US Ethanol In Throes Of Tumult

There’s even more turmoil than usual in the U.S. biofuels policy realm, with lawsuits, demands for criminal investigations, leaked documents and threats flying all over the place.

It all revolves around the 2007 renewable fuel standard that requires increasing amounts of biofuels – and right now that means mostly corn-based ethanol – be blended into gasoline. The problem is, Americans are using less gasoline, and even though the EPA has cleared 15 percent ethanol gasoline (E15) for use with post-2001 cars, trucks and SUVs, most gasoline sold is still at the 10 percent ethanol level.

ethanol biofuels

image via Poet

This is the “blend wall” that refiners howl about. Unwilling or unable to absorb more ethanol, they’ve had to buy up credits (referred to as RINs, for “renewable identification numbers”), sending the prices skyrocketing.

So the American Petroleum Institute last week sued the Environmental Protection agency over the standards, which is a pretty regular occurrence.

On the other side, corn state politicians and the ethanol industry accuse the petroleum industry of blocking E15 availability. There does seem to be some resistance to the stuff out in the market, but the ethanol advocates say it’s more than that – and they’ve called on the Justice Department to look into allegations “that oil companies may be undermining efforts to distribute renewable fuels, including higher ethanol gasoline blends, that help boost our nation’s energy security and lower the price of gas for consumers.”

The oil guys got good news, however, with the leak late last week of an apparent EPA document that acknowledged the blend wall as an “important reality” and talked of cutting the biofuel mandate for 2014 from the figure required in the RFS, 18.15 billion gallons, to 15.21 billion gallons.

The head of the Renewable Fuels Association reacted as you might expect, according to Reuters: “Let me be clear: any plan to roll back the targets … under the guise of addressing the blend wall would be patently unlawful,” said Bob Dinneen.

Meanwhile, in Iowa, the governor is using state resources and $250,000 in federal anti-pollution money from the U.S. Department of Transportation to expand the availability of biodiesel and E30. That’s right, gasoline with 30 percent ethanol.

Sports columnist, newspaper desk guy, website managing editor, wine-industry PR specialist, freelance writer—Pete Danko’s career in media has covered a lot of terrain. The constant along the way has been a fierce dedication to knowing the story and getting it right. Danko's work has appeared in Wired, The New York Times, San Francisco Chronicle and elsewhere.