Ethanol Completes the Puzzle

We have a tremendous opportunity to make the case in the Midterm Review in what EPA says will be a "data driven and transparent process." We can show how carbon reductions are indeed possible using ethanol.
By Dave VanderGriend | April 06, 2016

The industry has a tremendous opportunity in the upcoming Midterm Review to make the case that ethanol can help the nation reach its goals of increased fuel economy while reducing greenhouse gases on the path that leads to higher ethanol blends.

The best way I can explain how carbon reduction, gas mileage, higher octane and greenhouse gases (GHG) fit together is to look at it like a puzzle. When you look at each of the Midterm Review puzzle pieces individually, it is hard to see how we get to the picture on the box.

Like me, do you wonder why auto manufacturers want higher octane and how that connects to carbon reduction? Ethanol is the piece that completes the puzzle on how the auto industry will fulfill the tougher light-duty vehicle standards. 

In 2012, the U.S. EPA and National Highway Traffic Safety Administration called for 54 miles per gallon (mpg) by 2025 under the new Corporate Average Fleet Efficiency standard. That’s a whopping 60 percent increase over 2011’s 34 mpg. 

Connect that to the second puzzle piece which is the Obama Administration's determination to reduce petroleum use as a means of cutting greenhouse gases. According to the EPA, the transportation sector is responsible for 34 percent of all CO2 emissions and light-duty vehicles are responsible for more than 65 percent of that.

In the end, we likely will see the CAFE standards merged into a GHG reduction program in which vehicle efficiency will be measured in grams per mile GHG emitted, in addition to miles per gallon.
While not unprecedented, it is unusual to create a regulatory program reaching 13 years into the future. To do so requires multiple assumptions. When the new standards first were announced, the EPA incorrectly predicted expensive oil, reasonably priced and available electric vehicles, and most importantly, eager consumers. This is a problem when most of the expected CO2 reductions are based on smaller cars and electric vehicles.

In a rare instance of rational thinking in Washington, the EPA promised to do a Midterm Review to assess the success of the light-duty vehicle standards. This is important to the auto manufacturers because they are the ones who are burdened with meeting the requirements and this is where ethanol, specifically midlevel blends, can help save the day.

In the Midterm Review, the EPA states it will evaluate the long-term standards to determine if those levels still are appropriate, looking at key factors such as fuel prices and the market penetrations of new technologies, notably electric vehicles. We already know the answer to both those questions and it is highly unlikely we can achieve anything remotely close to the carbon reduction targets—unless we embrace higher ethanol blends.  

We have a tremendous opportunity to make this case in the Midterm Review in what EPA says will be a “data driven and transparent process.” We can show how carbon reductions are indeed possible without drastic changes in vehicles, driving habits, or increased costs, while giving automakers the high octane they need to design more efficient engines.

The Urban Air Initiative’s research confirms substantial carbon savings are achieved with high-octane E30 blends. Refiners would use less energy and the ethanol would replace carbon-intensive aromatics currently used to boost octane.

In addition, Urban Air’s recent report to the Office of Inspector General details the huge improvements in the carbon footprint of corn, based on yield increases and better understood carbon sequestration performance. We argue corn ethanol’s GHG reduction compared to baseline gasoline now is closer to 50 percent—far greater than the roughly 20 percent GHG reduction now attributed to corn ethanol. 

  
The draft of the Midterm Review is scheduled to be available for public comment in June and the final rule is expected in 2018. The Urban Air Initiative will put significant resources into this effort and, in so doing, create new demand, based on real value that will grow our industry for decades to come.
When we all work to put more pieces together, the picture is bright for ethanol.


Author: David VanderGriend
CEO, ICM Inc., President, Urban Air Initiative
DaveV@icminc.com
316-796-0900