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Renewable Fuel Standard
August 2015For the latest report, please visit www.api.org/policy-and-issues/fuels and
www.filluponfacts.com
Fill Up On Facts
America’s Oil and Natural Gas Industry
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Table of Contents
Fill Up On FactsWhat is the RFS? ..............................................................................................Page 1
Problems with Predicting Demand ...................................................................Page 2
Problems with Predicting Supply ......................................................................Page 3
Problems with Choosing Technologies .............................................................Page 4
What is “The Blend Wall?” ................................................................................Page 5
Running Up Against the “Blend Wall” ...............................................................Page 6
E15 and Your Car .............................................................................................Page 7
The RFS Is Broken............................................................................................Page 8
The RFS - Economics and Security ..................................................................Page 9
Magical Thinking on E85 and Ethanol Mandates ..............................................Page 10
E15 in Chicago .................................................................................................Page 11
Potential Vehicle Damage .................................................................................Page 12,13,14
Chain Restaurants on the RFS Ethanol Mandate..............................................Page 15 The RFS and Outdoor Power Equipment.........................................................Page 16,17
The National Turkey Foundation on the RFS .....................................................Page 18
E15 - A Bumpy Ride for Motorcyclists ..............................................................Page 19,20
RFS Ethanol Mandates a Kitchen Table Issue...................................................Page 21,22
Rising Ethanol Blends Don’t Float All Boats ......................................................Page 23,24
Resources ........................................................................................................Page 25
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The Energy Independence and Security Act of 2007
(EISA07) included an expanded Renewable Fuel
Standard (RFS2), which the EPA used to develop a final
rule effective July 1, 2010. To comply with the RFS2biofuel producers and importers must blend increasing
amounts of biofuels into gasoline and diesel,
Petroleum refiners and importers then must acquire
sufficient RINs to demonstrate compliance with RFS2
based on the amount of gasoline and diesel they
produce and/or import. The RFS2 is complex with fournested volumetric mandates: total renewable biofuel,
advanced biofuel, cellulosic biofuel and biomass-based
diesel.
What is the RFS?
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EISA07 was based on significantly greater gasolinedemand projections, but the U.S. Energy Information
Administration’s 2013 outlook for 2022 projects 25
percent lower demand vs. the 2007 outlook, when
EISA07 was enacted. Cellulosic technologies were
expected to develop within a few years of EISA07,
but by the end of 2014, only one plant in the U.S.
was producing cellulosic ethanol.
Declining gasoline demand, combined with increasingmandates, means we are approaching the limit of
blending ethanol into gasoline (10 percent ethanol or
E10) for widespread use. The EPA rushed through
approval of an up to 15 percent ethanol blend (E15)
without adequate testing. In addition to compatibility
problems with E15, expanded use of another alternative
fuel (E85), has not occurred due to poor consumer
acceptance and significant infrastructure and cost
challenges.
Page
Problems with Predicting Demand
h u n d r e d b
i l l i o n
g a l l o n s
p e r y e a r
Motor Gasoline Consumption(hundred billion gallons per year)
Reality Gap
Projected 2007 Actual and 2014 Projected
2008 2010 2012 2014 2016 2018 2020 2022
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
Source: U.S. Energy Information Administration – Annual Energy Outlooks 2007 to 2013. Visit: http://1.usa.gov/122CHde
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EISA07 also assumed declining domestic production of
crude oil and far greater crude oil imports. Both of these
assumptions have been completely reversed by the
shale oil revolution and dramatically increased
North American energy production – the U.S. is now the
world’s leading oil and natural gas superpower. The RFS
is thus based on an economics and security perspective
much different from the reality of today.-
Problems with Predicting Supply
millionbarrelsperday
Crude Oil Domestic Crude Production(million barrels per day)
Reality Gap
Actual and 2014 Forecast 2007 Forecast
2008 2010 2012 2014 2016 2018 2020 2022
4
5
6
7
8
9
10
millionbarrelsperday
Gross Imports Crude(million barrels per day)
Reality Gap
Actual and 2014 Forecast 2007 Forecast
2008 2010 2012 2014 2016 2018 2020 2022
4
6
8
10
12
14
Source: U.S. Energy Information Administration – Annual Energy Outlooks 2007 to 2013. Visit: http://1.usa.gov/122CHde
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Problems with Choosing Technologies
Contrary to claims, the EPA mandate for increased use
of cellulosic biofuels is disconnected from reality. Though
there was no commercial cellulosic production in 2010,EPA set the mandate for 2011 at 6.6 million gallons.
There was no commercial production in 2011, either, yet
EPA mandated 8.65 million gallons for 2012.
A total of 20,000 gallons were produced in 2012, but it
was exported to Brazil and didn’t count toward RFS2
compliance (chart above). The original target of one
billion gallons set for 2013 was retroactively reduced in
May 2014 to 810,185 gallons to reflect actual supply. In
December 2014, the EPA announced that it would not
release the 2014 target until 2015. With each passingyear, EPA targets diverge further and further from actual
production, creating expensive uncertainty for refineries
busy meeting American fuel needs.
Source
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What is the “Blend Wall?”
As biofuel mandates increase, the ethanol volume
required for blending into gasoline will exceed 10percent – known as the “E10 Blend Wall.” Declining
gasoline demand accelerates and exacerbates the
Blend Wall. EIA demand projections for gasoline, E85
and combined ethanol consumption indicate RFS2
targets will not be met even if the cellulosic standard is
waived —notwithstanding EIA’s optimistic projections
about E15/E85 acceptance. The oil industry’s ability tosupply gasoline (as limited by the E10 Blend Wall) does
not meet EIA demand projections.
percentbyvolume
Ethanol Share of U.S.Gasoline Consumption 2009-2014(percent by volume, blue highlights projected values)
Ethanol Share of U.S. Gasoline Consumption
2009Q1
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q
2
6
7
8
9
10
11
Source: U.S. Energy Information Administration – Annual Energy Outlooks 2007 to 2013. Visit: http://1.usa.gov/122CHde
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A study by NERA Economic Consulting buttresses theargument that the RFS2 is irretrievably broken. The
study details the approaching ethanol Blend Wall, the
point at which ethanol mandates under the RFS2 force
more ethanol into the nation’s fuel supply than is safe for
most motorists and their vehicles. According to NERA,
continued implementation of RFS ethanol mandates by
2015 could:
•
Lead to fuel supply disruptions that ripple adverselythrough the economy.
• Cause the cost of diesel to rise 300 percent and
the cost of gasoline to rise 30 percent.
• Decrease U.S. GDP by $770 billion.
• Reduce worker take-home pay by more than
$580 billion.
Source
Running Up Against the “Blend Wall”
Running Up Against the “Blend Wall”
ource: NERA Economic Consulting
Economic Harm in 2015
• $770 billion decrease in GDP
• $2,700 decrease in Average
Household Consumption
When the Blend Wall is
Reached, NERA Found:
• Maximizing biofuel blending alone
does not ensure compliance.
• Companies could comply by reducing
the volume of fuel supplied to thedomestic market
Individual OPs reduce
production to decrease
RVO and remain
in compliance
EPA raises
Compliance
Percentage for
next year
RVO increases as
fuel production
decreases
Cycle Repeats-
Economic Harm Intensifies
Obligated Parties
(OPs) seek
compliancethrough available
mechanisms
Renewable Volume Obligation
(RVO) exceeds market ability to
absorb renewable fuels (Blend Wall)
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E15 and Your Car
Testing by the Coordinating Research Council (CRC),
which has been the gold standard in vehicular research
for the better part of a century, determined that millions
of vehicles on the road today could suffer engine
damage from using fuels containing higher levels of
ethanol than for which they were designed. Likewise,a separate CRC study found that fuel pump systems
could seize up or otherwise be damaged by higher-
content ethanol fuel.
As a result, a number of groups are concerned about
efforts to force increased use of E15 gasoline, fuel
that contains up to 15 percent ethanol (compared to
the standard grade used in the U.S. that contains up
to 10 percent ethanol). These include automakers,
AAA, the California Air Resources Board (CARB), and
environmental non-profits. The stakes are high for
consumers who could be left stranded on the roadside
and/or stuck with potentially expensive repair bills.
MANUFACTURER MODEL YEAR
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2
BMW No No No No No No No No No No No No No No
Chrysler No No No No No No No No No No No No No No
Ford No No No No No No No No No No No No Yes Yes Y
GM No No No No No No No No No No No Yes Yes Yes M
Honda/Acura No No No No No No No No No No No No No Some1 Y
Hyundai/Kia No No No No No No No No No No No No No No
Jaguar No No No No No No No No No No No No No Yes Y
Land Rover No No No No No No No No No No No No No Yes Y
Mazda No No No No No No No No No No No No No No
Mercedes No No No No No No No No No No No No No Some2 So
Mitsubishi No No No No No No No No No No No No No No
Nissan No No No No No No No No No No No No No No
Subaru No No No No No No No No No No No No No No
Toyota/Lexus No No No No No No No No No No No No No Some3 M
VW/Audi/
Porsche No No No No No No No No No No No No No Yes Y
Volvo No No No No No No No No No No No No No No
Source: http://www.edmunds.com/ownership/howto/articles/120189/article.html and auto company contacts
1
Accord, Civic, Crosstour, CR-V, CR-Z, Insight, Odyssey, Pilot; Acura: ILX, MDX, RDX, RLX, but not Ridgeline, TL, TSX 2C, CLA, CL, E, GL, GLK, M, S, SL, SLK, but not CLS, G, SLS AMG3 Avalon, Camry, Corolla, Highlander, iQ, Prius, RAV-4, Scion tC, Sienna, Venza; Lexus: CT200H, ES350, GS300/350, GS450H, IS250, IS350, LS460, RX350, RX450H, but not 4Runner, FJ
Cruiser, Land Cruiser, Sequoia, Tacoma, Tundra, Yaris; Lexus: IS250C, IS350C, IS F, GX460, LX5704Not Chevrolet City Express5GL, M, S Sedan, SL, SLK, but not C, CLS, E, G, GLA, GLK, S Coupe, SLS AMG6Not xB, FRS
Vehicle Manufacturers and E15Auto manufacturers and models recommendations for E15 in non-flex fuel vehicles as of January 2015.
Most vehicles on the road today aren’t recommended for operating on E15 by manufacturers.
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The RFS Is Broken
The RFS is indeed broken. In November the EPA
basically agreed, announcing it was giving up on issuing
ethanol-use requirements for 2014 with just a little over
a month to go. Instead, the agency said it will complete
the 2014 targets in 2015 “prior to or in conjunction with
action on the 2015 standards rule.”
The agency’s inability to meet the RFS deadline – it
hasn’t actually met the statutory deadline once in the
past five years (though the 2011 rule was only nine days
late, close enough to call it on time) – offers little hope
that things will improve. The RFS is an example of top-
down central planning that’s detached from reality and
which has created distortions in the marketplace and
uncertainty among those who’re obligated to operate
under it.
What the RFS has become is an illustration of the pitfalls
of government trying to mandate consumer behavior
through a program whose goals have largely been
achieved by surging U.S. energy production.
The Renewable Fuel Standard (RFS) is indeed broken.
In November the EPA basically agreed, announcing it
was giving up on issuing ethanol-use requirements for
2014 – already a year overdue – with just a little over a
month to go in the calendar year. Instead, the agency
said it will complete the 2014 targets in 2015 “prior to or
in conjunction with action on the 2015 standards rule”
– standards that also are late.
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The RFS – Economics and Security
With the supporters of increased ethanol use waging
an aggressive campaign to defend the flawed RFS2, ithas never been more critical to push forward the facts.
This means telling the truth about ethanol’s appropriate
role in the overall fuel picture, the performance of fuels
containing higher levels of ethanol and the market’s tepid
embrace of it and the fantasy of the EPA’s cellulosic
biofuels mandate. Some key facts:
• Contrary to some claims, ethanol is not responsible
for lower U.S. oil imports. From 2008 through 2014,
net imports have fallen by more than 6 million barrels
per day while domestic oil production has increased
by more than 3.5 million barrels per day. Whileethanol production has increased by 328,500 barrels
per day over that period, it is far too small to deserve
credit for reduced imports.
• Contrary to claims, ethanol is primarily an additive
to gasoline, not a replacement for gasoline. It isonly a replacement for gasoline when sold as E85
fuel. In 2012, only 100.2 million gallons of E85 were
sold, meaning that as a fuel (rather than an additive),
ethanol displaced just 50.7 million gallons of gasoline
when you account for ethanol’s lower energy
content. Context: The U.S. consumes about 352
million gallons of gasoline every day.
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Magical Thinking on E85 and Ethanol Mandates
Some have suggested that requiring more production
of higher ethanol-blend fuels like E15 and E85 can
satisfy RFS mandates but these measures expensive,
temporary at best, and could have serious impacts on
consumers and the broader economy.
E85 has several limitations, for starters, only flex-fuel
vehicles (FFVs) can use it, which becomes a logistical
issue because there’s a lack of E85 pumps across
the country – only about 2,500 retail stations out of
more than 150,000 offer it. That’s not because “Big
Oil” is blocking the sale of E85, but because there’s a
lack of consumer demand (see chart). Next, there’s a
mismatch between pump locations and FFVs, illustrated
by a recent Department of Energy (DOE) Inspector
General’s report that found DOE has been fueling its
FFVs with regular gasoline instead of E85, eliminatingmany supposed environmental or cost benefits of
having a fleet of cars that can use fuel containing up
to 83 percent ethanol. And finally, E85 has not been
competitive – just look at AAA’s website that tracks retail
E85 prices.
RFS supporters, desperate to avoid the blend wall
suggest that E85 be “heavily discounted” to reach
maximum sales, but the numbers have not added
up: actual sales of E85 have never come close to the
annual rate which would be needed and E85 has been
more costly on an energy-equivalent basis. Such
arguments ignore ethanol market dynamics. Ethanol
production has expanded and the U.S. has been a net
exporter of ethanol since 2010. Trade flows of ethanolare responding to market signals, which appear to be
placing a higher value on ethanol for its use as a low-
level blend gasoline blendstock than as a high-level
blend as a gasoline replacement (such as E85).
As suggested by economic theory, it is entirely possible
that markets would place a higher value on marginal
ethanol (above what can be consumed in E10) as
an export product. The economic law of supply and
demand is at work, and it is not pointing to E85 being
“heavily discounted” to gasoline containing 10 percent
ethanol.
Trying to come up with fantastical solutions to justify
bad policies are just another distraction from the real
problem: The RFS is fundamentally flawed and its
ethanol mandates are broken. Rather than trying to push
higher ethanol-blend fuels into the market, which the
consumer isn’t demanding (E85) or which could harm
engines (E15), we need the Congress to address the
RFS with long-term and meaningful action.
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E15 in Chicago
“…most cars on the road are not approved by their
manufacturers for E15. Why would the city council use
your engine as a guinea pig?” — Chicago Tribune
Chicago Mayor Rahm Emanuel and his allies on the city
council deserve credit for putting a stop – for now at
least – to an ill-conceived proposal that would mandate
the sale of higher ethanol blend E15 fuel at city service
stations. Ill-conceived because, as argued here and here
earlier this year, the E15 requirement could be full of risk
for consumers and small business owners – while mainly
benefiting ethanol producers. Recently, AAA urged
Chicago lawmakers to vote against the ordinance.
Later, the Chicago Tribune editorialized:
“The touted cost savings and environmental benefitsare dubious. E15 produces less energy than regular
gasoline, so vehicles would get fewer miles to the
gallon on it. And the production of ethanol uses a great
deal of energy. So why is the ethanol industry pushing
this? Because it has a massive supply of ethanol and
not enough demand for it. There is no natural market
demand for this. Without a government mandate
for more ethanol, more ethanol won’t get sold. …
Aldermen, really. Why would you want to prop up an
industry by creating a risk for your constituents? Stop
this ordinance once and for all.”
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Potential Vehicle Damage
The reasons for this view are pretty straight-forward – which we’ve underscored recently with a dash of humor:
Potential vehicle damage – Research has shown E15 could damage engines and fuel systems in millions of vehicles on
the road today. Automakers have warned that using E15 in vehicles that weren’t designed to use it could void warranties.
The real-world impacts of pushing more E15 into the
fuel supply could fall on consumers and the broader
economy, according to a NERA Economic Consulting
study. If Chicago imposes the E15 proposal, it could
impact small businesses that own a number of the
city’s service stations. One owner, Russell Garcia,made the point in a letter to the editor of the Tribune
in October:
“The idea of mandating the sale of E15 gasoline in
Chicago is poor public policy. … (M)y businesses
would be negatively impacted by this mandate, and
my customers would be harmed too. E15 provides
no cost savings. While E15 has a sticker price that is
about the same as traditional gasoline, its poorer gasmileage makes it more expensive. Plus, the cost of
retrofitting new underground tanks at my stations and
my competitors’ would necessitate even higher gas
prices.”
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Potential Vehicle Damage (continued)
Refueler, beware – E15 also poses potential risks in a number of other areas. For example, if you own a gasoline-powered leaf
blower or a snowmobile.
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Potential Vehicle Damage (continued)
Refueler, beware – E15 also poses potential risks in a number of other areas. For example, if you own a gasoline-powered
snowmobile.
The point being that E15 could foul up engines in all
kinds of outdoor equipment. As the Tribune editorial
noted:
The biggest risk comes if equipment is stored for the
season with fuel still in the tank. Ethanol tends to make
rubber and plastic parts more brittle. Ethanol attracts
water, which can increase corrosion in moving parts.
A long winter in contact with this mix can compromise
the equipment.Higher concentrations of ethanol in fuel
can make small engines run hotter, which in turn can
cause malfunctions. Many manufacturers of outdoor
power equipment will not honor warranties if owners
use E15 fuel. They strongly oppose diluting gasoline
with more ethanol.
E15 also poses potential risks for marine engines and
motorcycles.
The Tribune is right: Chicago officials should kill this
proposal once and for all.
Source: http://www.filluponfacts.com/#/?section=e15inchicago
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Chain Restaurants on the RFS Ethanol Mandate
U.S. policy on biofuels, and on corn ethanol in particular,
is a widely-recognized contributor to food price
inflation. Experts from across the political spectrum
now recognize this fact, and many are now calling foran end to Federal subsidies and supports for the corn
ethanol industry. Although NCCR continues to support
incentives for advanced biofuels, such as cellulosic
and others that hold promise for a future of greater
U.S. energy independence, we oppose continuation
of subsidies and supports for the mature corn ethanol
industry. – NCCR
“ Through years of promoting ethanol as a solution to
America’s energy issues, Congress has unknowingly
worked to increase commodity prices on retailers
throughout the supply chain. These subsidies have
artificially increased the price of corn, which in turn has
driven up costs for restaurants and the customers they
serve.” – Rob Green, NCCR executive director
We estimate the impact of the 2015 RFS mandates
at 2011 levels of food purchases under two scenarios
… For the average quick service restaurant, these
input cost increases are the equivalent to $18,190 per
restaurant in the first scenario and $2,894 per restaurant
in the second scenario. For the average full service
restaurant, the cost increases are $17,195 and $2,736
per restaurant, respectively. – PwC report for NCCR
“Ethanol diverts a significant share of the US corn cropeach year. And, by doing so, it makes corn prices higher
than they otherwise would be.” – University of Missouri
economist Pat Westhoff, via VOA News
“ The use of corn-based ethanol required by the federal
Renewable Fuel Standard mandate has dramatically
distorted the market and increased costs throughout the
food supply chain. The RFS has had an adverse effect
on the chain restaurant industry, which has witnessed
marked increases in commodity prices and associated
costs to the tune of billions of dollars a year.”
– Rob Green, NCCR executive director
“Chain restaurants aren’t all mega-corporations. Many
are systems of small business franchises like the one
my family owns. … The government picked winners
and losers when they passed the RFS mandate.
This mandate is costing me $20,000 to $30,000 per
restaurant. It is blatantly unfair and we urge Congress to
repeal it.” – Ed Anderson, Wendy’s franchise owner and
NCCR member.
Source: #ReapealtheRFS - http://bit.ly/1daq9Wk
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The RFS and Outdoor Power Equipment (continued)
Source: #E15 - http://1.usa.gov/1bgNwfo
ethanol blended gas will attain fewer miles per gallon than
those running on conventional gasoline (E10). This means
you must fill your gas tank more frequently when usinghigher ethanol blended fuel. – OPEI
“ The higher the ethanol content, the more acute the
effects.” – OPEI
Manufacturers of outdoor power equipment and their
engines say they will not honor the warranty of a product
someone has been running with E15. The reason?
Besides the above effects of ethanol, engines running
even E10 gasoline run hotter. And with E15, the results
can be dangerous, considering reports of “unintentional
clutch engagement”—such as a powered-up chainsaw that suddenly decides, because it’s running so
hot, that you’ve pressed the button to start the chain.
Manufacturers see a train wreck coming because their
customers will ultimately blame them for problems.
– Consumer Reports.org
“E15 is universally opposed by our entire industry
because of the problems it causes. … Research has
shown that using E15 can have harmful and costlyconsequences on small engines and outdoor power
equipment. Most engines would have great difficulty in
meeting both emissions and performance expectations
with this type of alcohol range. … Most gas stations have
tanks where the supplier puts the mixed gasoline into the
storage tank and the pump pumps it up. Because alcohol
separates from gasoline, consumers can get a higher mix
of alcohol in their fuel. If you increase to 15%, the effect
gets multiplied, so you might end up with double the
alcohol you expected. That’s a problem.” – Brad Murphy
of OPEI member Subaru Industrial Power Products.
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The National Turkey Foundation on the RFS
Source: #ReapealtheRFS - http://bit.ly/17DKm4D
Feed corn prices increase the cost of raising turkeys and
other meat protein animals we raise for food. Consumers
ultimately pay more for these added costs of raising meat
and poultry. – NTF
“Consumers have seen food prices increase faster than
general inflation since the current RFS was enacted in
2007. Food affordability, which had been improving for
decades, now is deteriorating.”
“We saw how price spikes caused by this government
mandate impacts turkey growers when corn prices
reached almost $8 per bushel: U.S. turkey production
declined by 9 percent, resulting in loss of rural jobs.”
“Corn is the major ingredient in turkey feed and almost
all livestock and poultry. Corn is the primary reason why
one turkey company went bankrupt in 2012 and why the
industry already has lost 750 jobs in the last 12 months.”
“ The RFS has destabilized corn and ethanol prices by
offering an almost risk-free demand volume guarantee
to the corn-based ethanol industry. Domestic and export
corn users other than ethanol producers have been
forced to bear a disproportionate share of market and
price risk. Ethanol prices should reflect the fuel’s energy
value relative to gasoline, not a corn price that is both
inflated and destabilized by the inflexible RFS. As corn is
syphoned off to ethanol, animal agriculture is losing jobs in
rural America.”
“ The National Turkey Federation encourages pointed
discussion of the RFS. Animal agriculture has long been
suffering at the hand of this broken policy, especially
feed costs in the turkey business. The RFS has caused
an increase of $1.9 billion in feed cost alone for turkey
farmers, as corn continues to be syphoned off to
ethanol.”
“RFS has been such a poorly managed mess, it’s time to
drain the swamp. The RFS needs a fresh start in order toput in place a smarter policy on the mix of fuel and feed.”
– Joel Brandenberger, NTF President
“It’s safe to say RFS is hitting consumers, poultry
producers, and farmers squarely in the pocketbook.”– Dr. Thomas Elam, president of FarmEcon, LLC,
speaking on behalf of the NTF and the National Chicken
Council
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E15 - A Bumpy Ride for Motorcyclists
Source: #ReapealtheRFS - http://bit.ly/1bWk7De
“ Thanks to the U.S. Environmental Protection Agency,
there’s a new threat facing motorcyclists nationwide, and
possibly all Americans. The danger is posed by a certainblend of motor vehicle fuel called E15, which may damage
the engines of motorcycles, all-terrain vehicles, boats and
powered equipment.” – Wayne Allard, AMA vice president
for government relations
… E15 could lower fuel efficiency and possibly cause
premature engine failure for motorcycles and ATVs.
– AMA
… the U.S. Environmental Protection Agency’s decision
to allow E15 into the marketplace would impact every
American who owns motorcycles and ATVs, not to
mention cars, lawnmowers, boats and snowmobiles.
– AMA
… the U.S. Department of Agriculture was subsidizing
ethanol production from the start by providing grants to
purchase special ethanol blender pumps. … Agriculture
Secretary Tom Vilsack announced in 2011 that the
USDA intends to install 10,000 blender pumps by 2016.
[Rural Energy for America Program] REAP will be a key
component to achieve the secretary’s goal and, thus, help
grow the availability of E15 fuel. These special ethanol
blender pumps will further limit access to E10-or-less
fuel in rural areas. This will be a problem because ruralareas tend to have an older “legacy” vehicle fleet than
other parts of the country. Moreover, rural areas are the
most vulnerable places for motorcyclists and users of
small engine devices because options for regular gasoline
may be few or even non-existent. The REAP will help
one segment of the rural economy at the cost of other
segments. Ultimately, the higher costs will have a negative
impact on small rural economies. – AMA
Automobile and motorcycle manufacturers must certify
that the on-highway vehicles they produce will meet
applicable U.S. EPA and National Highway Traffic Safety Administration emissions, fuel economy and safety
requirements prior to selling the vehicles. The fuel that
the vehicles must use for this requirement is called the
“certification fuel.” Changing the certification fuel to E15
or E30 is at odds with the 22 million motorcycles and
all-terrain vehicles currently in use, not to mention the
legacy fleet of cars, boats, lawnmowers, generators
and hundreds of millions of small engines in commerce
today. None of these vehicles and engines is designed to
operate on fuel with more than 10 percent ethanol. – AMA
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E15 - A Bumpy Ride for Motorcyclists (continued)
Source: #ReapealtheRFS - http://bit.ly/1bWk7De
in use, not to mention the legacy fleet of cars, boats,
lawnmowers, generators and hundreds of millions of
small engines in commerce today. None of these vehiclesand engines is designed to operate on fuel with more
than 10 percent ethanol. – AMA
“When you have a type of fuel that, if inadvertently used,
has the potential to damage engines and fuel systems
and void a manufacturer’s new-vehicle warranty, you
really should move with caution when it comes to putting
that fuel in the marketplace. Issuing rules that allow the
sale of E15 at gas stations without adequate testing to
be sure it’s safe in motorcycles and ATVs, not to mention
engines in boats and power equipment, just isn’t wise.”
– AMA Board Chairman Maggie McNally
100 percent of the 22 million motorcycles and all-terrain
vehicles on the road and trail in the U.S. today are not
designed to run ethanol blends higher than 10 percent,and many older machines favored by vintage enthusiasts
have problems with any ethanol in the fuel. And yet the
opportunity to misfuel and damage an engine with higher
ethanol blends such as E15 is very real. It is time to set
the record straight.
The bottom line for the AMA is this: Motorcyclists simply
want safe fuels available at all fuel retailers and measures
employed by retailers to ensure they cannot inadvertently
put unsafe fuels in their tanks. – AMA
“It really doesn’t do much good to have laws and rulestelling refiners to create volumes of ethanol-gasoline
blends that consumers won’t buy.” – Wayne Allard, AMA
vice president for government relations
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RFS Ethanol Mandates a Kitchen Table Issue
Source: #ReapealtheRFS - http://bit.ly/1bWk7De
“ As American consumers continue to cope with a
period of pro-longed economic turmoil, and U.S. food,
beverage and consumer products makers from farmto fork struggle with record high commodity prices, we
believe it is EPA’s duty to grant a waiver for the applicable
volume of corn ethanol required by the RFS.”
“Congress should adopt an energy policy that, while
promoting sustainable, domestic, and affordable energy
sources, does not lead unnecessarily to increased food
prices.”
“In total, corn is used in 75 percent of the food on
supermarket shelves. Losses in grain yields, therefore,
have a severe impact on U.S. food production for both
domestic consumption and exports such as corn,
soybean, and meat products.”
“It’s not just corn – food-to-fuel policies create a ripple
effect for all agricultural products, also increasing prices
for basic staples like bread, eggs and milk.”
“[W]ithout a high biofuels mandate, the market more
easily adjusts to short-supply situations because ethanol
producers will, at some corn-price level, also reduce
corn usage. Conversely, high biofuels mandates create
inflexibility in markets, the study says, and “any required
adjustment in demand (for corn) would occur outside theethanol industry” (e.g., feed, livestock/poultry, food).”
– American Meat Institute
“The corn-based ethanol mandate impacts the baking
industry twofold: First, the government mandate to
grow corn for fuel instead of food drives farmers to move
away from planting wheat; second, the wheat market
typically follows the much larger corn market, and when
corn prices rise due to government created demand for
ethanol, wheat prices rise as well. With an estimated 40
percent of the corn crop needed to satiate demand for
the corn-based ethanol mandate, there is little doubt thatthe mandate impacts corn prices and supplies, which
will also impact the wheat market. ABA once again calls
on Congress to stand with consumers and repeal the
corn-based ethanol mandate.”
- American Bakers Association (ABA) President & CEO
Robb MacKie
Restoring the
balance betweenfood and fuel cro
is long overdue.
– ABA President & CEO Robb Mac
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RFS Ethanol Mandates a Kitchen Table Issue (continued)
Source: #ReapealtheRFS - http://bit.ly/1bWk7De
Due to the 2005 and 2007 corn-based ethanol
mandates, wheat could not (and cannot) competefor finite acreage against other biofuel crops. With the
addition of E15, estimates show that corn acreage may
need to increase to as much as 110 million acres in order
to meet demand. With increasing ethanol mandates due
to the RFS2, and with the inability of second generation
biofuels to come online quickly to relieve pressure on the
demand for corn-based ethanol, corn will continue to win
the battle over finite farmland in the and drive food prices
both domestically and internationally – Comments to the
House Energy and Commerce Committee
“ The corn-based ethanol program and the Renewable
Fuel Standard (RFS) continue taking their toll on thebaking industry and consumers. Corn-based ethanol
has accelerated the decrease of wheat acreage in the
U.S. over the past 30 years and tightened food supplies
around the world.” – ABA President & CEO Robb MacKie
Restoring the
balance betweenfood and fuel cro
is long overdue.
– ABA President & CEO Robb Mac
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Rising Ethanol Blends Don’t Float All Boats
Source: #ReapealtheRFS - http://bit.ly/1bWk7De
With nearly 13 million registered boats (and nearly
16 million boats in the field) and 70 million boaters
nationwide, the recreational marine industry is a major
consumer goods and services industry that contributed
$30.5 billion in new retail sales and services to the U.S.
economy in 2009 and generates nearly 340,000 jobs
nationwide. … NMMA strongly opposed – and continues
to oppose – the granting of a “partial” or “conditional”
waiver for E15 or any other ethanol blend level over
ten percent ethanol (“E10”) because it will substantially
increase public confusion and lead to persistent misfueling
and consequent engine performance failures, emissions
control failures, and consumer safety concerns.
– NMMA Comments to the U.S. Environmental Protection Agency
The Department of Energy’s National Renewable Energy
Laboratory has tested the effects of E15 gasoline on
some standard marine engines, and the majority of these
engines suffered significant damage or exhibited poor
engine runability, performance, and difficult starting – none
of which is acceptable on a boat at sea.
– NMMA Letter
… we have determined that e15 blends of ethanol would
cause considerable damage to the 7.5 million outboard
engines in use in this country today. This damage is
unnecessary and can be avoided by freezing the ethanol
content of gasoline at 10% by volume. NMMA has never
been anti-ethanol. We are simply opposed to fuel blends
that will ruin our engines and place lives at risk.
–Thomas J. Dammrich, President NMMA
There is a significant amount of technical and anecdotal
information that concludes that the introduction of
E10 into the gasoline supply has caused significant
damage and failure to boats. Although boat and engine
manufacturers have adjusted and now design equipmentto run on E10, the introduction of E15 will result in:
• Damage to rubber parts;
• water contamination in the fuel system due to
ethanol’s hygroscopic properties;
• increased water absorption and phase-separation of
gasoline and water while in tank;
• corrosion of fuel system components and fuel tanks;
• higher exhaust gas temperature due to enleanment;
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Rising Ethanol Blends Don’t Float All Boats (continued)
Source: #ReapealtheRFS - http://bit.ly/1aKg5A
performance issues, such as drivability
(i.e. starting, stalling, fuel vapor lock);
• damage to valves, push rods, rubber fuel lines and
gaskets.
– Minnesota Testimony, NMMA
Currently, there are nearly 13 million registered recreational
boats in operation in the U.S. No gasoline marine engine
– or any other marine equipment including gasoline
generators – currently in the field was designed,
calibrated, certified or is warranted to run on anything
over 10 percent ethanol.
EPA’s own “engineering judgment,” as well as all availabledata (supported by these two new studies), strongly
suggests that all of the 12.8 million registered boats on the
water today (with the exception of approximately 260,000
diesel-powered boats and the roughly 430,000 registered
non-motorized craft) may be negatively impacted by any
gasoline with more than a 10 percent ethanol blend.
– NMMA Petition to EPA
The Renewable Fuels Standard must be revised to
prevent the damage that ethanol blends above the 10%
level will cause to engines of all types. … Unless the
renewable fuels mandate is changed, it is likely that EPA
would require 35%-40% ethanol in gasoline by the year
2022. Every time EPA changes the percentage of ethanol
in gasoline, engines have to be recalibrated and engine
designs changed. – NMMA Policy Brief
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Resources
NERA Economic Consulting, “Economic Impacts Resulting from Implementation of RFS2 Program” http://bit.ly/12dJD2j
Coordinating Research Council, “Intermediate-Level Ethanol Blends Engine Durability Study” http://bit.ly/12dCjS0
Coordinating Research Council, “Durability of Fuel Pumps and Fuel Level Senders in Neat and Aggressive E15”
http://bit.ly/12dCHju
Rep. Sensenbrenner, “E15 Automaker Responses” http://1.usa.gov/12dCSLJ
AAA, “New E15 Gasoline May Damage Vehicles and Cause Consumer Confusion” http://bit.ly/12dCZqw
Environmental Working Group, “Senators Seek to Block Higher Ethanol Blend” http://bit.ly/12dD5yw
National Academy of Sciences, “Potential Economic and Environmental Effects of U.S. Biofuel Policy” http://bit.ly/12dF0TL
Stanford University, Center for Food Security and the Environment http://stanford.io/12dFfOO
Food and Agriculture Organization of the United Nations, “OECD-FAO Agricultural Outlook 2012-2021”
http://bit.ly/12dFk51
World Bank Policy Research http://go.worldbank.org/QPII43RIJ0
Schornagela, Niele, Worrell, and Böggemann, “Resources, Conservation and Recycling; Water accounting for (agro)
industrial operations and its application to energy pathways”, December 2011. www.elsevier.com/locate/resconrec
The National Academy of Sciences, “Potential Economic and Environmental Effects of U.S. Biofuel Policy”http://1.usa.gov/12dFt8l
Energy Tomorrow, Bob Greco Blog http://bit.ly/17JzgbE
Energy Tomorrow Blog, Mark Green, “The RFS is Broken” http://bit.ly/1997VzZ
Energy and Power Subcommittee, House Committee on Energy and Commerce, “Overview of the Renewable Fuel
Standard: Government Perspectives,” June 2013 http://1.usa.gov/1e3OKIU
Fill Up On Facts http://filluponfacts.com/
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