An Opportunity to Show Ethanol’s Edge

By Brian Jennings | March 05, 2012

 Despite it being an election year, we cannot expect a bitterly divided Congress to agree on how to relieve the pain at the pump for consumers. And while there is no easy, silver-bullet solution to fuel price woes, the American Coalition for Ethanol has been pointing out that the Obama administration can take steps to help that do not require congressional approval by relying on American ethanol.

First, with E15 market ready in many states, the U.S. EPA ought to ensure summer Reid vapor pressure (RVP) limitations do not stand in the way of consumers having access to the most affordable fuel available for most cars. As of this writing, wholesale ethanol prices are nearly 80 cents per gallon less than gasoline prices. E15 could save drivers approximately 12 to 15 cents per gallon versus straight gasoline in many markets. With the “summer driving season” on the horizon, EPA should ensure E15, a homegrown source of clean octane at a remarkably affordable price, remains unleashed to help consumer pocketbooks. The alternative—blocking consumers from access to E15 just when fuel demand and prices routinely begin to climb, based on obscure RVP red tape—would be economically and politically unwise.

Second, EPA and the National Highway Traffic Safety Administration have a historic opportunity to capitalize on proposed rules to provide additional fuel price relief to Americans while reducing pollution. Earlier this year, ACE wrote to these federal agencies with recommendations on how ethanol’s clean octane could help achieve their proposed corporate average fuel economy (CAFE) and greenhouse gas (GHG) standards. The purpose of the CAFE-GHG rule is to require vehicles to reduce fuel use and tailpipe emissions between 2017 and 2025, so it will have an enormous impact on the future of fuel use, including ethanol.

ACE’s recommendations essentially encourage the agencies to continue providing automakers with incentives to make flex-fuel vehicles (FFVs) and to recognize that ethanol’s clean octane benefits can help reduce petroleum use, harmful tailpipe emissions and pump prices. As it stands today, EPA and NHTSA’s proposed rule discourages FFV production. While it provides generous incentives for electric and fuel cell vehicles, it would phase out FFV credits. The agencies are expected to issue a final rule this summer and we are working with others to encourage EPA and NHTSA to provide a level playing field for each vehicle technology.

Meeting the ambitious fuel economy goals proposed in the rule will require automakers to modify engines in a way that will put a premium on octane. There are two principle ways to boost octane in internal-combustion engines.  One, add more ethanol.  Two, increase the use of petroleum-based aromatics. While aromatics are considered hazardous air pollutants and are the most expensive ingredients in gasoline, ethanol is the most affordable and cleanest source of octane. For the past three years, toluene prices (benzene, toluene, and xylene are the primary aromatics) have exceeded ethanol prices by between 70 cents and $1 per gallon. Since aromatics come from crude oil, as oil prices rise, so does the cost of aromatics.

Ethanol has done more to reduce petroleum prices, use and greenhouse gas emissions than any alternative fuel in the past quarter century. ACE believes there is an even greater opportunity today, based on ethanol’s price and octane supremacy over petroleum-based aromatics. In other words, today Americans are spending more at the pump to increase air pollution. It doesn’t have to be that way. We can spend less and clean the air with more ethanol.

Author: Brian Jennings
Executive Vice President,
American Coalition for Ethanol
(605) 334-3381