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How to Break Through the Blend Wall

By now you have probably heard that the EPA has postponed issuing guidelines on whether to allow ethanol blends of higher than 10% into the gasoline pool. Going up to 15% ethanol blends would allow ethanol producers to put a lot more of their product into the market, which is currently bumping up against the limits of the current 10% ethanol blend allowance.

Ethanol producers and proponents have assured us that the higher blends will not damage engines. Small engine makers and boaters are very worried that the higher blends will damage their engines. In fact oil companies, having been mandated to use ethanol, are now facing a class action lawsuit over ethanol blends damaging boat motors. Even the auto industry has voiced concerns that they could be liable if the higher ethanol blends damage engines.

So how to break this impasse? A reader forwarded a link to a letter that appeared in the Financial Times that I think proposes a reasonable solution. The ethanol industry will be the main beneficiary of raising the amount of ethanol that can be blended. Since they are also the industry who has requested this increase, have them assume the liability if anything does happen. If they are correct and there are no problems, then they have nothing to worry about. If they are incorrect, then they can pay for the fallout instead of having it fall to the oil companies, car companies, and small engine makers.

How to do this? I think you have to get an ethanol trade organization like the Renewable Fuels Association to step forward and say “We are prepared to accept the liability risk for the potential reward.” Because the potential liability could be enormous, that would probably also need to be backed up by the U.S. government.

I think it is a reasonable suggestion that those who are proposing this change and who stand to benefit should accept any potential liability. But my guess is that the EPA will ultimately rule in favor of increasing the ethanol blends anyway, and the ones who reap the reward aren’t going to be the ones stuck with the bills if there are unforeseen problems.

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December 8, 2009 - Posted by | blend wall, EPA, ethanol, litigation

61 Comments

  1. I think you have to get an ethanol trade organization like the Renewable Fuels Association to step forward and say "We are prepared to accept the liability risk for the potential reward."Robert~Good idea, but if Bob Dinneen were to say that, I suspect he would soon be out of a job. 😉

    Comment by Wendell Mercantile | December 8, 2009

  2. Well, all those older Brazilian cars seem to do okay on 26% Ethanol; so we'll probably be fine on E15. Don't you imagine?

    Comment by rufus | December 8, 2009

  3. Actually, there would be very little E15 sold the first four, or five years. It would be impossible to do "very much" damage before any problems come to light.

    Comment by rufus | December 8, 2009

  4. So Rufus, is that a vote for the ethanol industry accepting any potential liability?RR

    Comment by Robert Rapier | December 8, 2009

  5. The obvious solution: Subsidize E85 to the point where it makes sense for the rational consumer (who is able to do so) to use it…

    Comment by Optimist | December 9, 2009

  6. The obvious solution — remove all mandates & subsidies and let human beings decide for themselves.

    Comment by Kinuachdrach | December 9, 2009

  7. To be practical — look at the chain of command. Democrats rule the US, and Trial Lawyers rule the Democrats.What trial lawyer is going to give up the chance to sue deep-pocketed oil companies in exchange for the ability to sue a bunch of under-capitalized subsidized money losers in the ethanol industry?It is no way to run a railroad. But until the ordinary Democrat wakes up and does something about the wealthy elites who have taken over his Party, this is the way it is going to be.

    Comment by Kinuachdrach | December 9, 2009

  8. This one seems to have left the ethanolistas a mite speechless.

    Comment by Anonymous | December 9, 2009

  9. So Rufus, is that a vote for the ethanol industry accepting any potential liability?I guess so, Robert. If there are significant problems the industry is finished, anyway. There won't be, of course. Again, we just look to Brazil, and observe what happened there. ie Nuttin.We're not all "Rocket Scientists," here, but we're all smart enough to know that there's not much difference between 10% ethanol, and 15% ethanol. It's pretty much a "political" thang.

    Comment by rufus | December 9, 2009

  10. I think you're being unfair. I've no doubt the ethanolistas will be happy to underwrite the risk … as long as any payouts are heavily subsidised 🙂

    Comment by PeteS | December 9, 2009

  11. Actually, all you're going to have for the first three, or four years is some E11, and E12 in a few places. There just isn't enough ethanol in the pipeline to do any more than that.

    Comment by rufus | December 9, 2009

  12. Is that like a vaccination Rufus … car engines will build up some sort of immunity before they graduate onto the "hard stuff"?

    Comment by PeteS | December 9, 2009

  13. For those unable to handle fueling an ICE, move to the city, get an apartment and let the nanny state take care of you.Obviously if you have trouble stay of the waterways. Step off land and you give up certain constitutional rights because maritime law takes over. Screw up and you are guilty until proven innocent. Twice I have had to come to the aid of boaters who put others at risk without ever bothering to learn about how their boat works. And it is not that hard. Problems have been occurring with infrequently used ICE long before ethanol. What RR is suggesting and has become common in our society is that individual responsibility is no longer important and our choices should be based protecting the terminally stupid.

    Comment by Kit P | December 9, 2009

  14. Nah, Pete; car engines, and fuel systems, have been engineered, since the seventies, to accomodate ethanol. They weren't designed to handle 10%, and melt with 15%.Again, Brazil. It's all political.

    Comment by rufus | December 9, 2009

  15. I still wonder if a better way to go is to run a parallel system o all ethanol vehicles. Obviously, ethanol works, see the Indy 500.Mixing it into gasoline seems to cause problems.An all-ethanol PHEV strikes me as a potent symbol of American independence, and a way to crush OPEC anmd oil-thug states for good. If Rufus is right, and ethanol can be profitably sold at retail for $4 a gallon at retail, it seems like energy indpendence is close to reality.The GM Volt can go 40 miles on the charge, and improvements in lithium batteries promise to double that.If a driver gets 60-80 miles on a charge, then paying $4 or $6 for gallon of ethanol will be a minor matter. How many gallons would such a driver use in a year?BTW, people who say USA energy independence is simply impossioble must be running-dog lackeys of OPEC and oil-thug states.

    Comment by Benny BND Cole | December 9, 2009

  16. Opening the door to the fuel manufacturs paying the bill will cause every idiot who doesn't change his oil or any auto manufacturer who doesn't want to take responsibility for their work by default push it to the fuel supplier first to see if they can get them to pay. I don't think this is workable. On a seperate point, my mechanic feels that the gas blend causes the mystery polution sensor light to go on and is fixed only by resetting it.Jim Takchess

    Comment by JIMj | December 9, 2009

  17. In a comment following the previous post, Maury made the following observation:we got 920,000,000 more gallons of refined fuel this sept. than we did 10 years ago….from fewer barrels of oil. If ethanol is providing enough extra fuel to fill up 92,000,000 civics each month,I would call that meaningful.I didn't have time to take an immediate look, so he declared premature victory.As I told him, I would get to it when I could, adding "based on your previous entries I suspect you are missing something in your analysis above."It did not come as a surprise to find that he was missing something from his analysis. Right out of the gate, there is no way I would use a single month to make such conclusions. Inventories can change a lot over short periods of time, distorting results. So any snapshot you take needs to be at least six months, but probably a year to cover seasonal changes and turnaround seasons. So that's Problem 1.Problem 2 is failure to take into account all of the coking and hydrocracking capacity that has come online in the past 10 years. Yes, I would expect that we are getting more barrels of refined products from fewer barrels of oil because a lot of what ended up as roofing tar in 1999 is now being run through cokers and ending up as gasoline. A lot of the fuel oils with sulfur are being run through hydrocrackers/treaters and ending up as gasoline or diesel. You can in fact see this by looking at the yields of asphalt over his time horizon. In September 99, Maury's starting point, the yield of asphalt was 3.4%. In September 09 the yield was 2.2%. You will see similar shifts in other products. As I said, I don't like taking 1 month snapshots, but it is clear that even when you average the yields over the course of a year, the product mix has shifted due to refiners putting in different equipment. Maury was ready to give all the credit to ethanol for the yield improvements.Hope that clarifies for you Maury that the refining picture is much too complicated for a cursory analysis. In fact, my analysis above peeled the onion a couple more layers, but there is a lot of onion to be peeled.RR

    Comment by Robert Rapier | December 9, 2009

  18. I don't think this is workable.Jim, that's what we have now. Oil companies are getting sued for boaters using ethanol blends and ruining their motors. I would just like to see the liability end up where it should if there is a problem.RR

    Comment by Robert Rapier | December 9, 2009

  19. rufus wrote near the end of the previous thread: Here's what I think: At $4.00 gasoline, none of this matters. At $2.00 gasoline, none of this matters. Only at levels between $2.00, and $4.00 does this matter. Not sure what "this" means… cost differential? EROI? Depleting aquifers? Risk of major weather events?But assuming it means cost differential, according to e85prices.com on July 6, 2009, the average gasoline price was $4.07 and the average E85 price spread was 17.9%.http://web.archive.org/web/20080706030135/http://e85prices.com/But you lose more than 17.9% of your mpg going from gasoline to E85 in your FF Impala. So historically, even at over $4.00 per gallon gasoline, E85 cost more per mile. For the 96% of vehicles on the road which are non flex-fuel, the price spread has to reach 25% before ethanol becomes cheaper per BTU.

    Comment by Clee | December 9, 2009

  20. To all ethanol proponents, does it not worry you, if say weather patterns change & we end up with a year, or several, of extremely low corn yields? To me, relying on a crop for our fuel is extremely risky, assuming it would even work. OD

    Comment by Anonymous | December 9, 2009

  21. "but there is a lot of onion to be peeled."Add 10% volume to anything,and you'll have 110% Robert. I don't know why 920,000,000 gallons would surprise you. That's about how much ethanol is added each month.Enough to refuel 92,000,000 small cars,or 46,000,000 full size vehicles. Not an insignificant number by any stretch of the imagination.You declared that ethanol didn't reduce imports. True. But,we'd be importing another 500,000 bpd(mileage penalty included) without it. That's because the economy has grown,despite the last year and a half of difficulty. As a result of ethanol,we're getting more fuel from less oil. Quite a bit more. I worked the numbers for other months. I posted september's results,because it was the last month available. And yes,it's a lot of calculating,and a lot of rounding. A few thousand tankfulls in one direction or the other won't change the result though.

    Comment by Maury | December 9, 2009

  22. The occasional carburetor overhaul won't kill a multi-billion dollar industry. So yes,the ethanol industry should take responsibility for any damage. It would be good PR,if nothing else.

    Comment by Maury | December 9, 2009

  23. Add 10% volume to anything,and you'll have 110% Robert.This is where your lack of science background will get you in trouble. That statement is not true in a number of cases. If you add 10 mls of sulfuric acid to 100 mls of water, you do not get 110 mls. There are other things at play.It also isn't true if you have a loop in which part of the "110%" is recycled into producing the initial 10% – as is the case with ethanol. If there is enough recycle, you will find that 100% + 10% could even equal less than 100%. It isn't rocket science, but it is more complicated than your 100 + 10 = 110.In the case of the 920,000 gallons, I told you where some of it came from, but you apparently don't believe me (even though you can check those numbers yourself).I don't know why 920,000,000 gallons would surprise you. That's about how much ethanol is added each month.Numbers don't surprise me, but your conclusion from that number does. Maybe it shouldn't. But your conclusion is wrong. Further, I have already shown that taking everything into account – including the changes in demand due to the economy – you can't see the impact from ethanol. You certainly can't see 920,000,000 gallons a month. You aren't addressing the data, you are saying If A, then B must be true. I went straight to the data and said that we already know what B is. So if your argument doesn't line up with that, there is a problem with your argument.RR

    Comment by Robert Rapier | December 9, 2009

  24. "Further, I have already shown that taking everything into account – including the changes in demand due to the economy – you can't see the impact from ethanol"That's misleading Robert. Ethanol didn't reduce oil consumption. At least not by much. But,it did keep that consumption from increasing by 500,000 bpd. You'll see that when you're through working the numbers.

    Comment by Maury | December 9, 2009

  25. That's misleading Robert. Ethanol didn't reduce oil consumption. At least not by much. But,it did keep that consumption from increasing by 500,000 bpd. You'll see that when you're through working the numbers.You must have forgotten that I did work through the numbers. I spent 3 essays and probably 5,000 or more words working through the numbers. I dealt with exactly the situation you described above in excruciating detail. I think you better go back and spend some time trying to understand what I wrote before suggested I work the numbers. I can say emphatically that what you wrote above is false. I have turned the numbers inside and out, and I dealt with consumption with ethanol, and consumption without ethanol. Your argument is completely superficial relative to what I have already done with the numbers.RR

    Comment by Robert Rapier | December 9, 2009

  26. By the way, I even linked to the spreadsheet containing all the raw data, so feel free to dig through and find an error in either the data or my methodology. But if you think you found something, I expect you to be very explicit and numerical – not throw wild accusations like "you changed the methodology."RR

    Comment by Robert Rapier | December 9, 2009

  27. Clee, good point. However, Corn was a truly anomalous situation last year. People, not familiar with agriculture, saw the floods, and assumed the corn harvest was ruined. I warned them that this happens about every 15 years, and that the corn harvest was likely to be "just fine." It was, and the commodity players (some of the novices among them, anyway) lost their shirts. More than a few "ethanol" refineries were in that group.The point is, it was a situation that is very unlikely to be repeated any time soon. We've had the nastiest, wettest, longest harvest in decades this year, and corn topped out around $4.10, or so.I feel confident in predicting that the next time gasoline hits $4.00 +, corn will be selling for less than $4.00 (which will normally put ethanol in the $2.00 – $2.25 range.You have to give credit for the fact that due to "growing pains," etc the market has been in quite a flux the last several years. You have to be careful extrapolating into the future w/o a pretty good knowledge of the fundamentals of the bidness.

    Comment by rufus | December 9, 2009

  28. Maury, keep in mind that some oil that would have gone from gasoline production could have been moved over to Diesel, or Jet fuel. Also, the biobutanol that was going to MTBEs might have gone toward Propane, or used for some other purpose.Also, keep in mind the nat gas that was being used to produce MTBE might offset a lot of the nat gas that went toward ethanol production. Also, we had a deal with Brazil to "Trade" jet fuel for ethanol. How was that accounted for. Lotsa luck.

    Comment by rufus | December 9, 2009

  29. Kit P, nicely illustrating the ethanol boosters 1. arrogance 2. go to hell attitude toward consumers and 3. ignorance of technical issues, says,For those unable to handle fueling an ICE, move to the city, get an apartment and let the nanny state take care of you.The problem is not the consumers ability to put fuel into their vehicle. The problem is corn growers and ethanol producers want to force consumers to buy gasoline so adulterated with ethanol it will cause physical damage to their equipment. Kit P complains about the nanny state and then demands more of it for the ethanol producers. Duracomm

    Comment by Anonymous | December 10, 2009

  30. Rufus says, car engines, and fuel systems, have been engineered, since the seventies, to accomodate ethanol. They weren't designed to handle 10%, and melt with 15%.Again, Brazil.It's all political.What is all political is the demand by ethanol producers for consumers to be forced to buy gasoline adulterated with ever increasing amounts of ethanol.Protecting consumers from ethanol damage is not political at all. AAA Calls for the EPA to Reject Petition to Increase Ethanol Content in Gasoline to 15 PercentSpecific areas of concernAfter reviewing the petition, AAA identified the following areas of concern:Potential negative impact on vehicle exhaust emissions Degradation of engine operability in cold start-up conditionsThe potential to cause catastrophic engine damageSystem component damageOlder vehicles are not designed to run on ethanol and would unquestionably experience poor drivability and reduced engine reliabilityCatalytic converters could be impacted by the increased temperatures caused by the higher alcohol content in the fuel Vehicle warranty and service agreement issuesE15 will reduce the fuel efficiency of the vehicles in which it is used – The lower fuel economy combined with depressed residual value will substantially increase the costs associated with owning and operating a vehicle.

    Comment by Anonymous | December 10, 2009

  31. Comment with link to AAA statement opposing increase in ethanol levels was by DuracommDuracomm

    Comment by Anonymous | December 10, 2009

  32. Brazil

    Comment by rufus | December 10, 2009

  33. For once, I fully agree with RR ; )Unlike American cars, cars in Brazil where ethanol blends have been 22% since 1993 are all designed to run on that higher blend. According to Wikipedia:http://en.wikipedia.org/wiki/Common_ethanol_fuel_mixtures#E20.2C_E25"..All Brazilian automakers have adapted their gasoline engines to run smoothly with these range of mixtures, thus, all gasoline vehicles are built to run with blends from E20 to E25, defined by local law as "Common gasoline type C". Some vehicles might work properly with lower concentrations of ethanol, however, with a few exceptions, they are unable to run smoothly with pure gasoline which causes engine knocking, as vehicles traveling to neighboring South American countries have demonstrated.."Corn Ethanol Shuts Down Police Cruisers

    Comment by Russ Finley | December 10, 2009

  34. "By the way, I even linked to the spreadsheet containing all the raw data, so feel free to dig through and find an error in either the data or my methodology."Maybe I'm using the wrong version of windows or something,because it looks like gibberish on my computer Robert. I honestly don't understand your methadology,or how we can come to two radically different conclusions using the same data. I tried until my head hurt. I'm just never gonna get it,I guess.

    Comment by Maury | December 10, 2009

  35. The Brazilians are, probably, taking advantage of ethanol's higher Octane by building the newer cars with higher compression ratios. This would give them more power, and higher fuel efficiency on higher ethanol blends. It could, also, cause them to knock on pure gasoline. The older cars that were running on lower ethanol blends, or pure gasoline, before the introduction of higher blends would run just fine on either.There's about enough ethanol in the pipeline to provide E11. It would be several years before enough cellulosic ethanol is brought to market to get up to E12.It will take at least five years to get anywhere near E15. If any problems were to develop it seems like we'll have plenty of warning.

    Comment by rufus | December 10, 2009

  36. "It will take at least five years to get anywhere near E15"Don't be so sure Rufus. Monsanto says corn yields will top 300 bushels per acre in 20 years. If it happens,that's 4X the average annual yield gain of 1.6 bushels we've seen for the last 80 years. What will we do with 560 million additional bushels each year? Yields have increased 28% in the last 10 years. That allows us to process 30% of the corn into ethanol and still have 1.5 billion more bushels of livestock feed than we had in 1999.

    Comment by Maury | December 10, 2009

  37. "What will we do with 560 million additional bushels each year?"Not to worry — by the time the EPA has finished with its "CO2 is poison" nonsense (based on what is now clear to have been bastardized science), farmers will be back to spreading manure with shovels and the US will be a Third World basket case where hungry unemployed people freeze in the dark. Thanks, Obama. As the Norwegian Nobel Prize crowd might have said, 'he creates a desert and calls it Peace'.

    Comment by Kinuachdrach | December 10, 2009

  38. "Yields have increased 28% in the last 10 years."A ten year trend line isn't long enough:http://www.agry.purdue.edu/Ext/corn/news/articles.06/YieldTrends-0615.htmlWorld population is going to increase 50%. Food production will need to keep pace. The number of chronically hungry has just passed one billion for the first time.Those of us with kids can empathize with parents of children with swollen bellies. One could easily argue that it's immoral to put corn into gas tanks:http://home.comcast.net/~russ676/photo/ethcartoon.JPGAccording to the following article in Nature, the planet's nitrogen cycle is already way out of balance:Transgressing identified and quantified planetary boundariesWhy can't farmers stand on their own two feet like other businessmen? Corn exports help with trade imbalances as do limiting oil imports:The Myth of the American Farmer

    Comment by Russ Finley | December 10, 2009

  39. Transgressing identified and quantified planetary boundaries

    Comment by Russ Finley | December 10, 2009

  40. Baltimore is not the only city that has had problems using ethanol in their police cars: Albuquerque Police Abandon Use of E-85The City of Albuquerque is quietly abandoning part of its push for a greener Albuquerque after finding that E-85 powered vehicles are not all they are cracked up to be. The city found they cost more to run and to keep running.

    Comment by Wendell Mercantile | December 10, 2009

  41. Rufus-Why not all-ethanol cars? A parallel system? It would be nice to see farmers drive ethanol tractors, combines too. An ethanol-PHEV seems to kill many birds with one bullet.

    Comment by Benny Boom, No Doom Cole | December 10, 2009

  42. It would be nice to see farmers drive ethanol tractors, combines too.I agree Benny. Farmers should be out in the lead using all-ethanol farm equipment. (Ethanol plants should also be using ethanol-powered trucks to ship their product to wholesalers and retailers.)Big Ag (NCGA) and Big Ethanol (RFA) should have long ago been requesting that farm implement companies start manufacturing ethanol-powered ag equipment.A farmer who uses an ethanol-powered corn picker would be on much higher moral ground when he or she starts demanding that the rest of us have to meet mandates for higher blend walls.It doesn't make me happy to see the NCGA want the rest of us to use ethanol when virtually all of their farmer members use diesel-powered equipment.They should have done it long ago, if for no other reason than to prove they can grow corn and turn it into ethanol without using any fossil fuel inputs. They keep saying they can, but they are mighty reluctant to attempt to prove it.

    Comment by Wendell Mercantile | December 10, 2009

  43. This discussion on E15 seems premature to me. Have we really hit a "blend wall" at E10? According to US EIA numbers, we are only blending ethanol into motor gasoline at about 7.5 vol% nationally. The reason we aren't blending more is due to lack of blending capacity. But there are several new blending facilities across the country that will be coming online over the next couple years. As the blend rate approaches 10%, ethanol producers will see a 33% increase in demand – without any E15 blending. Let's see if they can meet all that new E10 demand, then we can start talking about E15.

    Comment by Anonymous | December 10, 2009

  44. For those unable to handle fueling an ICE, move to the city, get an apartment and let the nanny state take care of you.Tell you what, Mr. Toughguy Heartland: why don't you use all the ethanol you produce in the heartland where it makes the most sense (i.e. in the heartland) and leave the nanny state off our rugged individualist backs.Once you've proven what a great fuel ethanol is, and how little damage it does to your engines, maybe we'll buy some, assuming the price is right. Don't call us. We'll call you…And Rufus, maybe you should consider emigrating to the wonderland of Brazil.

    Comment by Optimist | December 10, 2009

  45. Maybe I'm using the wrong version of windows or something,because it looks like gibberish on my computer Robert. I honestly don't understand your methadology,or how we can come to two radically different conclusions using the same data.It really isn’t that complex Maury. As I said before, I don’t think you really want to get it. Be honest with yourself. If it were true that ethanol was having no impact on oil consumption, is that something you would really want to know? I suspect if you are honest, the answer to that is “No.”Here was the methodology in a nutshell. Take a starting point and an ending point. In that first essay, I chose 2002 – just when ethanol started to ramp – and 2007 – before the impacts of the recession hit. I looked at demand, U.S. production, and imports in 2002. Then I looked at the change in demand (which contains the ethanol numbers), the decline in U.S. production (which would impact how much needed to be imported), and the ramp up of ethanol.Here is a simple example to illustrate. If demand grows by 1 million bpd and U.S. production falls by 1 million bpd, then imports would need to go up by 2 million bpd – unless ethanol is having an impact. If ethanol is having an impact, then imports would need to go up by less than 2 million bpd. It isn’t rocket science, and it is clearly explained under the “Methodology” section of the first paper. Now which part are you still having trouble with?RR

    Comment by Robert Rapier | December 10, 2009

  46. Okay, here's the numbers: Current Capacity – 13,131,400,000Current Production – 11,930,400,000Plants under Construction – 1,432,000,000From HereWe finish building out all existing construction, and we have 14,563,400,000 gallons/yr.This was assumed to be, almost, exactly 10% of fuel consumed. It might come out to just a "smidge" over 10%. Remember, Corn ethanol is held, by statute, to 15 Billion Gpy. So, although you might see two, or three more corn plants, "Corn" ethanol is, basically, saturated.The push to raise the "voluntary" blend limit is a result of two things.1) With current reduced demand for gasoline we could end up with a little (maybe, 1 billion) more ethanol than could be absorbed with a strict 10% limit.2) We will need some place to put the "Cellulosic," and "Advanced" ethanol that will start dribbling onto the market in a year, or so.Maury, the fact that it will take a minimum of five years, or so, to achieve anywhere near E15 in NOT a function of corn available. It's, entirely, a matter of the time it takes to bring new cellulosic, and advanced facilities online.Anon, I fought in foreign wars for this country, and paid taxes in it for over forty years. I think I'll stay here, and enjoy my social security.But, thanks for the tip, though.

    Comment by rufus | December 10, 2009

  47. Kit P complains about the nanny state and then demands more of it for the ethanol producers.You will find that Kit often talks out of both sides of his mouth, and tries to work in stories to show everyone that he excels where others fail. This time it was boating. RR

    Comment by Robert Rapier | December 10, 2009

  48. Remember, Corn ethanol is held, by statute, to 15 Billion Gpy.Of course as you are certainly aware statutes can be changed, and the ethanol lobby has already asked to have that 15 billion gal/yr raised.RR

    Comment by Robert Rapier | December 10, 2009

  49. "They keep saying they can, but they are mighty reluctant to attempt to prove it."That's not fair Wendell. John Deere and Kubota won't even allow biodiesel concentrations higher than 5%. Farmers can't jump on an ethanol-fueled tractor,because nobody will make one. I want a car that runs on natural gas. Lots of people do. Honda is the only manufacturer that sells one though….and only in California and New York.

    Comment by Maury | December 10, 2009

  50. "I looked at demand, U.S. production, and imports in 2002. Then I looked at the change in demand (which contains the ethanol numbers), the decline in U.S. production (which would impact how much needed to be imported), and the ramp up of ethanol."Robert,I'm never going to see what you want me to see. I strained my eyes until I got headaches. I think it's a lot easier to tell ethanol's impact by comparing crude inputs and finished product from different years. Trying to figure ethanol's impact using domestic production,import and export numbers,and demand figures from only years where the economy grew strongly is too much like three card monte for me.

    Comment by Maury | December 10, 2009

  51. Farmers can't jump on an ethanol-fueled tractor,because nobody will make one.It is fair Maury. Has the NCGA or RFA ever gone to the major farm equipment makers and said, "If you build ethanol-powered corn pickers and tractors, our members will buy and use them. In fact, we'd love to use ethanol-powered farm equipment so we can set an example and show the rest of the world how efficient and good ethanol is."Have they ever told the farm implement makers that Maury? John Deere, New Holland, Case, Kubota, IH, and the others would happily make ethanol-powered farm equipment if they knew people would buy it.Farmers should have been the first to jump on the ethanol bandwagon. In fact, anytime a state legislature passes an ethanol mandate, it would only be fair if farmers were the first that had to comply. There is no good reason all the farmers in Iowa, Illinois, and Nebraska should not have long ago been using ag equipment that burns pure ethanol. If state legislatures made it a law that their farmers could burn only ethanol, the implement makers would very quickly get on board and provide it.Ethanol mandates should always first apply to farmers and their farm equipment.

    Comment by Wendell Mercantile | December 10, 2009

  52. Robert, I'm never going to see what you want me to see. I strained my eyes until I got headaches.But I think this is a case of willful blindness. It isn’t so much for you to see what I see. You can either agree with the numbers or challenge the numbers in some way. Just saying “I can’t agree with that” is a copout. The numbers are there, and you can check them. Find a flaw with the numbers or the methodology.I think it's a lot easier to tell ethanol's impact by comparing crude inputs and finished product from different years. I have already explained why that assumption is bad, and even Rufus told you that assumption is bad. It is a fact that cokers have resulted in higher gasoline output – and you don’t factor things like that in. So why is it a lot easier for you? Because you think it gives an answer you can live with (even though it is wrong)?Trying to figure ethanol's impact using domestic production,import and export numbers,and demand figures from only years where the economy grew strongly is too much like three card monte for me.Hmm, me thinks you are playing games. As one reader pointed out, since ethanol was included in the demand number, it really didn’t impact things if I threw 2008 in there. So I did. Did you miss that follow-up?So what time frame do you suggest we look at? What else do we need to look at besides demand, production, imports, and ethanol production? You put together a methodology and let's see if it withstands scrutiny.RR

    Comment by Robert Rapier | December 10, 2009

  53. I want a car that runs on natural gas.Maury,But you have no clout. Big Ethanol, Big Corn, and the Corn Belt politicians do have clout. Maury saying he wants an NG car doesn't amount to a hill of beans.But if Big Corn and Big Ethanol said they wanted ethanol-powered ag equipment, it would happen.What's your guess on why they've never said that?

    Comment by Wendell Mercantile | December 10, 2009

  54. "The numbers are there, and you can check them. Find a flaw with the numbers or the methodology"The numbers are gibberish on my computer. I see some comments you made,but they aren't formatted where I can read them. Will someone besides Robert tell me if they can make heads or tails of this? I've got to run some errands,but I'll try to get your spreadsheet to work when I get back Robert.http://tinyurl.com/yaulmew

    Comment by Maury | December 10, 2009

  55. "What else do we need to look at besides demand, production, imports, and ethanol production? You put together a methodology and let's see if it withstands scrutiny."We don't need to look at any of that stuff Robert. The idea is to use less oil. Compare crude inputs from than and now,along with finished product. If we're using less oil to make more product,SOMETHING is responsible. If we're getting a LOT more product from less crude,it would have to be from something other than efficiency gains.

    Comment by Maury | December 10, 2009

  56. Will someone besides Robert tell me if they can make heads or tails of this?Even on the link you posted, there are tabs at the bottom for data and calculations. The only thing that shows up blank is the graphs. Compare crude inputs from than and now,along with finished product. If we're using less oil to make more product,SOMETHING is responsible.But if you do a one-month snapshot as you did (and have done in the past), you introduce a lot of noise in the system. Inventory changes can grossly distort that picture. Do an annual to annual comparison, and then let's discuss the results.RR

    Comment by Robert Rapier | December 10, 2009

  57. “arrogance”Pride of doing something well demonstrating you are part of an elite group, the best of the best, is often called arrogance by those who do not understand such things.I use about 5 gallons per year of gasoline in my boat and lawn equipment. About 15 gallons a month for commuting for about a total 500 gallons a year considering the family car. This means I use 50 gallons of ethanol. As a consumer, I would like the amount of ethanol to be 15%.As a consumer, I also know where in my area to buy ethanol free gasoline. It is not a secret, so you are only forced to buy ethanol if you are too lazy to relieve your ignorance.Furthermore, when I was on the board of directors at our yacht club; part of our duties was to monitor the fuel pier and maintain federal regulations. Marine quality fuel was available to the public and our members. One of responsibilities as a nuclear qualified officer in the US Navy was safety related fuel for the ships emergency diesels. Our JP-5 was also popular with helo pilots which meant I got to spent lots of time as OIC of the helo crash detail during HIFR. “work in stories to show everyone that he excels where others fail. This time it was boating.”I do think RR misses the point. Very few fail. A few idiots do fail and RR wants to use that an argument to not try anything new. This would indicate that only a minimum competence is required which almost all boater are able to master. It also take no competency to not start a journey. RR spend lots of time describing failure but very little examining successes. If fact it would appear that RR's passion is the pointing out failure of those who try.

    Comment by Kit P | December 11, 2009

  58. If fact it would appear that RR's passion is the pointing out failure of those who try.Yet funny enough, it is you who is always telling us how you rode to the rescue of others failures. This time, you told us about the boater's failures, and how you helped them out. Other times, it was a safety study that the leader just couldn't perform at your level. Blah, blah, blah. Projection.RR

    Comment by Robert Rapier | December 11, 2009

  59. rufus wrote: Remember, Corn ethanol is held, by statute, to 15 Billion Gpy. So, although you might see two, or three more corn plants, "Corn" ethanol is, basically, saturated. What are you saying? If more than 15 Billion gallons per year of Corn Ethanol gets produced in the US, someone (farmer, ethanol producer, blender?) is going to get fined or imprisoned? If not, then what's to stop more ethanol plants from being built, if it's so profitable? Is there some other penalty if they go over 15 Billion Gpy? Will the 45 cent per gallon blenders credit go away, and make it less profitable to make ethanol? I thought you said ethanol is profitable with no subsidy in sight. But that penalty doesn' exist either, does it?If blenders are blending as much ethanol as is available because it's cheaper than gasoline per gallon, why would they stop at some artificial number as 15 Billion Bpy? Is it because they aren't really blending it because they want to, but because they are mandated to? You said "Brazilian" cane ethanol is selling for $3.26/gal vs $2.06 for U.S. Corn Ethanol. inhttp://i-r-squared.blogspot.com/2009/11/son-of-xethanol-goes-bankrupt.htmlIf that's the case, why wouldn't ethanol producers keep building more corn plants beyond 15 billion Bpy so they could sell the excess to Brazil for a profit, even with a 20% Brazilian import tariff? Or is there actually no profit to be had?We wouldn't have to worry about the blend wall if more than 2% of the fuel used by flex fuel vehicles (FFV) in the US were E85. Slide 13 ofhttp://www.energy.ca.gov/2009_energypolicy/documents/2009-04-14-15_workshop/presentations/Day-1/09-Frusti_James_Mid-Level_Ethanol_Blends.pdfIf it's such a great thing for the FFV owner, an education campaign should raise the E85 usage in FFV way above 2%. If all FFV used E85 all the time, that would consume another 5 Billion Bpy of corn ethanol without moving the blend wall.

    Comment by Clee | December 11, 2009

  60. Oops somehow I switched from Gpy to Bpy. They should all be gallons per year.

    Comment by Clee | December 11, 2009

  61. To the anonymous poster whose post I just deleted. First, drive by insults are deleted on the spot. If you have nothing better to do with your time than to post insults that will be immediately deleted, maybe you should find a hobby. Second, claims need to be referenced. This is especially true when the claims are of such outrageous nature as the one you just posted: E10 is defined as anything between 4-24% alcohol by volume. I don't allow the deliberate spreading of misinformation here. Finally, nobody ever said you can't run cars on blends above E10. We run them on E85 now. So try to understand the issue before foaming at the mouth over it.RR

    Comment by Robert Rapier | December 12, 2009


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