What Is the EPA Doing With Your Gasoline?

It may be easy to question now at the height of an American energy boom, but the Environmental Protection Agency had good intentions when it announced the Renewable Fuel Standard in 2005. At the time, energy independence seemed like a pipe dream, domestic fuel consumption was hitting record highs each year, and the nation's auto fleet was by no means topping the charts in efficiency. Many experts questioned whether the nation would ever be free of imported oil. Igniting a national biofuels industry could have huge implications if the EPA was successful. What did the country have to lose?

Agribusiness giants such as Archer Daniels Midland  (NYSE: ADM  ) went all-in on the new corn ethanol industry, using their massive distribution network to supply billions of gallons of fuel each year. Even refiners such Valero  (NYSE: VLO  ) saw an opportunity to incorporate biofuels into their operations and offset blending costs by creating a vertically integrated energy business. The system works (it has its flaws), but refiners and ethanol producers have been butting heads at an increasing rate in recent years. Especially in 2013. 

Where is everything headed? Should the RFS be fixed or abandoned completely? The complicated mandate is explained in several charts and graphs in the following slide show.

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  • Report this Comment On August 18, 2013, at 1:22 PM, True411 wrote:

    It's important to understand that a gallon of ethanol does not displace a gallon of petroleum. Farmers and ethanol processors use diesel to run the tractors and trucks used to process the corn. Also, a gallon of ethanol only has about 67% of the energy content of a gallon of gasoline.

    Studies show that Ethanol production does better than breaking even; it produces more energy than it consumes, BUT NOT BY MUCH. Production of 120 gallons of Ethanol displaces only about 20 gallons of petroleum because of all the petroleum used in its manufacture.

    Producing 120 gallons of Ethanol creates a lot of environmental damage just to net the equivalent of 20 gallons of gas.

  • Report this Comment On August 19, 2013, at 9:37 AM, sjlevine34 wrote:

    Your slide show makes no mention of the risk of engine damage from blends greater than E10. My objection to E15 is that no engines are certified by the manufacturers for it currently. I am not about to use E15 in my 2008 Toyota Yaris (even though it seems to do better with E10 than 100%) because I simply cannot not afford to shorten the life of my car.

    Your credibility has dropped considerably with me because you avoided this critical issue with ethanol-containing gasolines.

  • Report this Comment On August 19, 2013, at 12:00 PM, TMFBlacknGold wrote:

    @sjlevine34

    I understand the controversey surrounding higher blends of ethanol, but the EPA studied it not too long ago and found that nearly all cars made since 2001 would be fine. Ethanol is damaging to engines if it sits for long periods of time, so smaller engines such as lawnmowers are at much greater risk than cars, which get used quite often.

    Additionally, Ford recently found major advantages for fuel blends of E15 or greater:

    http://www.sciencedirect.com/science/article/pii/S0016236112...

    --Maxxwell

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