Burlington, Colo. — Since Stratton Equity Co-op installed Colorado’s first “blender pump” offering a range of ethanol based fuels last April, interest has slowly been rising, right on track with national ethanol usage overall.
“We’ve had a gradual increase in usage,” said Mike Webber, the station manager. “Primarily I would say it is ag-based people and yuppies, the ones who are searching us out on the Internet using websites like ethanolfinder.com.”
Local auto dealerships here are also pushing flex fuel vehicles that can run on up to 85 percent ethanol. The technology is now widely available on new car models.
Webber estimates the station, located on the north edge of town, goes through about 400 gallons of ethanol daily. A bushel of corn produces a little more than two and a half gallons of ethanol. Last week, the ag department approved a new biotech corn, invented by Syngenta, that could increase the output of ethanol per bushel while reducing use of water, energy and chemicals in the production process.
In late January, the Environmental Protection Agency increased the potential market for grain-based ethanol fuel by approving the use of 15 percent ethanol gasoline in newer vehicles. The agency is still studying the effect on vehicles built before 2001, but an estimated 62 percent of vehicles on the road are now recommended for E15 use. A blend with 10 percent ethanol is already widely available as an alternative to unleaded gasoline. Ethanol promoters would like to see E15 take its place.
Mark Sponsler, executive director of Colorado Corn, said EPA’s announcement sent a positive signal.
“It gives some confidence to the ethanol industry,” he said recently as he stopped at Stratton Equity to fill up one of the organization’s three corporate flex fuel vehicles which are painted up to promote farm-based renewables.
Still, he said, in practical terms growth of the industry is being slowed by several speed bumps. For one thing, drivers have been frustrated by a mileage drag of 3 mph, or roughly 15-20 percent, that forces them to pay extra for using it.
“The fact of the matter is we are burning a superior fuel in an engine optimized for petroleum fuels,” Sponsler explains in presentations he makes to groups like the Colorado Conservation Tillage Association, which recently held its annual no-till conference in Burlington. “Car racers love ethanol: it creates better performance and less wear.”
The National Corn Growers Association recently formed a partnership with Growth Energy, a renewable fuels organization, and NASCAR to promote the use of corn-based American ethanol on the stock car racing circuit. Sunoco E-15 is now the official fuel of NASCAR.
But when it comes to everyday autos, Sponsler calls it a “chicken and egg” scenario: though cars can be modified to run on ethanol fuels, with only around 100 E-85 stations in Colorado and 2,500 nationwide, many drivers don’t have consistent access to high percentage ethanol fuels.
Converting stations is also hindered because it costs them more to segregate and handle ethanol blends. Webber, who has managed the station in Burlington since 1982, said Stratton Equity had to put in new tanks and piping to install the blender pump.
States provide various subsidies for fueling stations to make the upgrades, he added, and without that, it would be difficult to make the economics work.
Wally Tyner, an agricultural economist at Purdue University, recently released a report theorizing that ethanol blending has reached a saturation point at the current consumption level of 13 billion gallons annually, based on the U.S. fuel infrastructure and the capacity of the nation’s vehicle fleet. He questioned whether a federal Renewable Fuel Standard requiring an increase in that rate to 36 billion gallons per year by 2022 can be met without the development of new technology or products.
Such arguments have spurred interest in what are called advanced ethanol products, those that use feedstocks like grass, stalks, wood and municipal wastes or algae in place of grain.
Grain ethanol is fighting a public relations headwind. Some environmentalists oppose the petroleum-heavy farming practices and high water use required to produce it.
It’s even controversial among farmers, because it is assumed to drive up feed costs. Last week, corn futures shot up over $7 a bushel, after the ag department lowered its forecast for U.S. corn ending stocks in the year ending in September, citing stronger use for ethanol and high fructose corn syrup.
The government mandates gasoline blenders use 12.6 billion gallons of biofuels in 2011, up from 12 billion in 2010. Rising food prices worldwide are a concern: groups like Washington’s Earth Policy Institute complain that 40 percent of the nation’s corn crop is being diverted from food to fuel.
Vice President of Research for the Renewable Fuels Association, Geoff Cooper, said U.S. ethanol production utilizes just 3 percent of the world’s grain supply on a net basis. He added that booming corn exports are partially responsible for higher prices.
Federal subsidies supporting the ethanol industry have also drawn criticism. But Sponsler said the petroleum business receives 11 times more subsidization while externalizing many of its costs onto the public, including the military defense of oil interests in the Middle East.
Sponsler defends the blenders tax credit of 45 cents per gallon as the only way to give drivers a farm-based option at the gas pump.
“Ironically, it doesn’t go to farmers. It doesn’t go to ethanol plants. It goes to the oil industry, because they own the infrastructure. But it’s a way to elbow our way into the marketplace,” Sponsler said.
The federal tax credit lasts through the year but will require re-authorization after that.
In a sign of rising political tensions ahead, Republican lawmakers offered amendments this week to block E15 from gaining more market share and to bar the ag department from funding the installation of additional blender pumps.
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