WBIA BLOG

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

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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.

Well…

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

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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)

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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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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.

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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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Bio Industry Basics #4: Higher Ethanol Blends Increase Engine Efficiency

A recent University of Nebraska study has shown that higher ethanol blends can increase engine efficiency. Here are a few facts:

  • The study found that higher ethanol blends produce better energy conversion than other fuels, which means vehicles can travel farther using less energy.
  • E85, a blend of 85 percent ethanol and 10 percent gasoline, improved energy conversion by as much as 14 percent compared to E10.
  • When considering fuel economy, a combination of fuel efficiency and price, researchers said E85 was the best choice every time in their study.

To view the complete study, please visit http://http://tinyurl.com/ethanolstudy

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Bio Industry Basics #3: Ford Unveils New Biofuel Compatible Trucks

Ford recently unveiled its new line of F-Series “Super Duty” trucks with engines compatible with biodiesel blends and E85. Here are a few facts:

  • The new 6.7L V8 diesel engine will be able to use biodiesel blends up to B20, a mix of 20 percent biodiesel and 80 percent regular diesel.
  • The new 6.2L V8 gasoline engine can run on ethanol blends up to E85, a mix of 85 percent ethanol and 15 percent gasoline.
  • Both engines offer significantly improved torque, horsepower and fuel economy.

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Bio Industry Basics #2: Ethanol Co-product Can Help Feed the World

Researchers at South Dakota State University have begun turning dried distillers grains, a co-product of ethanol production, into a protein- and fiber-rich flour. Here are a few facts:

  • The researchers have successfully replaced up to 20 percent of flour in bread products with distillers grain flour, significantly increasing the protein and fiber content of the products.
  • The distillers grain flour can provide extra protein for people in developing countries where meat is scarce.
  • That means ethanol plants are able to provide food AND fuel for people around the world.

“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.

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Bio Industry Basics #1: Proposed Biomass Plant Better for Environment and Economy

We Energies has proposed building a new biomass power plant in Rothschild, WI as a clean alternative to coal.  Burning low-quality and unusable wood and paper waste from the nearby Domtar paper mill, the plant would provide a boost to Wisconsin’s economy and its environment.  Here are a few facts:

  • Burning wood waste is nearly carbon neutral because the carbon dioxide generated is about equal to the amount a tree consumes during its life, according to the U.S. Forest Service.
  • The $250 million facility would create 150 permanent jobs and 400 temporary jobs during construction, and help make the Domtar mill more efficient.

“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.

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