CleanMPG Forums - Biotech Industry Weighs In On Possible “Renewable Fuel Standard” Repeal

Typical back it or the world will come crashing down… All the while most US car owners pay an additional 2 to 3% more at the pump let alone 3 to 4% more for a possible future E15 mandate.

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Wayne Gerdes - CleanMPG - Aug 19, 2012

Approved E15 label – If you see this, watch your wallet... Think of it as a 4% or even more tax on what you could have been paying without RFS in most cases today. What it will do tomorrow is anyone's guess?

What is the Renewable Fuel Standard (RFS)?

The RFS program was created under the Energy Policy Act (EPAct) of 2005, and established the first renewable fuel volume mandate in the United States. As required under EPAct, the original RFS program (RFS1) required 7.5 billion gallons of renewable- fuel to be blended into gasoline by 2012.

For information on 15 % volume of ethanol in gasoline (E15), consider the E15 webpage. For all 40 CFR Part 79 waiver notices including those related to E15, consider the Fuels and Fuel Additives Registration Notices website.

In a release from the Biotechnology Industry Organization (BIO) this past week regarding maintaining the Renewable Fuel Standard (RFS), the organization states that it provides the fundamental foundation driving private investment in America’s advanced biofuels industry. With formal requests from governors Bev Perdue (D-N.C.) and Mike Beebe (D-Ark.) that the Environmental Protection Agency waive the Renewable Fuel Standard for 2012, the BIO groups are in DEFCON 4 mode.

According to BIO’s Industrial & Environmental group, companies across the US have made substantial long-term investments in bringing advanced biofuel research and development to the point where it is beginning to make real contributions to U.S. energy security. The biofuel and biotechnology companies rely on the federal Renewable Fuel Standard to guarantee that the U.S. fuel market will be open to domestic alternatives to foreign oil.

What was not said was at what cost to the American taxpayer given the lower energy content and more fuel purchases required to go a given mile.

A spokesperson for the group added that the first commercial gallons of cellulosic biofuels were produced this year and the first large-scale biorefineries are set to begin production soon, adding to those gallons. Additional large-scale biorefineries are under construction, planning to begin production over the next few years.

And yet not a single word was released regarding costs or actual fuel reduction(s) due to this technology being fronted.

Additionally it was stated that the “potential” for additional job creation and rural economic development from advanced biofuel production remain strong, as long as the RFS remains stable.

How many years of $Billions is subsidies has to be spent for this potential to be realized. I for one am sick of losing that 2 t o3% and having to pay for this groups exuberant income(s) at my expense.

Adam Monroe, President of Novozymes North America and Chairman of BIO’s Industrial & Environmental Group added:

Quote:

“Novozymes has its North American headquarters and hundreds of employees in North Carolina. But this choice is the wrong path. All it’s doing is adding to the fear and public misconception about U.S. energy.

The Renewable Fuel Standard has encouraged farmers to increase the amount of corn for feed, food and domestically made fuel in the U.S. – and it’s now leading to advanced biofuels from agricultural waste and even household trash. It’s created thousands of jobs – from scientists, engineers and factory operators to construction workers and farmers – allowing people to support their families and the country. And it’s bipartisan, first signed by President George W. Bush and still supported today.”

Ra Ra Ra!!! And at the grocery store what used to be 5 to 10 ears for a $1 I am seeing 2 to 3 ears for the same buck. There is no guarantee that the RFS had anything to do with natural supply and demand givne the droiught conditions however. Yet still I keep providing another 2 to 3% of my fuel expenditures to Mr. Monroe’s pet project(s). Mr. Monroe, I cannot afford your jobs program anymore! Your group has had 7 + years on the government dime via RFS and nothing to show for it but a single pilot plant?

Under the Energy Independence and Security Act (EISA) of 2007, the RFS program was expanded in several ways:

EISA expanded the RFS program to include diesel, in addition to gasoline
EISA increased the volume of renewable fuel required to be blended into transportation fuel from 9 billion gallons in 2008 to 36 billion gallons by 2022
EISA established new categories of renewable fuel, and set separate volume requirements for each one
EISA required EPA to apply lifecycle greenhouse gas performance threshold standards to ensure that each category of renewable fuel emits fewer greenhouse gases than the petroleum fuel it replaces

RFS2 is supposed to lay the foundation for achieving significant reductions of greenhouse gas emissions from the use of renewable fuels, for reducing imported petroleum, and encouraging the development and expansion of our nation's renewable fuels sector. It is doing the latter to the tune of ~ 2.5% of the price of every single gallon of gasoline laced with Ethanol sold in the US today. That is a lot of gasoline!

According to the EIA, the US consumes approximately 367.08 million gallons/day at an average price of $3.72/gallon or $1.365 billion USD.

Without the US gasoline supply being tainted with E10, we could instead consume approximately 357.90 million gallons/day at $3.72/gallon or $1.331 billion USD.

While there is a lot more detail than my simple back of the envelope costs posted, RFS appears to cost the US consumer a small sum of only $34.13 million USD/day give or take a few million $USD. But who's counting?