Archive for June, 2013

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FLORIDA: Last In / First Out of Ethanol Madness But Nothing Will Change

June 14, 2013

While some may celebrate the repeal of the state mandatory E10 law in Florida, I see nothing to celebrate because absolutely nothing will change in Florida.  The Florida law was actually passed and invoked long after it was obvious that the federal RFS mandate in EISA 2007 was going to swamp every state with E10, which is happening.  The repeal was a grandstand symbolic gesture to give drivers a choice.  The Florida politicians are patting themselves on the back for winning the battle but they lost the war before the state mandatory E10 law took effect in 2010, two year after EISA 2007 went into effect.

While the legislators may believe that the residents of Florida will now see more E0 at their corner gas stations, absolutely nothing will change.  One only has to look at the blending quota table in EISA 2007 and the gasoline terminal stock reports to know that there is no E0 generally available for autos.  While there is some premium ethanol free gasoline at most of the terminals in Florida, it is obviously for marine and off road use.  The primary supplier is Marathon Oil with their 90 AKI “Sport Fuel” which is intended for the marine, off road and small engine user.  The 90 AKI fuel is not legal to sell as premium unleaded fuel at gas stations, although it could be sold as mid-grade, but most modern fuel stations have 3 button pumps with tanks for regular and premium and mix the two to provide mid-grade, so most stations don’t have a separate tank for mid-grade.  It isn’t likely that Marathon means for this fuel to be sold for normal auto use and in fact when looking at the availability of E0 in Florida at Pure-Gas.org, most of this fuel is being sold at marinas.  It would only make sense for Marathon to sell this gasoline to known non road uses so that it wouldn’t have to account for any of it in their fuel quota for ethanol blending.  Otherwise, as we hit the blending wall this year, it would be costly to sell gasoline without ethanol and the price of this fuel would rise dramatically.

The other reason that I know that this was only symbolic is because the ethanol lobby didn’t crush this repeal.  There were only five states with mandatory state E10 laws and none of them has any purpose now that all of our gasoline will be E10 anyway.  Actually repealing the mandatory state ethanol laws might be a blessing in disguise for the ethanol lobby because most state mandatory E10 laws limit the ethanol blending level to E10 for non flex-fuel vehicles, thus prohibiting the sale of E15 in those states.

Finally, the ethanol lobby has a much bigger problem to worry about.  We will hit … no, we will crash into the blending wall this year and after this year there will be a requirement to blend ever increasing billions of gallons of ethanol into auto fuel, with nowhere to put that ethanol except in storage tanks because Renewable Fuel as described in EISA 2007 is E85 for which there is no demand. Strange thing is, E10 is not Renewable Fuel as defined in the act, in fact it is never mentioned in the act.  So how is it we are going to meet the Renewable Fuel Standard in EISA 2007?  EPA?  Any congress critter that voted for EISA 2007?  Anyone care to explain how this is going to work?

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