Gasoline gives better return on investment than ethanol – Our Response

In a recent letter to the editor that appeared in the Green Bay Press Gazette a few statements were made that we at the Wisconsin Bio Industry Alliance would like to address.

The letter brought up ethanol’s energy return on investment based on a ratio comparison to gasoline. But, if ethanol provides lower power than gasoline, why do both IndyCar and NASCAR use it to boost horsepower?

Without losing any horsepower or speed on the track, IndyCar Series cars burned 20,000 fewer gallons of fuel using ethanol than previous seasons using methanol.”IndyCar

The transition to the biofuel reduced on-track carbon emissions and teams report an increase in horsepower.”NASCAR.com



The letter also mentions ‘subsidies:’

“If ethanol is such a good idea, then get rid of the government subsidies and mandates and let the marketplace determine whether this is a viable product.”

The truth is:

the $0.45 per gallon VEETC (known as the Blender’s Tax Credit since it was paid to oil companies and not to farmers or ethanol plants) was terminated by Congress in December 2011, along with the $0.54 per gallon tariff that protected US ethanol producers from heavily subsidized Brazilian sugarcane ethanol. You are probably aware that commencing January 1, 2012 the ethanol industry received no subsidies at all from the federal government on a per-gallon basis.” – Eric McAfee

On top of that,

“Compare the biofuels industry to the oil and gas industry, which receives more than $100 billion per year of direct cash subsidy from the US taxpayer: 1) 100% tax-free earnings using Master Limited Partnerships to own facilities and pipelines (MLP’s are illegal to use for biofuels facilities); 2) accelerated tax write-offs for well drilling (illegal for corn farmers and ethanol plants); and 3) more than $100 billion per year of military protection for shipping lanes and foreign oil fields.” - Eric McAfee

The letter mentioned the “food vs fuel” myth, too:

we are converting our food supply into gasoline when corn prices have caused food produced from corn to increase in price by 10-25 percent leading to food riots in Mexico because of the increase in the cost of corn tortillas.


USDA found that biofuels like ethanol were only responsible for .2 percent of the 4.8 percent increase in grocery bills during the first four months of 2008.” – Growth Energy



The reason behind the majority of the increase in corn prices was due to speculation and rising fuel costs.

The World Bank — who published a research paper several years ago claiming biofuels were to blame for rising food prices — reversed its position recently with a new study entitled Placing the 2006/08 Commodity Price Boom into Perspective. The study’s authors found that “the effect of biofuels on food prices has not been as large as originally thought, but that the use of commodities by financial investors (the so-called ‘financialization of commodities’) may have been partly responsible for the 2007/08 spike.” – World Bank (Page 2 of PDF)

ethanol use of corn


Ethanol is a crucial part of a sensible approach to fulfill America’s energy needs. At the very least consumers should have access to new biofuels like E15. People want choices at the pump. They want cheaper gas that’s safe for their cars and won’t pollute the air.

Simply expanding the number of locations in Wisconsin that offer E15 as a choice for consumers will create hundreds of millions of dollars in rural economic growth and in just five years could take 15 million barrels of foreign oil off our roads by displacing 300 million gallons of gasoline in our state alone.

Tell your local retailer to put in an E15 pump and share this information with your friends!

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Producers rail against changes to ethanol requirements

Many are frustrated Walker hasn’t weighed in on issue

By Rick Barrett of the Journal Sentinel
Jan. 15, 2014

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Wisconsin biofuel producers say they’re disappointed Gov. Scott Walker hasn’t joined a group of Midwestern governors urging the federal government to support ethanol use and not cut the fuel additive requirement in gasoline.

Long considered a boon to the Midwest economy, ethanol made from corn is blended in most of the gasoline sold in the U.S. today.

But for the first time since 2007, the U.S. Environmental Protection Agency has proposed cutting by 3 billion gallons, or almost 18%, the amount of ethanol in the U.S. fuel supply this year.

The reduction could have a huge adverse effect on corn growers and ethanol plants, said Robert Sather, co-founder of Ace Ethanol in Stanley and president of the Wisconsin Bio Industry Alliance.

“We have nine ethanol plants in the state. They will all be in jeopardy if the EPA change comes to fruition,” Sather said.

The proposal has raised the ire of Iowa Gov. Terry Branstad, a Republican, and governors from Illinois, Kansas, Michigan, Minnesota, Nebraska, North Dakota and South Dakota, who want the EPA to leave the biofuel requirements intact.

If the EPA’s proposed rule takes effect, the negative impact would be felt most in rural America, the governors said in a letter to EPA Administrator Gina McCarthy and Agriculture Secretary Tom Vilsack.

The governors said more than 400,000 Americans depend on renewable fuels for jobs in their states, directly or indirectly. They cited an Iowa State University study that estimated a reduction in the Renewable Fuels Standard could cause corn prices to drop below the point where farmers would make a profit on the commodity.

Corn is Wisconsin’s biggest crop, and farmers make planting decisions based in part on the demand for ethanol. So Wisconsin ethanol producers say they’re frustrated by Walker’s decision not join the other governors in urging the EPA to reject any reduction in the Renewable Fuels Standard.

Walker says he’s keeping a campaign pledge to not take a position in the debate that has pitted ethanol producers against Wisconsin’s small-engine industry, which opposes increased use of the fuel additive.

Livestock farmers also aren’t pleased with ethanol because it drives up the price of corn and makes their feed more expensive.

“From our standpoint, it’s a careful balance. We’ve got corn producers, but we also have (corn) users, particularly in the dairy industry,” Walker said in an interview.

The EPA was supposed to make its decision on the 2014 ethanol requirements last November but missed the deadline and has kept its public comment period open until Jan. 28.

“If there ever was a time the industry wanted the governor to get involved and weigh in, now is that time,” said Josh Morby, executive director of the Wisconsin Bio Industry Alliance.

(Follow Joshua on LinkedInTwitter, and make sure to follow the WBIA.)


In a speech to EPA officials in November, Iowa’s Branstad said by lowering the nation’s ethanol blending mandate, President Barack Obama’s administration would be turning its back on Iowa voters.

Iowa is the nation’s largest ethanol producer with 42 refineries.

“This is going to drive us into what could be another farm crisis. It makes no sense,” Branstad said.

Ethanol critics say the recent boom in domestic oil production has made the biofuel additive less important as an alternative to foreign oil.

Also, as vehicles become more fuel efficient, Americans are using less gasoline than they did seven years ago when the government set the Renewable Fuels Standard.

Almost all gasoline sold in the U.S. contains 10% ethanol.

“We are now at the E-10 blend wall,” the agency said, adding that if gasoline use continues to decline with more fuel-efficient vehicles, then growth in ethanol use would have to come from higher blends ranging from 15% to 85%.

That would be unpopular with the automotive industry and small-engine makers, who contend the higher blends could result in problems such as premature engine wear, fuel line issues and lower fuel mileage.

It’s time to scale back the Renewable Fuels Standard to better reflect the current situation, the American Petroleum Institute says.

“The Renewable Fuels Standard was a well-intentioned law that was written in 2007, when the assumptions of what 2014 would look like were vastly different,” said Patrick Kelly, API’s senior fuels policy adviser.

“Now the EPA has taken steps in the right direction to address this,” Kelly said.


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Find Alternative Fuel On the Go

Finding fuel for your alternative fuel vehicle while on the go just got much simpler.  The U.S. Department of Energy has created a new mobile app with easy-to-use Google technology that allows users to find the five closest locations for filling up with alternative fuels such as biodiesel, electricity, E85 (etha­nol), hydrogen, natural gas and propane.  The app provides users with driving directions, business hours and contact information.

Until more alternative fuel stations are built, allowing these important industries to flourish, this app will serve as a great resource for consumers who are dedicated to using these fuels to ensure our nation’s energy security and economic growth.

Click here for more information and to download the app.

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USDA Rural Development newsletter

USDA Rural Development recently released a new edition of their newsletter, Developments. It includes information about the Direct Home Purchase Program.  To download a copy, please click here. If you would like to request a hard copy, email Kelly.Edwards@wi.usda.gov.

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Report Shows Feasibility of Cellulosic Ethanol Operation

New North, Inc. today released Phase Two of a study on the feasibility of a cellulosic ethanol plant in Niagara.

On July 29, officials released Phase One of the study conducted by Resource Analytics, which found that sufficient biomass resources exist in the surrounding area to support a cellulosic ethanol plant.

Phase Two demonstrates substantial interest among individuals and companies to provide biomass resources – particularly wood resources – to such a facility, provided the plant could support diverse types of feedstocks.

“As second generation biofuels emerge as a fuel source, the New North is well positioned to take advantage with the resources and infrastructure necessary to create them,” said Jerry Murphy, Executive Director of the New North, Inc. “This study has demonstrated that a cellulosic ethanol facility at the former Niagara paper mill site has a great deal of promise for potential investors.”

In addition to wood resources – which provide the best option in the short-term – the study also notes the possibility of creating switchgrass supplier cooperatives in conjunction with the establishment of an ethanol plant over the coming years.

Phase II of the study is available for download at www.tinyurl.com/biomassstudy2. Phase one is also available at www.tinyurl.com/biomassstudy.

New North, Inc. is a regional collaboration effort focused on promoting regional cooperation and economic development in an 18-county region in Northeast Wisconsin. The 18 counties included in the New North are Outagamie, Winnebago, Calumet, Waupaca, Brown, Shawano, Oconto, Marinette, Door, Kewaunee, Sheboygan, Manitowoc, Fond du Lac, Green Lake, Marquette, Florence, Menominee, and Waushara. To find out more information about New North, Inc., please visit www.thenewnorth.com.

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Bio Industry Basics #9: PSC Approves Xcel Biomass Plant

Xcel Energy Corp. will move forward converting their Ashland power plant from coal to biomass after the Public Service Commission unanimously voted in favor of the project last week. Here are a few facts about the project:

• Expected to be complete in 2012, the plant will be the largest in the Midwest burning biomass.

• The project will convert a coal-fired boiler to burn wood waste.

• With two out of three boilers already burning wood, the conversion will enable the plant to run entirely on renewable sources.

“Bio Industry Basics” is a series of weekly facts from the Wisconsin Bio Industry Alliance highlighting the positive benefits of bio fuel, bio power, and bio products production and use in Wisconsin.

Bio Industry Basic 9

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Bio Industry Basics #8: Midwest States Support Ethanol and Biodiesel

The Midwest Legislative Conference of The Council of State Governments, a bipartisan association of state legislators from 11 Midwest states including Wisconsin, recently released a series of policy resolutions supporting ethanol and biodiesel. The resolutions called for:

  • Increased use of ethanol and biodiesel
  • Increased use of ethanol blender pumps
  • Sound scientific methods for calculating carbon emissions
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Bio Industry Basics #7: Honeywell to Help Design New Biodiesel Plant in WI

Flambeau River Biofuels has chosen Honeywell International Inc. to help design their proposed plant in River Falls, WI. Here are a few facts about the project:

  • Expected to be operational in 2012, the plant will use wood waste and forest residue to produce biodiesel.
  • Once completed, the plant is expected to produce 18 million gallons of biodiesel per year.
  • The plant will be the largest second-generation biodiesel plant in the U.S.
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Bio Industry Basics #6: Biodiesel Has Positive Energy Balance

A new study from the University of Idaho and the US Department of Agriculture has found that biodiesel produces 4.5 units of energy for every one unit needed to create the fuel. Here are a few key facts:

  • Farmers are using less fuel to grow soybeans because of technology advances that allow them to minimize cultivation of the soil.
  • Biodiesel plants production technology is more energy-efficient than ever before.
  • At 4.5 to 1, the energy balance of biodiesel is more than five times better than the energy balance of traditional diesel.
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Bio Industry Basics #5: Majority of Wisconsinites Support Biofuels

A recent study from University of Wisconsin-Madison researchers shows that approximately two-thirds of Wisconsinites support biofuels. Here are highlights from the study:

  • About 70 percent of Wisconsinites support biofuel production.
  • 60 percent of respondents would like to see higher investment in biofuel technology.
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