It Isn’t The Blending Wall We Should Be Worried About

New Math At The EPA

If you look at consumption statistics from the EIA you would find that the US consumed about 42 billion gallons of diesel and 136 billion gallons of auto gas in 2009.  Those stats show a decline in diesel usage and a tiny increase in auto gas usage over 2008, a year when both stats declined over 2007.  In 2009 the EPA mandated that 10.2% of that total consumption of 178 billion gallons of liquid hydrocarbon fuel be from renewable resources.  That would result in about 18 billion gallons of renewable fuel of which at least 10.5 billion gallons had to be fuel ethanol as outlined in the table in EISA 2007 (Section 202, page 31).  What is strange is that .6 billion gallons had to be “Advanced Biofuel” resulting in the total RFS requirement of 11.1 billion gallons.  So what was the other 6.1 billion gallons required by the EPA?

The EPA has just announced the 2010 standard.  The EIA 2010 projection is:  “Consumption of motor gasoline rises by 50,000 bbl/d, or 0.6 percent, and distillate fuel consumption increases by 80,000 bbl/d, or 2.1 percent.”  This would result in a diesel usage of  almost 43 billion gallons and an auto gasoline usage of  almost 137 billion gallons for a total of 180 billion gallons of liquid hydrocarbon fuel.  The EPA has set the renewable fuel mandate to be 8.25% or almost 15 billion gallons of renewable fuel.  Quite a drop don’t you think?  Of the total 12 billion gallons has to be fuel ethanol and .95 billion gallons has to be “Advanced Biofuel” for a total RFS mandate required by EISA 2007 of 12.95 billion gallons.  So what is the other 2.05 billion gallons of renewable fuel required by the EPA?  Anybody know?

Now here is the real problem, discounting the math which doesn’t obtain.  This year there was supposed to be 100 million gallons of cellulosic ethanol in that .95 billion gallons of “Advanced Biofuel” number according to the hard coded table in EISA 2007.  The EPA has lowered the quantity to 6.5 million gallons required.  Anybody noticing the huge difference! The change was made after 30 companies said they could not produce the required 100 million gallons.  Thirty companies couldn’t come up with 100 million gallons of cellulosic ethanol?

Do you know how many years the government has been throwing your tax dollars at cellulosic ethanol?  According to The Cellulosic Ethanol Site “Modeling and experimental studies on dilute hydrolysis systems were carried out during the first half of the 1980s. DOE and USDA sponsored much of this work.”  The industry has said that a viable commercial cellulosic ethanol process is five years away for the last three decades and today they still say that “we are only five years away from a viable cellulosic ethanol process”.  And according to the above site your tax dollars are still being showered on them:  “In March 2007, the US government awarded $385 million in grants aimed at jumpstarting ethanol production from nontraditional sources like wood chips, switchgrass and citrus peels. Half of the six projects chosen will use thermochemical methods and half will use cellulosic ethanol methods.”  Apparently none of those 2007 grants produced much of anything since 30 companies can’t even make 100 million gallons of ethanol this year.

But the real crux of the problem is that after 2015 all of the increase in the ethanol mandate in EISA 2007 must be met by “Advanced Biofuels”, corn ethanol will be capped at 15 billion gallons.  In 2015, 6.5 billion gallons of “Advanced Biofuel” must be produced of which at least 3 billion gallons must be cellulosic biofuel (ethanol).  Never mind that the ethanol blending wall will be met no later than 2012, the true idiocy of the RFS mandate in EISA 2007 will be totally exposed when there is no way to get from 2015 to 2022.  Of course none of it will be needed unless the ethanol industry, Congress and the auto industry figure out how to move to E85 which was the whole point of EISA 2007 in the first place.  Read the act, it is a corporate welfare act for E85.  E10 is never even mentioned and there is no corporate welfare for E10, E15, ad nausea other than the blenders credit which actually pays for infrastructure upgrades for the oil distribution industry.