View from Our Seat in the Ballpark

Doug Durante, Clean Fuels Development Coalition

As Congress returns to Washington after fleeing the August heat and humidity for their six week recess there are many ethanol issues yet to be resolved.  While that is nothing new, it comes at a time when we are once again reminded how we remain at the mercy of OPEC and the oil industry. With a national average gasoline price of $3.75 for regular and premium grades up to a dollar more, it impacts every aspect of our economy. And diesel for much of our farm equipment is similarly exorbitant.

 I almost laugh when I hear some people point out that its not that bad considering a year ago gasoline was almost a dollar more.  That’s like saying there is a guy hitting me in the head with a hammer but is not that bad, last year he was hitting me with two hammers.

We have the ability to reduce gasoline prices, and the climate, health and economic damages that come with it by using more ethanol. As of this writing ethanol is close to $1 less than gasoline yet we continue to allow big oil and the EPA to limit the amount we can use.  With the constant pressure to reduce carbon emissions, Congress and the administration should be doing everything possible to get more ethanol into the pool.

While Congress will have their plates full when they return in September, they could immediately get behind a bold bi-partisan plan to reduce prices and improve fuel quality by establishing a high octane, low carbon fuel standard that has been introduced in both Houses of Congress.   

The Next Generation Fuels Act has been introduced in the U.S. Senate by Sens. Charles Grassley (R-Iowa), Amy Klobuchar (D-Minn.), Joni Ernst (R-Iowa) and Tammy Duckworth (D-Ill.)  A companion bill has been introduced in the House of Representatives by Iowa Rep. Mariannette Miller-Meeks and 27 co-sponsors. This bill supports SDFU’s longstanding support for 30% ethanol blends that would increase corn demand at a time when the gasoline market is shrinking and export markets have been overtaken by Brazil.

What makes this proposed legislation potentially game changing is that unlike single issue efforts in the past to address one aspect of ethanol development, this would systematically identify and resolve the range of obstacles we often face. For example, a bill to address the rvp issue might allow higher blends but then be stymied by the fact that (faulty) EPA models claim those blends increase emissions.  Or an ethanol high octane standard might be blocked because of arguments that automakers don’t honor warrantees for high ethanol blends.  This bill takes on each of these obstacles.

At its core is establishing a high octane, low carbon fuels standard that will increase efficiency, lower consumer costs, and protect public health.   Here are key elements of this proposed legislation:

• Increases octane of gasoline to 95 RON/E20 in 2028, and 98 RON/E30  in 2033.
• Beginning in 2028 automobile manufacturers required to certify vehicles for emissions and mpg on a minimum of an E20/95 RON , in 2033 to 98 RON/E30.
• Automakers are required to warrant vehicles to those levels at those times.
• Octane Additives to gasoline must meet a minimum 40% Greenhouse Gas (GHG) reduction
• Calculation of GHG based on mandatory use of Department of Energy’s GREET Model, which unlike models used by EPA shows ethanol to be very low carbon.
• RVP Waiver applied to all blends of 10% or more. 
• Aromatic compounds which refiners add to gasoline to increase octane levels are the primary precursors to the most dangerous pollutants in urban areas, especially particle-borne toxics.   Beginning in January 2027, the bill would limit these aromatics to average annual volume of 17.5% with a volume cap of 30%. After 2032 reduced to 25% cap.
• Improves the “F Factor” Utilization Calculations for Dual Fuel Vehicles making ethanol used in FFVs more valuable in carbon calculations.
• Expands emissions testing to include calculations of benzene, fine particulate matter and other precursors, including their role in formation of Secondary Organic Aerosols and other secondary pollutants.
• Various requirements for compatible fuel dispensing systems to ensure these newer, cleaner fuels are used.

For SDFU, which has helped pioneer the use of 30% ethanol blends while leading the effort to reduce carcinogens in gasoline, this is validation of everything you have been working for. South Dakota Congressional Representatives, while strong ethanol supporters, are not yet co-sponsors of this bill. There have been bills addressing individual issues such as RVP relief, requiring EPA to use accurate emission and carbon models, and other measures that the two Senators and the House Representative have supported.  This bill captures all of these issues in one package and SDFU members should encourage their representatives to co-sponsor the Next Generation Fuels Act.