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Frequent Contributor

EPA cuts ethanol mandate

As expected, EPA has officially proposed a 2014 blending mandate that appears to cut convential grain-based ethanol use to about 13 billion gallons. The proposed rule is posted on the EPA website at:

 

http://www.epa.gov/otaq/fuels/renewablefuels/documents/420f13048.pdf

 

To get the corn ethanol volume, subtract advanced biofuels from renewable fuels. 

 

 

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6 Replies
Advisor

Re: EPA cuts ethanol mandate

I've always been perplexed by the oil company's supposed dislike for ethanol. the companies that own their stations or blend for others can buy a product (ethanol) at less than their cost of producing unleaded (my assumption) blend it, have a renewable product that cuts pollution, and then sell it for a handsome markup. Looks like a great deal for the retailer and a win for everyone.

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Advisor

Re: EPA cuts ethanol mandate

Also, isn't it common practice now for refineries to produce gasoline with lower octane(at a lower cost of production) and raise the octane by adding ethanol? for all you conspiracy theorists, maybe the goal is to ruin ethanol, then buy up plants for pennies on the dollar and then get in to ethanol production for the "good of the american consumer".

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Frequent Contributor

Re: EPA cuts ethanol mandate

Before ethanol, MTBE was used as an oxygenate and octane booster. MTBE was banned from use in many states due to groundwater contamination, and its use completely abandoned by the petroleum industry due to fear of litigation. 

 

With all the ranting against ethanol why is this fact never mentioned as a rebuttal? Ethanol is the only replacement for MTBE. It practically has to be blended into gasoline to meet emissions standards.

 

Here's a theory for ya: The oil industry SUPPORTED ethanol mandates, they just made sure to keep the real reason quiet... insuring a cheap supply of oxygenate to be blended with the main product so sales could continue without disruption. 

Esteemed Advisor

Re: EPA cuts ethanol mandate

Having done a pretty fair amount of research into this issue, the EPA does not have statutory authority to do this. They can only do it if there is a supply issue, which there is not now, or likely to be anytime in foreseeable future. Surely, some of the big ag industry groups will challenge them as to the legality of it?

 

Of course, this administration has never let the law, or their past promises, stand in the way.

Frequent Contributor

Re: EPA cuts ethanol mandate

The Renewable Fuels Association takes the same position: The EPA lacks authority to consider the blend wall as a reason for lowering the RFS. And, if the final rule looks like Friday's announcement, RFA says they'll take EPA to court. Ultimately, the federal courts, and perhaps the Supreme Court, will decide if RFA's position is correct. 

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Frequent Contributor

Re: EPA cuts ethanol mandate

All of you who have mentioned ethanol's benefit as a cheap oxygenate and replacement for MTBE are correct. The ethanol industry has pretty much replaced MTBE unleaded with E10. So it would appear that ethanol has a stable, but capped market, at about 10% if EPA succeeds in lowering the RFS this year and from here on out until 2022. However, if gasoline use continues to decline, then ethanol actually has  a shrinking market, as does the oil industry. 

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