. They list 183 stations in Oregon, including some Shell, Chevron and Valero! These just aren’t true. I checked several near Sacramento a couple years ago and they too were bogus. Great idea but not accurate so I wouldn’t quote their growing count to support any conclusions.

  2. Henry says

    I can’t blame the oil companies if some one was taking 10% or more of my business I would complain too. I know we don’t get most of our oil from the middle east but our usage props up their prices and they funnel money to groups of people that want us all dead. Why do we want to help them and not the farmers? They don’t want anybody dead. The more mouths the better. Why can’t we use ethanol in our planes? To expensive to change? When we will drop 30K for a new radio. It only took a couple hundred to change cars over to burn ethanol.

  3. says

    Everyday, we are bombarded with calls to get congress to do the right thing. It is so frustrating that we elected them and are paying them to do just that. So why is it that we have to be constantly doing their job. Who ever needed corn in our gasoline to increase the supply? We certainly don’t need it now, and, but for the bungling fools in Washington, we would be the richest, most prosperous, most energy independent nation on earth. They kill our jobs, starve people around the world, ruin our equipment and stifle our initiative. We don’t need anymore laws, we just need to start getting rid of the ones that are hurting this country on every front. This is not just an issue about Fuel for our planes.

  4. Ron Arras says

    Up here in the midwest just go to any store that sells Stihl chainsaws or weed eaters etc. They have pallets of fuel without ethanol in quart, gallon and 5 gallon cans. Thats to combat E10 not E 85.

  5. says

    Booze in gasoleen has already ruined 2 chainsaws-1 garden tractor and a weed eater and a boat engine hoses and a carb. Several of my boating friends have to replace hoses frequently. The whole thing was generated by dumb people to get the farm vote. Alaska does not use E10 . Why should we. Regards Ray

  6. John says

    Government is stupid. Government meddling in free markets is more stupid. Always has been. And it never changes… Best wishes to those trying to change it.

  7. Jscott says

    Unfortunately, AOPA and EAA want the fantasy drop in replacement for 100LL regardless of the cost. We already know that whatever that fuel turns out to be, it will cost more than 100LL, which many of us can’t afford now. Apparently fuel costs don’t matter to the alphabet soup guys. Unfortunately, the rest of us have to deal with reality. Their stance only serves to demonstrate that they only care about the big money guys that can afford the bigger planes that require 100LL or an equivalent replacement.

    • Glenn Darr says

      It appears more and more that AOPA is catering to the turbine crowd a whole lot more than the Cessna, Piper, Beech crowd. I really don’t feel wanted by them anymore. EAA does not seem to do much for the homebuilder either. For both organizations I feel it is about the money.

      • says

        You can’t expect AOPA to ignore the turbine crowd. On the other hand neither is it ignoring the piston engine crowd. Remember AOPA represents “all” present and future aircraft owners. Unlike yourself AOPA recognizes that a growing number of previous piston aircraft are being re-engined with turbines.

  8. Richard Baker says

    Congress is NOT listening to anyone except the lobbyists and their ilk. These clowns are worried what the media and the social arbiters in DC will think of them. Nuts to the country.

  9. says

    The ultimate irony is that the RFS in EISA 2007 has nothing to do with E10. E10 is nowhere mentioned in the act. E10 is NOT Renewable Fuel as defined in the act. The act is NOT a federal mandatory E10 law. E10 in every drop of our gasoline is an unintended consequence of the act. The act was supposed to spur the production of E85 and flex-fuel vehicle cars. E85 is Renewable Fuel as defined by the act. If you want to understand the act, see my web site: http://www.e0pc.com

    The RIN madness is also an unintended consequence of the act, but it will sort itself out because when all of the obligated parties are required to blend ethanol in 100% of their production, there will be no excess RINS to trade. The real problem being masked by excess RINS is that obligated parties are going to be required to blend billions of gallons of ethanol in the future years with no gasoline to put it in, unless they start blending billions of gallons of E85. But of course there are not as many flex-fuel vehicles as originally planned and there certainly are not as many E85 stations as originally planned because the infrastructure is very expensive to install and the energy / cost equation is not working out as planned. E85 cars get about 30% less mileage but E85 does not cost 30% less than gasoline, so there is no economic incentive for the consumer.

    So, the reality is that the RFS mandate will implode next year with huge economic consequences for this massive market manipulation act.

  10. John Barsness says

    “how much longer can Congress ignore the need for the obvious, scrapping this obsolete and market-distorting law?”

    I wish Congress would… however, the farm lobby LOVES the ethanol mandates. Even some of my farming relatives who are generally conservative, common sense guys just go plain stupid when it comes to ethanol… “It’s a GOOD thing!” I’ve heard them say. Yeah, if you’re a corn farmer and getting government money.

    For the rest of us, it SUCKS! Congress represents a lot of farm states; and with an administration as anti-oil as this one, I won’t hold my breath anything positive will be done anytime soon.

    All we can do is keep making our voices heard.

  11. John says

    Would this mean my lawnmower would work again? I have had to replace it as well as the edger and blower. Started using avgas and they work fine. Um….my wife just told me the boat won’t crank.

    • says

      While I agree that ethanol in mogas is a bad idea and not worth the trouble; if you think 10% ethanol in gasoline causes problems with small engines or boat motors you’d better look at a different cause. I have yet to have a single problem with gasoline blended with 10% ethanol in any non-flying application. It’s just a waste of tax dollars.

      • Joseph N. Greulich says

        The damage to new equipment takes a bit more time as there is a coating on these parts, the alcohol will eat it off. When that happens dismilar metal corrosion will take place , alcohol is a super solvent and loves mosture of its water collecting ability . Why do you think they are making auto fuel tanks out of plastics. This super solvent breaks down the oils lubrication and metal protection quality. Instead of repair it will be replacement time ! Dont forget the the fact 15% looses 30% MPG now you are adding 30% more fuel to get the same distance ! So now you have increased the Nations fuel needs by 30% over normal requirements … What a joke !

        • says

          First off we’re not talking E-85 but the E-10 mandated at the pumps – that’s 10%, not 15% or more. Unless you’re running small engines from twenty years ago you already have plastic fuel tanks and carbs modified for ethanol fuels.

          I fully agree that ethanol fuels decrease fuel mileage, but remember in the northern climates ethanol has been added to gasoline for many years to eliminate the problem of water condensing in the fuel tank. In small quantities it just isn’t harmful.

          Let’s get rid of ethanol in fuels because it’s just not a good idea for adding it in quantities of 10% or more. But making false claims hurts our argument, not helps it.

          • says

            “First off we’re not talking E-85 but the E-10 mandated at the pumps” There is NO mandate for E10 at the pumps. The fact that all of our gasoline is E10 is an unintended consequence of a flawed federal act. EISA 2007 is not a mandatory E10 law. Only four states still have mandatory E10 laws, yet we will have E10 everywhere by next year and billions of gallons of ethanol mandated with no gasoline to put it in unless they make E85 which was the intent of the act.

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