Consumers today are faced with higher gas prices and a push to lower carbon emissions. Ethanol can position itself as a solution for each challenge, according to speakers at the 27th National Ethanol Conference held in New Orleans Feb. 21-23.
Oil prices topped $95 per barrel last week and average retail gas prices hit $3.50 a gallon, which Renewable Fuels Association Geoff Cooper says “reminds us of an inconvenient reality: We cannot frack our way to low gas prices and energy security. Whether we like it or not, pump prices here in America continue to be shaped by the whims of OPEC and geopolitical events—like the current situation in Ukraine.”
Rather than calling on OPEC to increase production, releasing oil from the Strategic Petroleum Reserve, or suspending the federal gasoline tax, Cooper encourages the Biden administration to move quickly to facilitate the sale of higher ethanol blends like E15.
“Today, fuel blenders can buy a gallon of ethanol for about 50 cents less than a gallon gasoline,” he says, noting that E15 is selling for 20 to 25 cents less than E10 in some places in recent weeks. “Make no mistake, the quickest way to lower gas prices would be to restore the ability of retailers to sell E15 year-round and allow them to do it through existing equipment.”
Path forward on E15
Despite attempts during the Trump administration to allow for year-round E15 use, the courts overturned those actions. The result limits E15 in certain states to only nine months of the year.
Cooper admits the ethanol industry doesn’t have a lot of good options in resolving the E15 year-round access issue. One does include a legislative fix such as the Consumer and Fuel Retailer Choice Act (S. 2339). However, finding a legislative vehicle could prove problematic in an election year with brakes already slowing legislation.
EPA could also take relevant regulatory action to restore summer sales for E15 and complete a pending rulemaking that would simplify pump labeling and broaden the use of existing fueling infrastructure for E15. EPA adopted regulations two years ago that fixed this problem by extending the one-pound waiver for E15.
Several Midwest governors have also inquired to EPA about their rights, and the ability under the Clean Air Act statutes, to opt out of the volatility waiver and essentially create a level playing field for E10 and E15.
On a retailer stakeholder panel, Eric Fobes, head ethanol trader for Pilot Company, says consumers are telling them they want E15, but regulatory hurdles are limiting companies’ ability to do so.
“Ethanol is our carrot to attract our customers which is why we want to blend as much ethanol as we can,” Fobes says, which garnered applause from the nearly 600 attendees at the ethanol conference.
BP has also announced publicly it will start selling E15 branded fuel in eight states, however, it won’t be able to in summers months until a regulatory fix is made.
Cooper says some of the big players in the gasoline market, such as BP, are moving ahead with E15 even with the understanding that three months out of the year they might have to take the labels off their pump and only sell E10. “While that’s ridiculous and we’re going to work to fix that, nine months of E15 is better than zero months of E15 at those stations,” Cooper says.
Liquid fuels here to stay
Despite all the attention on electric vehicles, several speakers at the conference reinforced the role of liquid fuels and internal combustion engines despite the ongoing push to electrify vehicles.
Doug Kantor, general counsel for the National Association of Convenience Stores, says even with the assumption that by 2030 50% of new vehicles sold will be electric, only 17% of the fleet overall is electric at that point. And surprisingly, with that new 50% of new cars being electric, it only reduces gasoline demand by 4%, Kantor adds.
“All electric is not a way to get rid of all the problems we’ve got in respect to carbon, at least by itself,” Kantor says.
Fobes says ethanol is the “bridge fuel to proper decarbonization.” He explains that as a nation, if there are climate goals that are somewhat achievable or measurable, “E15 is a very eloquent solution to those goals.”
As highlighted in a new study released at the conference, ethanol is on a trajectory to achieve net-zero carbon emissions well before 2050. But ethanol’s ability to contribute to decarbonization goals goes far beyond the light-duty vehicle fleet, Cooper adds.
“With the right chemistry and technology, ethanol can serve not only as a future low-carbon fuel for jets, ocean liners, trucks, and farm equipment, but also as the fundamental building block for sustainable chemicals and plastics,” Cooper adds. “In reality, anything you can do with a barrel of crude oil, we can do with a barrel of renewable ethanol.”