Power by People: ACE discusses the next chapter for ethanol

By Katie Fletcher | August 05, 2014

Power by people; a simple slogan with the hopes of executing the complex task of changing the way people fundamentally think about the ethanol industry. Brian Jennings, executive vice president of the American Coalition of Ethanol, announced ACE’s new campaign as “a fundamental change in how we do and think about this industry.” ACE’s morning conference session included comments from Jennings and other ACE leadership, Ron Alverson, president, and Ron Lamberty, senior vice president.

The comments given by ACE leadership as a whole echoed the opening remarks from Gov. Dayton expressed the evening prior. The echoing comments encompass hopes for higher ethanol blends to become available at the pumps, abandonment of the “blend wall excuse” in Congress and to get a final 2014 renewable fuel standard (RFS) rule  that preserves the integrity of the program. “Our opponents want to make the 2014 RFS debate about the numbers, and unfortunately so do some in Washington,” Jennings said. “It’s not about the numbers, it’s about the methodology used to determine the final numbers.”

He called people to action to utilize the positive out of the 2014 RFS delay, which is more time to encourage the White House to “ditch the blend wall excuse,” Jennings said. “Capitalize on the power you have, your inspiring stories, but also your vote.”

Jennings believes ACE is in a unique position to tell people’s stories, and subsequently launched a campaign to do just that. A new website was created, as well as a host of videos, but ultimately the campaign is about using the power of the people within the industry. ACE came to a few conclusions after taking “a long, hard, sober look in the mirror,” Jennings said. The two conclusions are: change is needed for a better result, and the realization to put the most important asset of the industry on the playing field, the people.

“The story of ethanol is about people,” Jennings said. “We’re going on offense by capitalizing on the inspiring profile, the courage, the stories, the authenticity of people like you deliver, and the important economic benefits you deliver for not just your own communities, but for the nation as a whole.”

Lamberty, mentioned some of the challenges of E15, one of the bigger challenges being liability. “People are scared into believing they can’t use it,” Lamberty said.

Equipment additions and conversion kits for use at existing stations was also mentioned. “Stations can convert to E15 for between $1,000 and $2,500,” Lamberty said. “This is all doable as far as the pumps go.”

After comments from ACE leadership, Dean Drake, president of DeFour Group LLC and prior engineer at General Motors, discussed predictions of the next chapter for ethanol blend fuels. His presentation was highlighted by a study conducted by the company Drake founded and a few others evaluating the cost of RFS, comparing RFS to corporate average fuel economy (CAFE) standards and estimating costs and benefits of new fuel. “E10 is the new regular, its 6 cents per gallon cheaper than 87 AKI gasoline on energy equivalent basis,” Drake said. “Our study showed it saved consumers about $8 billion in 2013.”

Drake mentioned how automakers want higher-octane levels, and he proposed a new fuel blend to accomplish this. The fuel is an affordable high-octane fuel; Drake coined the fuel eco-performance fuel, made from proven components base E10. The EPF would get to 98-research octane number (RON), approximately 93 AKI. “It improves engine performance by allowing higher compression ratios, enhancing combustion,” Drake said. “Advanced vehicles plus EPF would have equal or better fuel economy, and produce two times the engine torque than todays vehicles running on E10.”

Other benefits he listed in his presentation include viewing it as potentially better for oil companies and the ethanol industry. “It would not require changes to refineries or distribution network, it raises the blend wall and opens up new opportunities for the ethanol industry, such as additional direct to retailer potential,” Drake said. “It offers a lower cost fuel to customers, replaces low seller (premium) with high volume product (EPF).”

The early morning comments concluded with updates from U.S. EPA given by Paul Machiele, center director forfuel programs in the assessment and standards division of EPA. In reference to the 2014 annual standards, Machiele said “it is an incredibly important rulemaking for us, and you, and we are working on it as hard as we can to get it out the door.”

The 2015 annual standard is something that would have normally been proposed by now, but will wait until the 2014 rule making is out the door. Machiele did say that the 2015 will follow suite quickly after the 2014 rule making, but will depend on how much time is needed for the 2014 standards litigation.

The EPA has not yet finalize standards for higher level ethanol blends, and one member in the crowd expressed concerns by claiming the EPA is telling standard auto owners that blended fuels will harm engines and hurt warranties. “The EPA has to look from an emission standpoint, will that vehicle cause it to violate emission standards,” Machiele replied.

Another concern was over the impediments around the Reid Vapor Pressure. Machiele says that the EPA is focusing their efforts on GHG emissions across the whole transportation sector and has to work on implementing the statute. “We will continue to have dialogue since E15 has come on scene,” Machiele said. “It’s not us trying to put up road blocks, we are trying to move forward.”