GM is spending about $100 million a year adding flex-fuel capability to our vehicles. We can’t afford to leave this capital stranded… I think it would be very helpful if we could get government assistance. But I really want the oil industry, I want the people who are at this conference, I want the government and I want us to just work together to make ethanol a reality,

This was the message the GM’s Tom Stephens took to the Renewable Fuels Association’s National Ethanol Conference in Orlando. And though Stephens’ exhortation of the ethanol industry makes for a pleasant addition to GM’s typical ethanol message (i.e. the first sentence of the quote), it’s little more than filler. GM’s push to align itself with the ethanol industry continues unabated, as Stephens reveals that half of all GM vehicles will be flex-fuel capable by 2012. The problem is that GM reckons the country needs another 10k E85 pumps (up from the current 2k), and since the ethanol industry would effectively collapse without government support, nobody from the industry is jumping in to take responsibility for this self-serving infrastructure project.

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First President Obama said the Senate may forego passing cap-and-trade, by far the most critical piece of the energy legislation that’s brewing on Capitol Hill. And now, the Environmental Protection Agency is suddenly pushing snake-oil, uh, corn-based ethanol in the latest iteration of the renewable fuel standard [proposed rule PDF], claiming that its substitution for gasoline will reduce greenhouse gas emissions. This contradicts an earlier renewable fuel standard iteration, and most studies of the matter, including a 2008 study in Science, which found that “corn-based ethanol, instead of producing a 20% savings [as per typical life-cycle studies], nearly doubles greenhouse emissions over 30 years and increases greenhouse gases for 167 years.” [Ed: for more on the corn ethanol sham check out TTAC's E85BOTD archives]

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Well, the good news is that the EPA has thus far refused to allow gasoline blends of more than ten percent ethanol. The bad news is that the Agency has yet to take a firm stand against the idea of eventually allowing E15 into the nation’s gas pumps. In fact, as the EPA’s response to the ethanol lobbying group Growth Energy’s request to allow E15 [full document in PDF form here] opens:

It is vitally important that the country increase the use of renewable fuels. To meet that goal EPA is working to implement the long-term renewable fuels mandate of 36 billion gallons by 2022. To achieve the renewable fuel requirements in future years, it is clear that ethanol will need to be blended into gasoline at levels greater than the current limit of 10 percent.

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The EPA is set to rule as soon as tomorrow on the so-called “blend cap,” which forbids the sale of gasoline with more than ten percent ethanol. The petition to raise the blend cap came from a relatively new pro-ethanol lobbying group, Growth Energy, which requested the cap be moved to fifteen percent ethanol. Growth Energy’s request cites foreign oil dependence, “green-collar jobs” and the future of cellulosic ethanol as reasons to bump the blend cap, but as the New York Times reports, the real problem is that the ten percent limit is bumping up against a congressional mandate to blend 15b gallons of biofuels with gasoline by 2012. What the Times fails to mention is the financial incentive for raising the blend cap: the 51 cent-per-gallon of ethanol blended tax credit. In 2007, when gas consumption was at an all-time high and ethanol blending mandates required a mere 4.7b gallons (with 7b actually blended), that credit cost taxpayers nearly $3b. In 2012, when the mandate hits 15b gallons, the taxpayer tab will be closer to $7.65b.
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Let us begin with the money shot, courtesy BiofuelsDigest. “If it were up to me, I would put every cent into electric cars.” That would be the US Secretary of Energy, Dr. Steven Ch, at a  meeting on alternative fuels, according to “a source present at the meeting.” As a part of an administration whose election campaign received cash and free jet travel from ethanol producer Archer Daniel Midlands—not to mention political support from farming states for whom the term “pork barrel” seems to have been invented—Chu’s remarks were, shall we say, politically inadvisable. And so the DOE’s Director of Public Affairs swung into damage control mode: ”I can’t verify the quote you are using from an undisclosed source at an undisclosed meeting, which is at best wildly out of context,” Dan Leistikow backpedals. “Secretary Chu talks about the potential of biofuels in nearly every public speech, as well as on Facebook and Youtube.” Thanks for the YouTube link Danny. Meanwhile, the only Facebook page I can find is “The fans of Steven Chu,” which celebrates “the erudite hotness of Nobel Laureate/eco-warrior Steven Chu.” Strangely, there’s no mention of the torrid subject of bio-fuels to be found.

Our friendly neighbors to the north are starting to cope with a difficult and embarrassing reality. Canada.com reports on a briefing note prepared for Canadian Natural Resources Minister Lisa Raitt warning that hundreds of millions of dollars spent subsidizing e85 Flex Fuel technology have been a colossal failure. Not the least of which is the fact that a complete lack of convenient fueling infrastructure has resulted in people using “dirty” gasoline. According to the memo, obtained under public information laws:

Given that E85 (fuel) is not sold in significant quantities, these credits (to manufacturers) are not tied to actual GHG emission reductions because Canada’s FFVs are fuelled almost exclusively with gasoline

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The EPA’s goal of encouraging production of 100m gallons per year (gpy) of cellulosic (i.e. non-corn-based) took a bit of a hit recently, when it was found that the firm responsible for producing 70m gpy was actually showing investors petroleum-based fuels and lying about its production capacity. Whoops! But instead of drawing the conclusion that ethanol is the modern equivalent of snake oil, attracting hucksters and scams like mainstream car blogs to a special-edition Mustang, the government is keeping the sector well-stocked with taxpayer cash. Green Car Congress reports that the Department of Energy has awarded ethanol firm POET a $6.85m increase over its already-delivered $76m grant, with another $13.15m on the way. The funds were awarded through Project LIBERTY (Launch of an Integrated Bio-refinery with Eco-sustainable and Renewable Technologies in Y2009), which seeks to move ethanol past the tortilla riot-era bad press while keeping it chained to big agribusiness. The method? Ethanol from corn cobs!

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More than a year ago, the ethanol industry hit the “blend wall”: the difference between what they could produce and what the market wanted to use. This despite billions in tax credits: direct and indirect federal and state subsidies. All enabled by a federal mandate mandating that the ethanol boys brew nine billion gallons of renewable fuels in 2008, rising to 36 billion by 2022. And then the gas price bubble burst and environmental impact studies arrived, revealing corn-for-fuel as a carbon positive endeavor. The ethanol industry pretty much curled-up into the fetal position. The small players went belly-up. The big boys—including Archer Daniel Midlands (whose corporate jet ferried candidate Obama around the Midwest)—put their hopes into E20.

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Move over corn. There’s a new sheriff in Ethanol City and his name is Watermelon. Every year, famers leave about 800 million pounds of watermelons to rot; the fabled orbs simply weren’t perfect enough for persnickety melon buyers. According to Automotive Fleet, USDA scientists in Lane, Oklahoma are converting melon juice from the abandoned fruit into ethanol. Researchers have determined that a 20-pound watermelon can yield about 1.4 pounds of sugar, which can be converted into ethanol more easily than corn. Allegedly. Common Sense Agriculture, a small biofuels company in College Station, Texas, is developing an in-field, watermelon-to-ethanol conversion machine for next season. They don’t say how much ethanol the equipment will have to produce to offset the fuel used to get to the melons, make the conversion and transport the liquid back to base. Here’s hoping this doesn’t lead to any watermelon riots, as Fourth of July and Labor Day picnickers protest a shortage of their fruit of choice.

The E85 industry has a problem. Well, a bunch of problems: corn prices, water supplies, environmental impact, flagging political support for subsidies, limited access to the marketplace and profitability. Yes, there is that. Or, more precisely, there isn’t that. If only the feds could find a way to force the country to use the corn juice . . . I’ll see your mandatory E10 and raise however hell as much as I can get away with. The thing of it is: when there’s a choice, people aren’t buying E85. What’s left of the ethanol industry post-gas price drop has convinced itself that it suffers from a near-lethal perception gap. (Remember: no one ever died defending a corn field.) As we recently reported, the Department of Energy is spending $2 million of federal funds to help you discover that E85 isn’t really cheaper when you factor-in the mpg drop. Anyway, Evolution Fuels has announced that it wants some of that taxpayer loot.

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