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11-15-2013 01:07 PM
Here's how Brian Jennings, of the American Coalition for Ethanol reacted to the announcement:
“There is nothing positive that can be said about EPA’s proposal to unnecessarily restrict sales of ethanol-blended fuel in 2014. This proposed rule will increase pump prices, drain billions of dollars from consumer pocketbooks, and transfer billions more to oil company profit statements,” said Jennings. “ EPA’s proposal fundamentally betrays this Administration’s commitment to clean renewable fuels and caves to Big Oil demands to put a ceiling on ethanol use."
“We are deeply disappointed in EPA and will try to help them come to their senses before the final rule is published, by helping the Administration better grasp the role E15 and E85 can play in meeting the 2014 RFS" continued Jennings. “This proposal likely violates the law, would shut down biofuel facilities, put Americans out of work, and chase investment in advanced biofuel overseas to our competitors.”
11-15-2013 01:28 PM
The reaction seems overblown. I understand the competition between Big Oil and Ethanol.
But lowering the mandate doesn't put a regulatory ceiling on ethanol production. Just that Big Oil won't have to cooperate. E-85 is still available where installed. But automotive fuel use is down so excess mandates would have to squeeze into E-85 or E-15. But the logistics and issues around E-15 makes it a no winner until there is kess dispute about cars that, at least theoretically, could be damaged, at least until that age of auto is phased out. I suspect there is no real problem there after the testing carried out. But a station is not going to have E-10 AND E15, so it's one or the other.
There's always exports. The margins have to be good with lower priced feedstock.
11-15-2013 01:48 PM
I didn't see it but apparently the talking heads on CNBC were ecstatic about how great that is for the oil companies.
Whatever, I'm having a hard time seeing how a maybe 1% increase in their assumed distillate volume is that big of a deal and actually I'll bet that gasoline consumption drops at least that much by the end of 2014 regardless.
But anyway, I think the 10% is here for good and that is no small thing. A saner policy would be to now push for ways to get more E-85 used when corn supplies are plentiful.
11-15-2013 01:55 PM
I agree with Pal, and might say the reaction is silly. The adjustment in the mandate needed to be made. The original schedule of mandates was unrealistic and the foolishness that congress was full of in 2007.
15.2 billion gallons in 2014 is still a big market. As I read it that is the required level not a limit. The upside limit is whatever the market bears.
Not much for tag quotes but this one fit this topic perfectly.
"In my many years I have come to a conclusion: one useless man is a shame, two is a law firm and three or more is congress."
11-15-2013 02:18 PM
Margins will be the key. But this really isnt bullish 2014 corn. Could be 400-500 mil bushels of corn (less useage). When you think that we had 3-4 mil corn PP that could come back into acerage this spring and cuz of price we may lose acerage its a wash. So 90-91 mil acres planted and finally a good growing season, I see 370-360 harvest lows for dec 2014
11-15-2013 02:49 PM
I agree, the goal was lowered,but not the ceiling on ethanol production. It was just one more negative dart cast at the the ethanol industry. I still wonder if Big Oil will secretly cooperate and even blend beyond the mandate if ethanol is cheap and makes them money? A question for anyone--I'm hearing that ethanol plants are grinding through lots of corn just now and the margins are very good, where is the ethanol going, exports, being blended, stockpiling?
I just filled up the van the other day for $2.39 E-85, $2.89 for E-10.
11-15-2013 03:47 PM
Truth be known, I'm not helping either Big Oil or ethanol. I'm part of the problem and part of the solution I guess.
My main personal car that I lease is at 107 mpg for its lifetime of 5700 miles. Dang, I WAS at 120+ mpg lifetime until i took some longer trips. But, it's the best car I've ever 'owned', or driven (with the exception of borrowing a friends Porsche Boxter).
Know what I'm driving?
11-15-2013 04:14 PM
It's a Volt. I believe it's the only car that can accomplish this unless someone is going exceedingly short trips with time for charging.
It's not misleading in the sense that the fuel I don't use doesn't need to be imported and therefore ethanol is reduced also.
At my rates the equivelant of a gallon of gas costs a little over a dollar, and it''s for a 'high milage' car. No imported oil is used for the electricity. Beyond that most of the power in this area is hydro and wind.
And it is fun to drive - even it is not corrrectly understood by most.
11-15-2013 04:25 PM
Most of our driving is short duration. The concept could work well if we get it refined to an affordable wagon for the masses.
I have been looking for some details on the comparative cost of energy per mile that includes the elec meter cost of recharging.
Elec in many areas is relatively cheap. Also wonder about the life of elec storage and replacement cost in the vehicle.?