EPA reportedly delays E15 decision on older vehicles

The US Environmental Protection Agency reportedly has delayed making a decision on the use of gasoline with 15% ethanol in cars and pickup trucks built from 2001 to 2006.

As of Nov. 23, Oil & Gas Journal had received no official statement from EPA regarding the delay as reported by some other media outlets.

The American Petroleum Institute greeted the reported delay as welcomed news while the Renewable Fuels Association expressed disappointment.

RFA Pres. and Chief Executive Officer Bob Dinneen encouraged EPA to extend due diligence to testing for all cars and pickups, regardless of age. RFA is a trade association for the US ethanol industry.

“We believe the fuel testing to date clearly demonstrates the efficacy of E15 as a motor fuel for all light-duty vehicles," Dinneen said.

API Downstream Director Bob Greco said API previously suggested EPA should extend its review 6 months or more to allow scientific testing to be completed on the effects of E15 on the engines of older vehicles.

He noted the US oil and natural gas industry is the biggest consumer of ethanol and other biofuels.

“We support a realistic and workable Renewable Fuel Standard and the responsible introduction of increased biofuels in a manner that protects consumers,” Greco said. “However, rushing to allow more ethanol before we know it is safe could be disastrous for consumers and could jeopardize the future of renewable fuels."

On Oct. 13, EPA partially waived its 10% limit on ethanol, allowing up to 5% more for model year 2007 or newer cars and light trucks. DOE said testing was under way on E15’s use in 2001-06 model year vehicles, and the agency had expected to announce a decision this month. But as of Nov. 19, that decision reportedly has been delayed for up to 30 days.

Baker Institute study on biofuels examines ethanol spills

A recent study by Rice University’s Baker Institute concludes that the US needs to reconsider its policy to promote grain-based ethanol.

The study, “Fundamentals of a Sustainable US Biofuels Policy,” questions the economic, environmental, and logistical basis for federal subsidies that support US ethanol producers. Amy Myers Jaffe, associate director of the Rice Energy Program, was one of the authors of a paper about the study's results.

A research grant in environmental engineering from Chevron Technology Ventures supported the study on biofuels.

The study notes that increased use of ethanol increases the likelihood of leakage of ethanol into water supplies and the environment, often when ethanol is blended with gasoline.

Underground storage tanks are a principal source of this contamination. Metal containers are prone to corrosion and leaking. Already, there have been more than 479,000 confirmed releases of which 377,000 have been cleaned up.

Releases of ethanol likely will lead to some altered remediation approaches, the Baker Institute study said. But rather than the dangers of direct exposure to ethanol, the greater risk to human health comes from the potential for BTEX mixed with ethanol, which is more difficult to degrade. BTEX stands for benzene, toluene, ethylbenzene, and xylenes.

Conference examines state of the ethanol industry

Bob Dinneen, president of the Renewable Fuels Association, expects the US ethanol industry will survive the world's financial crunch, coming out as a stronger, more competitive, and more sustainable industry.

Speaking to the National Ethanol Conference in San Antonio, Tex., on Feb. 24, he reported the US has 171 ethanol plants in operation and 21 more under construction.

“While I also see the 23 [ethanol plants] that are currently idled and know that more may well follow, I firmly believe that is a temporary misfortune that will be corrected when the economy turns around and the market rebounds,” Dinneen said.

Several companies are racing to be the first to produce commercial volumes of cellulosic ethanol in the US. Currently, nearly all the ethanol produced in the US comes from corn.

Dinneen noted a few pilot plants in the US produce cellulosic ethanol along with at least one demonstration plant in Canada. The ones of most interest to Oil & Gas Journal are companies having joint ventures with oil companies.

Verenium Corp. is producing ethanol from bagasse and sugar waste at a demonstration plant in Jennings, La., that can produce 1.4 million gal/year. Verenium and BP PLC formed a joint venture to commercialize cellulosic ethanol from nonfood stocks.

Iogen Corp. is producing ethanol from wheat straw at an Ottawa plant and has plans to build commercial scale facilities in the US and Canada. Iogen and Royal Dutch Shell PLC have a cellulosic ethanol alliance.

Meanwhile on the international front, three of the world’s largest ethanol trade associations have formed a global biofuels organization called the Global Renewable Fuels Alliance (GRFA). Its 29 member countries represent 60% of the world’s renewable fuels production.

Dinneen’s RFA, the Canadian Renewable Fuels Association, and the European Bioethanol Fuel Association cooperatively formed the GRFA. Brazil is not yet a member but Dinneen said GRFA is in talks with Brazil’s sugar cane ethanol industry.

Cleantech investment continues

Despite diminished fourth quarter results, venture capital funding continues in the clean technology category, said the Cleantech Group of San Francisco.

During 2008, cleantech venture investments reached a record $8.4 billion despite the credit crisis and broadening recessions. That total accounted for investments in North America, Europe, China, and India.

It was the seventh consecutive year of growth. Nicholas Parker, Cleantech Group executive chairman, remains optimistic despite the financial crunch.

"Now, more than ever, clean technologies represent the biggest opportunities for job and wealth creation," he said. "In 2009, we're going to see a lot of progress in terms of imagining what's possible, and consensus around the need to really take it up a gear."

Cleantech reports solar accounted for $3.3 billion of the cleantech VC investment last year followed by biofuels at $904 million. Transportation (electric vehicles, advanced batteries, fuel cells) was $795 million, and wind accounted for $502 million.

I wonder if the pattern of spending by major oil companies on alternative energy follow the VC distributions. My hunch is that the majors collectively are spending more on biofuels than on solar. Any comments from industry are most welcome.