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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Auto Industry Relying on Incomplete Research in Fight Against E15

In the debate over raising the ethanol blend wall, the auto industry has come out against E15 (a blend of 15 percent ethanol and 85 percent gasoline), citing research that claims higher blends will damage car engines.  This study, however, is incomplete and cannot be regarded as fact.

The report, published by the Coordinating Research Council (CRC), was due to test 16 engines manufactured between 2001 and 2009, but has only conducted testing on half thus far.  In fact, testing has only been completed for four engines.

It is troublesome that the auto industry is drawing conclusions from a study that is nowhere near finished when other third party research, and even the EPA, has suggested that E15 is safe for recent engine models.

CEO of Growth Energy, Tom Buis, said, “The EPA has told us in writing that they intend to complete their testing on E15 before making a decision, and we are confident they will.”

Why hasn’t the auto industry done the same?

Buis added, “We are also confident that the testing will show what we already know: that E15 can run just fine in today’s modern engines, all while creating good paying jobs here in America.”

For more details about the situation, check out this story at BrighterEnergy.org.

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No Wars Have Ever Been Fought Over Ethanol

Growth Energy launched their $2.5 million television ad campaign today, promoting ethanol’s many benefits as an alternative to fossil fuels.  The spots will air on four cable networks over the next six months: Fox, MSNBC, CNN and HLN. They began airing today at 6 a.m on all four networks.  Each spot focuses on a different benefit of ethanol and promotes it as independent, clean, renewable, peaceful, sensible and economic.

Here is one example, called “America’s Peace Fuel”

To see all of the ads on Growth Energy’s Web site, click here.

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