The Truth About Food and Fuel

The 24th International Fuel Ethanol Workshop & Expo was held June 16-19 in Nashville, Tenn., in the midst of record-busting energy prices and serious charges against the industry posed by Big Oil and "Big Food."
By Ron Kotrba, Dave Nilles, Kris Bevill, Jessica Sobo | July 08, 2008
The celebration at the 24th annual International Fuel Ethanol Workshop & Expo general session was bittersweet as the ethanol industry pioneer who hand-crafted the world's most renowned ethanol conference nearly a quarter-century ago—Kathy Bryan, president of BBI International—was absent for the first time since the show's inception due to her battle with cancer. "The industry wouldn't be what it is today were it not for Kathy," said Bob Dinneen, president of the Renewable Fuels Association. A woman with "indomitable spirit," in the words of Dinneen, Bryan received a heartfelt standing ovation from the audience and warm wishes for a speedy recovery.

Opening remarks were given by Mike Bryan, chief executive officer of BBI International. "It's been a year of success and tremendous abuse for the industry," he said, referring to the relentless attack on corn-based ethanol from all sides. "What bothers me the most is the abuse that agriculture is taking," he said, adding that the ethanol industry can't allow the continued vilification of the American farmer for raising the price of food.

Farmers in Tennessee know all about the utility of corn and adding value to its state crops. Tennessee Commissioner of Agriculture Ken Givens told the audience in Nashville, "We have a long history in Tennessee of adding value to corn products," referring to the state's rich history of whiskey distilleries. Despite this history, fuel ethanol is something relatively new for Tennessee, but the state is moving forward quickly to develop an environment conducive to renewable fuels production and use. Givens mentioned the $72 million state investment in a switchgrass-to-ethanol pilot plant developed by Mascoma Corp. in partnership with the University of Tennessee. The commissioner also said the state is working on the creation of green corridors where motorists can find ethanol- and biodiesel-blended fuels.

Motorists in Brazil don't have problems finding ethanol since 90 percent of all new vehicles sold in the South American country are now flexible-fuel vehicles, according to Joel Valesco of the Brazilian Sugar Cane Industry Association, who presented an update on Brazilian ethanol to the general session audience. The basis of Brazilian cane producers' new mode of production is a triple-product platform consisting of sugar, ethanol and power. The South American country will produce 6 billion gallons of ethanol this year and sell more than 3,000 megawatts of renewable electricity generated from cane byproducts back to its grid. Valesco said Brazil only uses 1 percent of its arable land to displace 50 percent of its gasoline; in a country where gasoline contains 25 percent ethanol. He said ethanol made in Brazil enjoys a 9.3 to 1 energy balance. While Brazil only uses 1 percent of its arable land for ethanol production, Valesco said only 1 percent of global arable land is used to grow crops for ethanol production, including U.S. land used to grow corn for the biofuel.

The "villain" is that guy who wants to eat better in China, not biofuels, Valesco said tongue in cheek.

No Mincing of Words Here
With his powerful presence, Dinneen told the audience that in January he thought his speech at this year's FEW would be a "victory lap" after the Energy Independence & Security Act of 2007 was passed, but since then, the vicious assaults on corn-based ethanol ramped up exponentially. According to Dinneen, the oil companies are behind it all. He said with the passing of the 36 billion-gallon renewable fuels standard, the oil barons saw one-third of their market share slipping away and concocted an enormous campaign against renewables. "They sit on editorial boards of every major newspaper," he said, adding that Big Oil "bought themselves some studies" and teamed up with major food companies to create a giant smokescreen. "They need to stop us now, but they won't," he said, adding that rising food prices are due in part to demand from developing countries like China and India, and changing diets of people around the world. "Now people want a pork chop with their rice," he said. Of course, the price of oil is paramount to this entire debate, and Dinneen hit home this message by saying, "We can't produce $2.50 corn with $4.50 diesel."

Speaking of oil, the morning's keynote speaker Robert Zubrin, author of "Energy Victory: Winning the War on Terror by Breaking Free of Oil," gave a compelling account of the Organization of the Petroleum Exporting Countries strategic will to power through the constriction of global oil supplies. In 1972, the United States spent $4 billion on oil imports, or 4.5 percent of the U.S. defense budget. In comparison, 35 years later, the United States is spending $650 billion on imported oil. As Zubrin put it, "$650 billion isn't just money, it's power." What's bad for wealthy countries like the United States is crushing for developing countries such as Kenya, he said. OPEC's "slow choke" on oil supplies is smarter than a complete shutoff due to the military consequences the United States would exact on such a move. To hammer home Dinneen's point about oil interests controlling the editorial content of major media outlets, Zubrin said the Saudis partially own the Wall Street Journal. The paper should be renamed the Wahhabi Street Journal, he quipped. "OPEC is taxing the industrial world into depression," he continued. The United States could open up the Arctic National Wildlife Refuge, but it would do little good. "That's a desperation card," Zubrin said. "It's not the way to go. Oil is trump right now, so how do we change the trump suit?" His answer is mandating all vehicles sold in the United States be flex-fueled, giving consumers a fuel choice. A flexible-fuel vehicle mandate would end the chicken and egg dilemma, and would make E85 pumps appear rapidly across the country. "This would crash the oil price to $50 a barrel," he told the crowd. "This is how you smash OPEC," he said. Once the U.S. farmers have produced all the ethanol they can, trade barriers should be abolished, beginning the importation of ethanol from friends in Latin America and elsewhere to help them reap the prosperity now enjoyed by OPEC countries, Zubrin said. "It would be a terrific financial engine for world development," he said. "Instead of selling Citibank to Saudi princes, we can be selling tractors to Africa. … We cannot afford to leave this power in the hands of the enemies of freedom."

Midlevel Blends Panel
The last leg of the general session was a panel on midlevel blends moderated by the general manager of Commonwealth Agri-Energy LLC, Mick Henderson. In Kentucky, where Commonwealth Agri-Energy is located, E10 is a new option for state motorists as of December, a time when ethanol marketers were busting into the virgin territory of the Southeast. Panelists included Robert White of the Ethanol Promotion and Information Council; Ralph Groshen, senior marketing specialist with the Minnesota Department of Agriculture; and Ron Graves, director of the fuels, engines and emissions research center at the Oak Ridge National Laboratory in Oak Ridge, Tenn.

White promoted his organization's new blender pump program campaign happening in South Dakota, where only 1,100 refueling stations exist in the entire state. EPIC launched the effort on May 1 with hopes to get 100 new blender pumps established in a year. There's a $5,000 incentive for approved applicants to use toward installation, and White said 29 stations applied in the first 45 days since the beginning of the program.

There has been some question recently as to the legality of selling midlevel ethanol blends, but White made it clear that blender pumps must be designated for flex-fuel vehicles only and cannot target legacy (gas only) vehicles. "The program can talk to the research but [station owners or signage] cannot advise customers to use midlevel blends in legacy cars," White said, adding that inside sources say EPA will begin strict enforcement of the FFV rule. Nevertheless it was mentioned that station owners can't stop people from using midlevel ethanol blends in their gas-only cars. "It's just like we can't stop people from putting diesel in their gas tanks," White said.

White also said 60 percent of the gas pumps currently on the market are indeed blender pumps of a sort; they blend premium gasoline and regular gasoline to make a mid-grade product, and over the next decade as more and more stations upgrade, 75 percent of all dispensers in the United States will be replaced, which would be a good opportunity to develop an ethanol blender-pump infrastructure, White said.

"At some point blender pumps have got to be certified," Groschen said. He spoke of Minnesota's E20 law and how it would be nullified if the state's fuel consumption by de facto constitutes 20 percent ethanol. Groschen also talked about the results of the 80-vehicle test the state conducted—40 pairs of identical vehicles, half run on E20 and half on E10, the state's "regular" gasoline, which to this point analyses has concluded no material compatibility or operability issues were encountered. Groschen also wondered if health effects
testing, required for any new fuel, could consist of extrapolation from results on E10 done years ago.

Graves told the audience that the U.S. DOE has issued $14 million to look at E15 and E20 blends in legacy vehicles and small engines. He says credible studies already on the books show nitrous oxide increases from emissions of legacy cars using E20, and the potential for premature catalyst degradation along with drivability problems for older vehicles. Graves said 11 or 12 vehicle tasks on this issue are to be performed, and some are already underway. Early results showed if in theory E20 were to lose 7 percent fuel efficiency, it only lost 5 percent, which is good news. He also said early indications are that no drivability concerns were detected in bumping up from E10 to E20 in vehicles tested so far. Some three-way catalytic converters got hotter than they should have, indicating that the engine did not run rich enough with E20. "We're on the brink of initiating an 80-vehicle study," he said, which will take two years to complete. Graves said EPA was concerned about small engines and midlevel ethanol blends, which is why the agency asked him and his team to look at them first. Increased temperatures and idling speeds were noted as side effects of running E20 in small engines, but he also noted that the variability in these types of
engines was so wide, and problems with temperature and idle speed were problems most noted with lower cost engines.

During the question and answer period, Groschen mentioned Brazil and its success in decreasing petroleum consumption. "[If automakers want to sell engines here, tell them] to get with it," he said. "Sometimes the right thing to do is mandate it."

Ron Kotrba is the senior writer and Rona Johnson is the features editor for Ethanol Producer Magazine. Reach them at rkotrba@bbibiofuels.com and rjohnson@bbibiofuels.com or (701) 738-4962.

Kris Bevill is a staff writer, Dave Nilles is the contributions editor, Hope Deutscher is the online editor and Jessica Sobolik is the managing editor for Ethanol Producer
Magazine. Reach them at kbevill@bbibiofuels.com, dnilles@bbibiofuels.com, hdeutscher@bbibiofuels.com and jsobolik@bbibiofuels.com or (701) 373-0636.