THE BLOG

Plans to Hike Ethanol in Gasoline Irk Some Gulf Residents

11/17/2010 10:05 am ET | Updated May 25, 2011

(This article was published in The Louisiana Weekly in the Nov. 15, 2010 edition.)

Drivers in South Louisiana have pumped E10 gasoline, containing 10 percent ethanol, into their cars as regular fuel for years -- unless they went out of their way to avoid it. But under a new federal decision, ethanol's share in regular gas is about to increase at your neighborhood station. The Environmental Protection Agency last month approved 15 percent ethanol in gasoline for 2007 and later car models, and intends to issue a ruling for 2001 to 2006 models by year-end.

Of the nation's many ethanol feedstocks, corn is the one that's blossomed industrially. That doesn't sit well, however, with some residents of Louisiana, where sugarcane and sweet sorghum are available for fuel. Environmentalists say river-born contaminants from Midwest corn fertilizers create the Gulf of Mexico's dead zone and threaten seafood output. Louisiana livestock and poultry producers fret about ethanol demand driving up feed prices, and locals -- like consumers nationally -- worry about the impact of corn fuel on food prices.

Members of the state's oil industry are also quick to point out ethanol's flaws as a fuel. You've probably wondered about the "No Ethanol" signs at independent gas stations in New Orleans and neighboring towns. Consumers who demand pure gasoline frequent those stations, and they're a different crowd from the drivers who tank up on readily available E10.

Because of U.S. government fuel mandates, drivers will probably inject greater amounts of corn ethanol into their tanks over the next two decades. Opponents are expected to put up a tough fight along the way, however. Last week, the American Petroleum Institute, representing 400 oil and gas companies, joined food industry groups in filing a lawsuit with the Federal Court of Appeals, seeking to overturn the EPA's E15 decision.

At River Ridge Pure gas station on Jefferson Highway, cashier Brandon St. Romain said "our sign out front says 'Ethanol Free' next to our prices, and that's the kind of gasoline we sell." He explained why some customers want 100 percent gasoline, and said ethanol can carry trash or residue buildup from a car's tank -- especially tanks in older cars -- into the engine. "It messes up fuel lines and eats rubber parts," he said.

St. Romain continued, saying "ethanol attracts water, which can be a problem in underground storage tanks at gas stations. If water accumulates and contaminates blended gas, unwanted water can get into your tank."

E10 gets less miles per gallon, and is cheaper than pure gasoline because the government subsidizes it, St. Romain said. River Ridge Pure gets a lot of phone calls about its gasoline and has plenty of boat customers. Ethanol can damage old, fiberglass fuel tanks in boats, and owners of antique cars and many motorcycle models are advised not to use it.

Mike Right, St. Louis, Mo. spokesman for AAA, the driver-advocacy group, said his organization does not object to E10, but does oppose E15. "E10 replaced MTBE and that was a positive," he said. Oxygenate MTBE or methyl tertiary butyl ether, blended into gasoline, was phased out by the federal government in 2006 because it threatened water supplies.

While E10 offers less energy per gallon than gasoline, today's cars can handle the mixture, whereas higher blends like E15 can cause automotive problems, Right said. "However, because of the federal Renewable Fuel Standard, the EPA rushed E15 through last month," he added.

The RFS program, required by the Energy Independence and Security Act of 2007, sets volumes for the amount of renewable fuel that must be used annually for U.S. transportation. The nation's 2010 RFS is 12.95 billion gallons. This year, 8.25% of a refiner's or importer's gasoline and diesel volume must be renewable fuel, according to the EPA. Those volumes and percents are slated to grow through 2022.

Right said "the Dept. of Energy is doing tests on vehicles using E15, but last month the EPA approved the use of E15 before the results of that study were available. Some car manufacturers have told customers they won't honor warranties if E15 is used."

Before the EPA reached its E15 decision, the Dept. of Energy tested 19 cars and light-duty trucks to see how they reacted to the fuel. But tests on vehicle models from 2001 and 2006 will not be finished until late this month.

"Ethanol comes with a lot of baggage," Right said. "It has pluses and minuses. Corn growers pushed for ethanol but livestock producers in the Corn Belt worry about it raising the cost of feed." In corn-producing Missouri, he has not seen any "no ethanol" signs at gas stations.

E10 has a 3 to 3.6 percent lower fuel economy than gasoline, according to the DOE and non-government researchers. As ethanol's share in gasoline increases to E15 or E20, fuel economy progressively declines. As for subsidies, gasoline blenders and oil companies receive a 45 cents per gallon tax credit for blending ethanol into gasoline. A tariff of 53 cents a gallon is levied on U.S. imports of Brazilian ethanol -- mostly made from sugar cane -- to keep it out. In addition, a number of this nation's states subsidize ethanol plants.

Subsidies that the U.S. ethanol industry receives from the federal government and states are only a fraction, however, of the incentives given to the oil industry, ethanol supporters said.

Blendstar, LLC in Houston operates a network of nine, southern and western U.S. terminals, including a Bossier City, La. facility, that distribute ethanol and biodiesel to hubs for major oil companies and independent fuel firms. Matt Griswold, Blendstar's president, said "consumers in most states favor ethanol. However, Louisiana is one of two states where I have seen "no ethanol" signs on gas stations." The other is Oklahoma.

Griswold continued, saying "among some consumers in Louisiana, there's a misunderstanding of what ethanol is and what it can do for the country. The government's Renewable Fuel Standard is very positive for the U.S. in that it reduces dependence on foreign oil, allows gasoline and diesel to burn cleaner, and creates jobs within the U.S."

He took issue with mileage critics, and said "when using ethanol-blended fuel, miles per gallon are the same or slightly lower than non-ethanol blended fuel," and cited findings to that effect from a 2005 fuel economy study by the American Coalition for Ethanol. "Much lower MPG is a common misconception about ethanol-blended fuel that has persisted in some areas of the country," he said.

Ethanol is a big employer, Griswold noted. In 2009, the ethanol industry supported more than 400,000 jobs in the U.S., according to the Dept. of Energy.

"A fraction of the blended gasoline from our Collins, Miss. plant is consumed in Southeast Louisiana," Griswold said. "Our Bossier City plant serves North Louisiana and East Texas. Several oil companies operating in Southeast Louisiana receive ethanol by barge and rail from the Midwest and do their own blending in gasoline for the local market." Blendstar usually serves markets that have no other ethanol distribution system.

One big, local blending facility is Motiva's Convent refinery in St. James Parish on the Mississippi River north of New Orleans. Ted Rolfvondenbaumen, Shell North America spokesman, said the Convent refinery blends ethanol with gasoline but does not manufacture ethanol. "We cannot discuss the specific amount of ethanol-blended gasoline distributed from the site for competitive reasons," he said. Motiva Enterprises LLC is a joint venture between Shell Oil Co. and Saudi Refining Inc.

Louisiana's ethanol industry has had many starts and stops. In the last decade or so, plants that were planned have been scrapped because of the recession and gyrations in ethanol, grain and sugar prices. In the 1980s, a handful of ethanol plants operated, but by the end of 1990 they had closed after state ethanol subsidies were removed.

In Jennings, La, BP runs a pilot plant or demonstration facility, acquired in July from Verenium Corp., using sugar cane bagasse or waste. Tom Mueller, BP spokesman in Houston, said "the facility is small, with capacity of about 1.4 million gallons per year, and is designed to demonstrate production of cellulosic ethanol on a small scale. Since this is a research facility, production volume is very low and is not marketed externally." The facility employs about 75 full-time staff and several dozen contractors.

Mueller said BP will use what it learns from the Jennings plant to build a large, commercial, cellulosic ethanol operation in Highlands County, Fla., and plans to break ground there next year.

In the past five years, BP has made significant investments in biofuels development, and has stakes in cellulosic ethanol in the U.S., cane ethanol in Brazil, wheat ethanol in the UK, and next-generation biofuels -- including biobutanol -- Mueller said. Biobutanol is an alcohol made from crops that can be blended with gasoline.

Meanwhile, Louisiana State University's Audubon Sugar Institute and Sugar Research Station at St. Gabriel, La. and the U.S. Dept. of Agriculture's cane station in Houma have developed varieties of "energy cane" that can be used for ethanol, biobutanol and specialty chemicals. Commercial cane and sweet sorghum output is seasonal, but to be efficient biofuel plants need to run year-round so researchers have considered ways of rotating feedstocks.

At non-profit Gulf Restoration Network in New Orleans, communications director David Favre said his group opposes using more corn ethanol in gasoline. Midwest corn fertilizers produce nitrogen and phosphorous runoff in the Mississippi River and a dead zone at the river's mouth in the Gulf of Mexico, he said. The size of the dead zone, where few organisms survive, changes seasonally with farming practices, but can cover up to 7,000 square miles of Gulf water.

Ethanol is a prime example of why government policies are not the optimal way for the nation to become greener, according to Walter Lane, associate professor and chairman of the Economics and Finance Dept. at the University of New Orleans. "Ethanol may stretch out gasoline, but if the government were really looking for ways for the country to be more self sufficient in energy, it wouldn't be through ethanol," he said. "The apparent reason for the ethanol program is not because it was the best answer, but rather it is to subsidize corn growers because of pressure from the powerful corn lobby."

Industry experts predict that filling stations in Corn Belt states will be the first to sell E15 as regular gasoline, starting early next year. Meanwhile, Louisiana law requires that decals describing contents be displayed on pumps dispensing ethanol-blended gas. end