Looking for Love in All the Wrong Places

Doug Durante, Executive Director, Clean Fuels Development Coalition

There was a great country music song in the 1980s by a guy named Johnny Lee titled "Looking for Love in All the Wrong Places." I feel at times that could be a soundtrack for ethanol as the industry slogs its way through the mud of politics and big oil looking for love in the form of increased demand. In recent years, it has been Sustainable Aviation Fuel (SAF) and recently ethanol as a marine fuel getting attention. Both face significant challenges and at least for now may be the wrong places to look as compared to the world's largest gasoline market right in front of us.

For starters, the push for alternatives to petroleum in both aviation and marine use markets are in large part based on reducing carbon and greenhouse gases. As I wrote about last month, during the Biden administration, reducing carbon was everything. Regulations and policy essentially dictated massive changes in our fuels and automobiles. With the Trump administration completely reversing course, beginning with their new determination that GHGs does not represent a health risk, we are witnessing the fallout from carbon-based business decisions. The auto industry is absolutely reeling, with new reports every day about layoffs and plant closures as the zero emission dreams of EVs face reality. Billions of dollars in clean energy projects have been scrapped across the country. The 45Z tax credits have yet to be finalized and only have a few years of life to begin with before expiring.

The aviation industry is on record stating subsidies and incentives are critical to SAF, and we have learned over the years the dangers of relying on subsidies that expire. As soon as the International Maritime Organization proposed carbon reducing regulations, the Trump administration threatened tariffs and other punitive measures on countries that enforced these measures. Even when carbon reduction was all the rage, Sustainable Aviation Fuels and Marine Fuels combined only represent roughly 6 percent of global GHG emissions.

Furthermore, these potential new ethanol markets like marine and aviation face stiff challenges from other technologies and fuels both from an economic and performance standpoint. In contrast, we know that ethanol stands alone as a proven additive to gasoline providing clean octane to the 270 million light-duty vehicles on the road today. E15 is a great start but to maximize that opportunity we need to be pushing for much greater blend volumes. We see in real time how 15 percent blends are reducing gas prices, an E30 blend would be twice as nice.

Lastly, and certainly not to be forgotten, is the role of ethanol in protecting public health, which despite what EPA says, is still their mission. Ethanol is and can continue to replace the carcinogenic aromatics refiners use for octane and reduce the toxic particulates that are directly tied to the family of benzene compounds. The late C. Boyden Gray was White House Counsel to President George Bush and one of the architects of the Clean Air Act. We worked closely with him on fuel provisions of that legislation and on more than one occasion when asked why he supported ethanol, Boyden would simply say, "because it saves lives!"

Again, E5 is a great step forward but with just one point of octane it falls short as a real game changer for replacing aromatics. The truly higher blends like E30 double up everything and can be utilized immediately in cars on the road today. The Department of Energy used E20 and even E30 in their testing of E15 and found no problems. The recent Nebraska demonstration of E30 is confirming that legacy vehicles can safely and efficiently use 30 percent blends. Brazil just last month formed an exploratory committee to look at blends of 35-40 percent and keep in mind there are millions non-FFVs in use there. We need to get in the game and make sure we are not selling ethanol short by limiting ourselves to E15 which, at least in terms of RVP relief, we would be by supporting current legislation. Bills in both the House and Senate must be fixed by applying the RVP waiver to all blends.

With the refiners constantly undermining the RFS and attacking ethanol, and now API reneging on their support of E15, why are we pulling our punches? Are we afraid the petroleum industry will be less helpful? The powerful grassroots voice of the ag and ethanol industries should demand the enforcement of clean octane requirements that EPA has ignored for decades. EPA and oil insist on labeling pumps with 10 percent ethanol, corn growers should launch a national labeling campaign to warn consumers that the gas they are pumping contains up to 25 percent carcinogens right next to it.

Our internal studies at CFDC make the case that if refiners basically outsourced their octane to ethanol it would dramatically free up refining capacity and allow them to process more products out of the oil barrel while capturing the margins; a win-win for everyone. While we haven't heard much about the Trump Domestic Energy Council since they first announced it, ethanol can wrap itself in the flag and work with domestic refiners and oil interests instead of constantly battling with them.

Aviation and marine use should continue to be explored but spending a lot of time and money on them at this time when the internal combustion engine and gas-powered cars are now back in charge seems off target. So, I refer back to Johnny Lee and his warning about looking in the wrong places - instead let's seize this path of least resistance and go for truly higher blends.