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Higher Ethanol Blends Discussed by Automakers

Higher Ethanol Blends Discussed by Automakers

RFA says a large number of people like E30.

Calling biofuels an important part of the strategy to reduce America's reliance on foreign oil, automakers told Congress they're open to the idea of building cars and light-trucks capable of running on gasoline-ethanol blends higher than E10.

In testimony to the Senate Energy and Natural Resources Committee, Shane Karr of the Alliance of Automobile Manufacturers, said that mid-level blends would do more to reach biofuels use targets than requiring 90% of vehicles to run on E85 by 2016.

"The availability of the new fuel should coincide with the availability of vehicles that can run on the new fuel so we have a market for both," Karr said. "In order to ensure successful implementation we would work closely with other stakeholders to determine the right level and timeframe, and we would propose government policies where necessary to safeguard consumer access to the fuels."

A pleasantly surprised Renewable Fuels Association President Bob Dinneen lauded Karr's testimony and lobbied lawmakers to subsidize refueling infrastructure for higher level blends. He says that blender pumps would need to be installed in a minimum of 53,000 service stations, which represents 33% of service stations across the country. There is some question about what an acceptable mid-level blend would be.

"Frankly there is a fair amount of anecdotal evidence to suggest that given the opportunity people seem to be gravitating toward E30," Dinneen said. "That is a blend level they have noticed to provide them with the best gas mileage and performance."

Meeting the 36 billion gallon biofuels mandate by 2022 will require 16 billion gallons of cellulosic ethanol. Bill Brady, CEO of Mascoma Corporation and chairman of the Advanced Ethanol Council, warned that won't happen if Washington pulls the plug on loan guarantees needed to finance construction of the first few plants and tax credits necessary to keep them operational.

"Ideally our industry would like to see long-term, 10-year production tax incentives," Brady said. "Engaging in this yearly extenders game does not give investors confidence that it will be there for them."

Mascoma hopes to break ground this year on a $350 million biorefinery in Michigan that if completed in 2013 would turn low-value wood products into 40 million gallons of cellulosic fuel annually. Brady said the ethanol produced at the facility will be competitive with oil at $75 a barrel and competitive with corn ethanol when compared on a cash-cost basis.

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