Getting Biofuels to the Pump

Chevron, BP, Exxon and friends talk a big game on renewable fuels, but it's like Silicon Valley vaporware: all buzz, nothing in production. That's the other half of the story on the sudden U.S. ethanol glut.

The Wall Street Journal and the New York Times had similar stories last week--ethanol's price is suffering from overproduction and lack of transport for a finicky fuel. The stories stayed within the financial-analyst silo of the MSM. Who might go bankrupt? (The little guys.) Who might win big? (Archer Daniels Midland, the likely titan of corn ethanol.) They ignored the integrated oil companies' role.

I'll agree that the overproduction is partly the fault of a new industry with the business instincts of a greedy toddler. The other often obsessively described faults of corn ethanol include the energy it requires to produce, its dependence on a soil-destructive monocrop, its effect on corn prices and controversy about its overall reduction in polluting emissions.

However, corn is also a necessary part of a transition to renewable fuels. It's easy to grow and process. Making it does not require homage to brutal dictators. It's the predecessor to cellulosic ethanol and fuels brewed from municipal waste. A distribution system for E85 is also a distribution system for biodiesel, which suffers much the same indifference and hostility from Big Oil.

As Business Week pointed out in its Oct. 1 issue, Big Oil is campaigning to trash ethanol as a credible fuel. Why wouldn't they? Every dollar to ethanol is skin off their backs. If they can't control it, they certainly won't encourage it.

Anyone can grow corn or switchgrass or gather old french-fry oil. As my bootlegger great-uncle John would have said, almost anyone can build a distillery. Biofuels are--so far--a decentralized, competitive and transparent industry. If we were stuck with corn fuel, ADM or Monsanto could change that. But biofuels don't fit the Big Oil business model. No matter what the integrated oil companies say about going green, they hate decentralization.

The contracts between branded retail gasoline dealers and their supplier companies make it difficult to impossible for mainstream gas stations to sell E85. None of the majors offer subsidies to put in biofuel pumps, or supply a branded version of E85 or biodiesel. The paltry 1,000 stations nationwide selling E85 are mainly in the Midwest, the political and physical home of ethanol.

In California, the state government bought GM flex-fuel vehicles that run on E85, but there's still not a single station in Sacramento where they can fill up. There are 6 million flex-fuel vehicles on the road nationwide (and GM got a thick coat of greenwash out of its "Go Yellow" flex-fuel campaign). But it's a sure bet that most of those vehicles run full-time on gasoline.

Yet there is no logical distribution path for biofuels except the branded corner gas station or highway truck stop. A parallel system would be wasteful, even if there were enough stupid capital out there to fund it.

So why did BP build a steel-clad and LED-lit Beverly Hills-adjacent gas station, promote it as the nation's "greenest", then sell nothing but three grades of gasoline? Because BP and Exxon can't pull ethanol out of the ground for as little as $10 to $15 a barrel, sell it for $80 to their own refineries, make another $30 turning it into gasoline and control its retail sale. Their hostility is not just about corn ethanol. Oil companies are flexing their collective political muscle against it to put the brakes on any renewable fuel alternatives that undercut them. Hydrogen, the real fantasy fuel, is embraceable because it requires huge industrial plants to produce.

So when and if the ethanol producers start to go under, go ahead and blame Big Oil.

Comments

[TimR]

What do democratic Oregon Governor Kulongoski, republican Congressman Greg Walden, an Eastern Oregon Wheat farmer and a barge operator have in common? They were all among the 500 people in Boardman, Oregon on October 5th celebrating the grand opening of Pacific Ethanol's state-of-the-art biorefinery, Oregon's first opportunity to produce its own motor fuel. This video shows how renewable fuels are breaking down old political barriers between urban and rural America.



http://www.youtube.com/watch?v=ckWs_JQ1R-Q



Oregon is doing renewable fuels right--having passed a landmark legislative package that ensures market access; creates incentives for local feedstocks; and encourages efficient production and investment in new technology. The policy is already translating into on-the-ground investment. Oregon provides a great model for other states across the country looking to reap the economic and environmental benefits of renewable fuels.

[Biofuelsimon]

Thought I'd better back up that stuff about leaky tanks. This should do the trick www.purdue.edu/envirosoft/fuel/src/overview.htm

[Biofuelsimon]

One of the issues with the current US gasoline distribution system is that the pipework and storage tanks are not of the best quality. It doesn't matter if the liquid you're selling as fuel doesn't mix with water (sure some of it will leak, but if it doesn't taint the groundwater, who in the oil industry cares?).It's different with ethanol which absorbs water. Its not good putting water in your gas tank, it kinda slows combustion. Sure big oil doesn't like the idea of ethanol at the moment but it would have to significantly up the quality of its infrastructure if it did decide to do something radical like get back-integrated to corn like it is back-integrated to crude. But with oil at just over $90/bbl who needs to be imaginative in the oil industry?

[realitytrumpsbull]

I wonder how fast a TURBO ethanol car would go...hmmm.....

[biodieselmama]

E85 isnt in California more because we already have a mandate to have up to 10% of ethanol in all of our gasoline. Big Oil by state law has to put ethanol in all the fuel. There has not been enough ethanol to put 10% so we have had around 6% ethanol in the fuel for about 6 years. This is a pollution control issue rather then a renewable fuel issue. Also the CA Air resource board has not approved E85 as a road fuel yet only as an experimental fuel. It is almost finished with the extensive testing needed to pass before becoming a approved road fuel again based on emissions rather then renewable issues. Independent gas stations is where E85 will start showing up. Biodiesel in California is also still an experimental fuel and can be sold at B20 level at a retail facility, but in higher blends it must be sold as part of a fleet or co-op that provides education about the fuel and signing a users agreement stating that you understand this is an experimental fuel and that the buyer takes all the risks for using the fuel.
I.E. they cant sue the seller if they need new injectors. Biodiesel is just starting this year the extensive emissions testing to become a certified fuel in california at higher blends then B20.
I have been part of a co-op for 3 years and running my 1985 mercedes on B99 for all that time, with no fuel issues. A local independent gas station in my area just added B20 to the pumps at six of his locations and one is near my house. I am using B20 now in my new work truck, a Ford Excursion. So far no issues.

Kari Lemons
Greenstock LLC

[LizDGS]

October 11, 2007
Judy Dugan
The Huffington Post
Dear Ms. Dugan,
In response to your blog "Getting Biofuels to the Pump" I would like to point out an inaccuracy in your reporting.
The following statement is false: "In California, the state government bought GM flex-fuel vehicles that run on E85, but there's still not a single station in Sacramento where they can fill up."
The Sacramento state garage at 1416 10th Street is offering E-85 to all State agencies that have E-85 flex fuel vehicles in the area. The Garage is open Monday through Friday, excluding state holidays, from 7:00 a.m. to 9:00 p.m. This could have easily been discovered by visiting the California Department of General Services (DGS) Fleet and Asset Management homepage at www.ofs.dgs.ca.gov.
We appreciate your interest in alternative fuels such as E-85. We ask that you correct the statement in your blog and in the future verify information for accuracy. Thank you for your cooperation.
Sincerely,

Liz Gransee
DGS Public Affairs

[Fooloil]

A truly splendid piece which gets right to the heart of the matter. Those of us who want to break free of big oil's hold can do it ourselves, with a little help from the community. A new book shows how.

Perhaps Ms. Dugan would call author David Blume's CSE's (Community Supported Energy Coops) a "wasteful parallel system" but hey, I'd rather put E-98 in my car than E-85 anyway. The book shows how we can do that too.

[ImmanuelGoldstein]

The reason these disadvantages are so 'obsessively' discussed is because they are real, the same reason physicists 'obsessively bring up that second law of thermodynamics when somebody brings up perpetual motion.
Biofuels are a fraud. They are part of the fantasy that we will be able to keep cars running forever without paying an ever higher price.

Until the energy debate gets beyond, 'how do we fill up the cars' no progress will be made. Until we start to see cars as the problem,we will keep 'spinning our wheels' and we'll be having this exact same debate in 20 years.