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Declare your independence from oil with Fuels 101

Fuel Freedom has something new this Fourth of July to help Americans declare their independence from oil and its monopoly on the U.S. transportation fuels market.

This week we launched Fuels 101, a set of tools you can use to learn about alternative fuels. The pages include:

  • Check Your Car. An interactive feature that allows you to determine whether your car, truck or SUV is a flex-fuel vehicle, and thus can run on any combination of gasoline and ethanol, up to E85 (85 percent ethanol, 15 percent gasoline).
  • Fuel Types. A guide to the different transportation fuels, including ethanol and methanol. All facts, no myths.
  • Find a Fueling Station. We’re using the Alternative Fuels Data Center’s cool interactive map, which helps you find not only E85 stations, but CNG and others.

Consider Fuels 101 an introductory course in all the alternatives to fuel. Although they come from different sources (ethanol, for instance, can be made from a variety of starchy plants, not just corn) and are made in different ways, their commonality is that they burn cleaner than petroleum-based fuels, reducing toxic pollutants that befoul our air and water. Domestically produced fuels also create American jobs and strengthen our national security.

Give Fuels 101 a spin. Don’t worry, none of it will be on the final.

Fuels 101 is the kickstart to what we’re calling Fuel Freedom Month. Our goal is to raise awareness coast to coast about ways we can all help create a genuinely competitive fuels market for the first time in America.

To learn more about how you can help, visit our Take Action page. And while you’ve got some down time between barbecues and fireworks displays this weekend, watch our all-American documentary film, PUMP the Movie, starring Jason Bateman.

You can also get regular updates on social media by following Fuel Freedom’s Facebook page and Twitter feed. PUMP has cool content as well (it has an independent streak of its own), so check it out on Facebook and Twitter as well.

Happy Independence Day, America!

Related posts:

Time to declare independence from expensive oil
Fuel Freedom to Hannity: ‘We can bankrupt terrorism’

pigs-car

Pig power: A messy problem becomes a fuel solution

You can thank Hernando de Soto for bacon and pork chops.

The Spanish explorer gets credit for introducing the pig to America, having brought 13 of them to Tampa Bay, Florida, in 1539. By the time of de Soto’s death, three years later, that passel of piggies had grown to more than 700. Yes, pigs grow quickly. They also poop, 24 hours a day, in great quantities.

That manure can be transformed into fuel for vehicles. So even though we’ve let all that pig poop — and cow poop, for that matter — go to waste all these centuries, more of it is being processed to extract methane, the principal component of natural gas.

All over the country, this renewable form of methane is being collected and fed into the nation’s natural-gas pipelines, and then transported to fueling stations to be used as compressed natural gas (CNG) and liquefied natural gas (LNG). The fuel is not only much cheaper than petroleum-based vehicle fuels, it burns cleaner: It contains about 23 percent less in greenhouse-gas emissions than diesel and 30 percent less than gasoline. Capturing all that methane instead of letting it float away from farms is also important, since the gas is more than 20 times worse for the environment than carbon dioxide.

There are some 191 renewable-methane projects on farms in the United States, according to the American Biogas Council (the EPA’s AgSTAR Stories project has profiles on many of them). These farms use anaerobic digesters, which involve storing the manure in tanks or ponds. The fecal matter, as well as food scraps and other farm waste, is broken down into smaller molecules, and the material usually is covered, to help elevate the temperature inside. That allows anaerobic bacteria (which don’t take in oxygen) to go to work on them. Methane is made as a result, and machines vacuum off the gas, cleanse it of impurities (like CO2) and ship it off to be used as fuel.

pigs-Memphis2

A Clean Energy renewable-methane plant outside of Memphis.

Clean Energy Fuels of Newport Beach, California, has invested heavily in what it calls Redeem, its proprietary biogas made from organic waste. Twelve of its contracted projects in North America are at landfills — discarded food produces large amounts of methane, as does cellulosic trash like cardboard and paper — and three other projects are agricultural.

“There’s a tremendous energy potential in waste, and this is one of the more efficient and cost-effective ways of capturing that,” says Harrison Clay, president of the company’s subsidiary, Clean Energy Renewable Fuels. “I think there’ll be more and more opportunity at these large, concentrated agricultural operations to take their waste and turn it into an energy project, from a problem to a solution.”

Methane accumulates in large landfills, and many are legally required to flare it once it starts to seep out. Clean Energy’s equipment captures it instead. “So it’s a tremendous GHG emission benefit,” Clay said, “because you’re capturing all this methane that otherwise would go into the atmosphere, and you’re turning it into fuel and displacing oil.”

Ingenious ideas for turning waste into fuel are coming from all quarters: In England, a passenger bus called the Bio-Bus runs on human waste, as well as inedible food waste, culled from a sewage treatment plant.

Livestock is uniquely suited to be a renewable fuel source, because cows and pigs are prolific producers of manure. According to the USDA, dairy cows account for about 80 pounds per day (per 1,000 pounds of animal weight). The equivalent in hogs accounts for 63.1 pounds per day.

At Circle Four Farms near Milford, Utah (about halfway between Salt Lake City and Las Vegas), a million and a half hogs are raised and taken to market each year. It’s the largest pig farm in the western United States, and every day those hogs produce a million gallons of manure.

Three years ago, a Provo firm called Alpental Energy Partners, which finances alternative-energy projects, noticed the potential of the massive farm. (How could one not notice? The odor from the facility can be smelled for miles.) Alpental built anaerobic digesters that turn all that poop into electricity that powers more than 3,000 homes in a town hundreds of miles away.  (Here’s a great local TV report on the project.)

Such a project could easily provide the same benefits, but for drivers of cars, trucks and SUVs that run on natural gas, which also happens to be a “feedstock” for alcohol fuels that can run in flex-fuel vehicles.

Paul Stephan, managing partner at Alpental, said various incentives, including carbon credits and investment tax credits, which enhanced the revenue stream from the pig project. But those were complicated to secure. “If we didn’t have one of those [revenue] attributes, it would probably be more profitable for us to sell it as transportation fuel,” he said. “I think if I was going to go look at doing another project in the United States off of pig manure and methane, I’d probably sell it as transportation fuel.”

Let’s not miss an opportunity and miss an opportunity – The decision between E85 and gasoline

both_ways2Over the last month or two, the debate over the merits of environmental benefits (including a reduction in greenhouse gas emissions) of E85 has become relatively intense, by media standards.

Perhaps the EPA’s proposal to modify the Renewable Fuel Standard led advocates on both sides of the dialogue to intellectually and emotionally wrestle with each other. Perhaps the apparent, albeit modest, growth of E85 stations and sales in the nation brought the supporters of E85 – corn growers, some environmentalists, and the detractors (primarily the oil industry and, again, some environmentalists) – out of the proverbial closet. Perhaps recent studies concerning the impact of E85 on GHG emissions – studies that, for the most part, suggest that using E85, when compared to gasoline or on its own, is a net plus in terms of reducing GHG emissions and several other pollutants – provided fodder for both proponents and opponents to take off the gloves.

Here’s what we know, or what we think we know: On balance, most government agencies that have been assigned to, or have assumed, the responsibility for measuring the overall impact of E85 on GHG emissions and pollutants, in addition to many independent think tanks (including universities), grant E85 positive marks, either on its own or as a fuel or when compared to gasoline. But the conclusions, to some doubters, are not conclusive. Ideologues or special interests aside, a handful of independent analysts working for reputable groups challenge the high marks granted to E85. The repartee is, at most times, more gentle and academically correct than that between intense E85 advocates and detractors. But the differences of views, while suggesting a clear tilt toward increasing the use of E85, should be discussed and responded to if consumers are to be easily convinced to make the switch from gasoline.

Let’s begin with the Argonne National Laboratory, a highly respected national research lab. It indicated late last year that its GREET (Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation) Model estimated that the life cycle of GHG emissions from E10 (regular gasoline) was 439 grams per mile, and from corn-based E85, 341 grams per mile. Quite a difference! At relatively the same time, the Department of Energy indicated: “As with conventional fuels, the use and storage of ethanol blends can result in emissions of regulated pollutants, toxic chemicals, and greenhouse gases. However, when compared to gasoline, the use of high-level ethanol blends, such as E85, generally result in lower emissions levels. … Using ethanol as a vehicle fuel has measurable GHG emissions benefits compared with using gasoline. Carbon dioxide released when ethanol is used in vehicles is offset by the CO2 captured when crops used to make the ethanol are grown. As a result, FFVs [flex-fuel vehicles] running on ethanol produce less net CO2 than conventional vehicles per mile traveled.”

That’s a pretty strong statement!

The Congressional Budget Office’s recent estimates are a bit less enthusiastic. They are hedged with the institution’s usual and understandable caution, given its primary role in estimating alternate budgetary impacts of alternative policies. CBO’s June 2014 report on the RFS states: “Available evidence suggests that using corn ethanol in place of gasoline has only limited potential to reduce greenhouse gas emissions (and some researchers estimate that it could actually increase emissions).” A NASA sensor used by the Goddard Space Flight Center to test air quality above one ethanol refinery led to an obviously tentative and preliminary conclusion that ethanol refineries in the nation “could be releasing much larger amounts of ozone-forming compounds into the atmosphere than current assessments suggest.”

So what’s a guy to do (“guy” being a euphemism for both men and women)? First, understand that the enemy of the good is, indeed, often the perfect. Two, borrow and slightly amend Ambassador Abba Eban’s comments concerning securing peace in the Middle East: Let’s never miss an opportunity and subsequently miss an opportunity. After reviewing the non-advocacy literature, it seems clear that E85 has become a reasonable alternative to gasoline at the present time. It is not perfect. But it is perfectible to be sure and, indeed, it is being perfected both in the laboratory and from the production process through distribution to use in automobiles. Clearly, with respect to tailpipe emissions, E85 is now much better than gasoline.

Further, solid studies, like those from the Argonne National Laboratory, show that ethanol’s life cycle emission benefits are improving and are superior to gasoline. In this context, farmers are learning to better manage and increase efficiency in the growing of corn, thus reducing emissions related to land use. Several states, led by Colorado, now impose regulations that cut methane leakage in the supply chain. Alternative feedstocks (e.g., corn stover, cellulosic, natural gas, etc.) are on the horizon and offer the promise of an E85 that will be cheaper and result in significantly less emissions. Consumers will likely soon have choices among E85 feedstocks. This is good for the country. It will take place while electric and hydrogen vehicles improve their readiness for prime time and reach out to a larger share of the American market.

So visit your local, accessible, less-expensive, generally nice E85 fuel station and get rid of your addiction to oil and gasoline. Try E85! You will like it! While your humanity is being redeemed, urge key research agencies and think tanks to get together and work out their differences, something like the Manhattan Project. Agreeing on the value of alternative fuels in reducing emissions could well be as important in light of the specter of global warming and the increase of pollution as the invention of the atomic bomb.

ethanol

Ethanol debate heats up

Anyone who thought that the EPA’s publication of its proposed Renewable Fuel Standard for 2014, 2015 and 2016 was going to settle the ethanol debate has definitely got another thing coming.

The EPA ruling has simply made the situation more contentious and complex. In fact, nobody really knows where ethanol is headed now.

Consider the following developments:

  • The industry hit an all-time high first week in June, producing 992,000 barrels per day, equal to the old record of Dec. 19, 2014, and 100,000 barrels more than the first week in May. This despite the argument from the industry that the EPA measure is crippling the industry.
  • Gasoline consumption rose 3 percent over the first quarter, the fastest increase in a decade. Gasoline costs $1 less a gallon than it did a year ago, and motorists are responding by driving more. The more gasoline consumed, the more ethanol will be consumed, since it makes up 10 percent of each gallon.
  • While the EPA may have underestimated the amount of ethanol that will be consumed in a year, the agency has definitely overestimated the amount of “advanced” ethanol the industry can produce. This is supposed to be an incentive for the development of cellulosic ethanol, but cellulosic plants are having a hard time getting off the ground. It’s not at all certain that cellulosic ethanol will ever be available in commercial quantities.
  • Through a quirk in the law, the EPA counts sugar-based ethanol as an “advanced technology” in opposition to corn-based ethanol. Therefore, refineries are allowed to count sugar-based ethanol toward their EPA “advanced” quota. The result has been a boon to Brazil, which saw its exports of sugar-based ethanol triple over the past few months. There is very little sugar-based ethanol produced in this country. The price of Renewable Identification Notices (RINs), whereby refiners show they have added “advanced” ethanol to their gasoline, rose to its highest level in two years since the EPA announcement. Meanwhile, the price of RINs for corn-based ethanol has fallen by 50 percent over the same period.

And so it goes, round and round. All this has left commentators scratching their heads as to where the industry is headed. On OilPrice.com, Colin Chilcoat wrote a column asking, “Has U.S. Ethanol Production Topped Out?” Accompanying it was a graph showing that ethanol production has leveled off at 9.8 percent of every gallon over the last three years:

ethanol graphThis puts consumption just below the 10 percent “blend wall,” at which ethanol supposedly starts to harm engines. But that’s not the whole story. As Chilcoat writes: “Buoyed by high exports – up 33 percent from 2013 – ethanol production totaled more than 14.3 billion gallons in 2014.” American ethanol is starting to find markets abroad, even as we import more from Brazil.

Then there’s the question of whether that “blend wall” really exists. There’s no question that ethanol corrodes steel. That’s the reason it can’t be shipped in pipelines – which makes it very expensive to get it from farm country to the East and West coasts. But steel has been replaced by rubber in fuel-injection systems, and the danger no longer exists for cars built after 2001. Then there are the flex-fuel vehicles, of which there are some 17 million on the road today. They can handle any liquid fuel. Finally, an older car can be modified by replacing the steel parts in the fuel system through a simple procedure that costs less than $200. E85, a mixture of 85 percent ethanol and 15 percent gasoline, is being sold all over the Midwest, where support for ethanol is strong. And the Obama administration’s Department of Agriculture has just appropriated $100 million for gas stations that can dispense all varieties of ethanol.

“Unfortunately, the EPA continues to cling to the ‘blend wall’ methodology that falsely claims ethanol has reached its saturation point at a 10 percent ethanol blend,” Bob Dinneen, president the Renewable Fuels Association, complained. “The Agency has eviscerated the program’s ability to incentivize investments in infrastructure that would break through the blend wall and encourage the commercialization of new technologies.”

Perhaps the biggest shift has come from environmental groups, who were once ethanol’s biggest supporters but who have done a 180-degree turn and are now among its biggest opponents. The Environmental Working Group recently published a paper claiming that corn ethanol actually produces a 20 percent increase in carbon emissions and is a contributor to global warming. EWG estimates that the production of E10 in 2014 resulted in 27 million tons more carbon emissions than if American drivers had been burning ethanol-free gasoline (E0). A study by the World Resources Institute purports to show that where carbon emissions are concerned, ethanol does more harm than good. Friends of the Earth, once a supporter, is now one of ethanol’s most vocal detractors.

Yet the public seems to be still behind the ethanol effort. A poll conducted by RFA found that 62 percent of the public favors corn-based ethanol, while only 18 percent were opposed. The number rose to 69 percent when people were asked if manufacturers should be required to offer flex-fuel vehicles.

So the EPA is limiting the production of corn ethanol, which is plentiful, while providing broad leeway to cellulosic ethanol, which doesn’t yet exist at scale. To top things off, Sen. John Cassidy of Louisiana introduced a bill to do away with the Renewable Fuel Standard altogether, making all gas E0 again. Senators Diane Feinstein of California and Pat Toomey of Pennsylvania already have a similar bill in the hopper.

The last act of the ethanol story has definitely not been written yet.

truck

Natural gas touted as the next alternative fuel in San Diego

“I’m not proud of it, but I’m a reformed diesel guy,” said Andrew Douglas, senior VP of sales and marketing at Agility Fuel Systems of Santa Ana, California.

Douglas was among the dozens of attendees at the L-NGV2015 conference in San Diego last week, a gathering mostly aimed at the compressed natural gas (CNG) and liquefied natural gas (LNG) industry. Agility retrofits tractor-trailers to run on CNG, and has produced 25,000 such vehicles since it was founded in 1996.

cylinder_stackMore and more companies are converting to CNG: In the early years the customers were mostly city transit buses and garbage trucks, but the shipping sector is taking advantage of systems that can stash more fuel on board and propel the big trucks longer distances. On the company’s new Saddle Creek Gen 5 model, four cylinders of CNG totaling 160-gallon diesel equivalent are stacked up behind the driver’s cab. The setup weighs more than 3,000 pounds, but it can travel 750 to 850 miles without refueling.

But the industry has challenges: Douglas said the goal is to get 10 percent of the nation’s heavy-duty trucks running on natural gas by 2020. The cost of such vehicles is steep, although Agility says companies can make that money back within 2 years.

“Eighty years ago there was a transition to an alternative fuel going — diesel,” he told a conference room of about 40 people. The industry is seeing a migration to a “new alternative fuel,” natural gas. Just as decades ago, price is the motivator.

Diesel is averaging about $2.86 a gallon, compared with $2.11 for CNG.

“I think we’re seeing an evolution to a cheaper fuel source, in this case, natural gas,” he said.

Later, showing off one of Agility’s behind-the-cab systems on a Frito-Lay truck in a cavernous room of the San Diego Convention Center, Douglas talked about being a trucking guy at heart, trying to convince trucking companies to switch away from a fuel that has been synonymous with big trucks for decades.

“Sometimes you have moments of doubt. And whenever I go there, I think to myself, No matter what the obstacles are, it’s about the price of fuel — or the differential (between NG and diesel). That’s what’s going to drive this.”

CNG truck22Fuel Freedom Foundation co-founder and chairman Yossie Hollander presented on the same panel as Douglas and Greg Roche from Applied LNG of Westlake Village, California. Hollander praised CNG and LNG, saying it’s going to be a “sustainable business for a long time.” But he reminded the panelists that the market for light-duty vehicles is 3.5 times bigger than the market for larger vehicles. “That’s the larger market here.”

One solution is to make liquid alcohol fuels, like ethanol and methanol, out of natural gas. Those fuels can run in many of the vehicles Americans drive already, without the need to buy a new vehicle or undertake an expensive conversion.

Fuel Freedom seeks to open the fuels market so all fuels, including CNG, LNG and alcohol fuels, are available to the consumer, not just gasoline. “We don’t have favorites,” Hollander said. “What we want is a supermarket.”

What do family ties have to do with E85?

Andrews2Going through scrapbooks last night brought back memories concerning my uncle, Billy Swanson (his performing name, given name William Sneirson). He was one of my favorites. He led a band during the late thirties and early forties that for a short time worked with a group called the Andrews Sisters.

Somewhere in my family archives, I have been told that we have cancelled checks for $100 for each of the three sisters. Pretty pricey in those days. My uncle and the Andrews Sisters played at the Hotel Edison in New York City. Soon after my uncle and the Andrews Sisters parted ways, the sisters recorded a song called “Bei Mir Bist Du Schoen,” written by Sammy Cahn and others. As many in the AARP know, the record sold millions and was recorded subsequently by many many singers. It is now almost an American music icon.

I couldn’t get the music out of my mind and have hummed it all day long while thinking about my day job trying to convince Americans to wean themselves off of gasoline on to alternative fuels. As President Obama has said, moving on to alternative fuels (like E85) would be good for the environment, the economy, reduce GHG emissions, and lower costs to consumers. Thinking and humming … I tried a rewrite of the lyrics to “Bei Mir Bist Du Schoen (translated from the Yiddish, the title means “To Me You’re Beautiful” … here are the lyrics.) Sorry, Sammy … sorry Patty, Laverne and Maxine. Please forgive, and I hope that you understand. Paraphrasing a former Secretary of Defense, what’s good for “Bei Mir Bist Du Schoen” is good for America. … Bring it on, Johnny Mathis.

(Please, if you remember, sing to the tune of “Bei Mir Bist Du Schoen”)

Of all the gas stations, I’ve known and I’ve known some
Until I first met you I was lonesome
And when you came in sight, dear, my heart and mind grew light
And this old world seemed new to me

You’re really swell, I have to admit you
Deserve expressions that really fit you
And so I’ve racked my brain hoping to explain
All the things that you do for flex-fuel vehicles and me and you

Bei mir bist du schön, please let me explain
‘Bei mir bist du schön’ means you’re grand
Bei mir bist du schön, again I’ll explain
It means you’re the fairest gas station in the land

I could say ‘bella, bella’ even ‘sehr wunderbar’
Each language only helps me tell you how grand you are
I’ve tried to explain, ‘bei mir bist du schön’
Please continue doing what you’re doing for America and say you understand

Bei mir bist du schön
You’ve heard it all before but let me try to explain
‘Bei mir bist du schön’ means that selling E 85 is grand
‘Bei mir bist du schön,’ it’s such an old refrain
And I again should explain, it means you r doing good for our air and land.

I could say ‘bella, bella’ even ‘sehr wunderbar’
Each language only helps me tell you how grand you are
I’ve tried to explain ‘bei mir bist du schn’
And I should  conclude by saying  thanks for lower fuel prices and say that you l understand!

The calls are already coming in. Maybe I will do it for Motown!

 

L-NGV conf banner

Natural gas center of attention at L-NGV2015

We’re headed to the L-NGV2015 conference in San Diego, where natural gas will be in the spotlight.

Natural gas has been getting a lot of attention lately, because the United States is producing so much of it. As Jude Clemente wrote in Forbes earlier this month:

U.S. proven natural gas reserves continue to soar to record highs. We now have some 360 Tcf [trillion cubic feet] of proven gas in the ground, recoverable under current market conditions, experiencing increases of 5-8% per year. Driven by the Marcellus shale play in the Appalachian Basin, Pennsylvania and West Virginia have registered the largest gains, with both state reserve totals more than quadrupling since 2010. In fact, Pennsylvania and West Virginia have accounted for about 60% of new U.S. gas reserves since 2008, although mighty Texas continues to plug along, upping its reserves by 20% since then.

The surge has occurred despite a steady decline in prices. Henry Hub spot prices are about $2.80 per million British Thermal Units, down from an average of $8.86 per MMBtu in 2008, as Clemente notes.

NG is running about 70 percent lower in price than the equivalent amount of oil, even with oil’s precipitous drop from last summer. That’s what makes natural gas an attractive alternative for transportation fuel.

Much of the discussion at L-NGV2015 will center on compressed natural gas (CNG) and liquefied natural gas (LNG), which is being used in municipal fleets (official vehicles and transit buses) and industrial trucking (delivery, garbage-hauling) around the country. These fuels not only cost less than gasoline and diesel, they burn much cleaner, which is better for air quality and the environment.

Natural gas can also be converted into alcohol fuels to run in the cars, trucks and SUVs driven by the rest of us.

NG is “very, very cheap, and we need to take advantage of that,” Fuel Freedom co-founder and chairman Yossie Hollander said recently during a discussion about energy in Israel. “The greatest opportunity is a transportation one. Using a natural-gas product, whether compressed natural gas, liquid natural gas, ethanol from natural gas – you can make ethanol from natural gas, and another fuel called methanol – if we use all of them in transportation to replace oil, this will replace a $3 trillion industry around the world.”

We’ll be presenting more about this topic at L-NGV2015. Check out our Twitter feed (@fuelfreedomnow) for regular updates.

deleon

Lawmaker discusses far-reaching California climate bill

Sen. Kevin de Leon, president pro tem of the California state Senate, is not only confident a climate-change bill will pass the Legislature and be signed into law. He fully expects the rest of the nation to follow California’s lead.

“Leadership does matter. That’s why we will not wait,” de Leon said last week during an energy discussion in Sacramento.

The lawmaker went on:

“We have never waited for Washington, D.C. To be honest with you, while Washington, D.C., dithers on this issue, between members who are negative, climate-change deniers altogether when the empirical data is there … We’re not waiting for that. We’re not gonna wait for Washington, D.C. We never have; we never will. We are the state of California, and we are the leaders nationally. And they’re gonna have to follow, and they will eventually follow what is done here.”

Senate Bill 350 passed the Senate on June 3 and now goes to the Assembly. If it’s approved there and signed by Gov. Jerry Brown, the state will have achieved an ambitious plan that could have a huge impact on transportation and power generation in the state, and could affect the state’s economy long into the future.

The bill sets three goals to be achieved by 2030: cut petroleum use by 50 percent; increase the amount of renewables in electricity generation by 50 percent; and boost efficiency of buildings by 50 percent.

To discuss the measure, the group Diesel Technology Forum sponsored a gathering called “50/50/50 by 2030: Transportation and the California Energy Challenge. Carl Cannon, the Washington bureau chief of the website Real Clear Politics, moderated the event and interviewed de Leon.

De Leon said that if SB350 passes, it will save consumers money from “better fuel efficiencies” as well as reduce smog. “Air pollution knows no boundaries of political ideologies,” he said. The Democrat called the network of freeways in his Los Angeles district a “serpent that chokes the air out of a young child’s lungs.”

The bill was among several related to climate change passed by the Democrat-controlled Legislature. “These measures together represent the most far-reaching measures dealing with climate change, not in the history of California or the history of the country, but I would go a step further and say in the history but the world.”

De Leon said he’s looking forward to a “vigorous debate on the merits of the measure itself. … I think it’s going to be fun.” Democrats easily outnumber Republicans in both houses of the Legislature (26 out of 40 in the Senate; 52 out of 80 in the Assembly), but de Leon said that some Republicans had said to him privately that they “concurred that something must be done about this issue. Politically, that’s another issue altogether. But privately, I’ve heard on numerous occasions that ‘I agree with you, but it’s extremely difficult for us to do anything about this.’ ”

Watch the interview here:

http://bcove.me/zqumtflh

And watch a panel discussion, with energy expert Amy Myers Jaffe and others:

http://bcove.me/pv6gdyym

Is what’s good for the affluent also good for consumer fuel choice?

Rodin3.jpgYou and I want to be called rational. We want to believe that with solid analysis, most things are predictable by smart people in this complex world of ours. Are they? I thought about this after reading a recent interview with a noted futurist at Mercedes-Benz, Eric Larsen.

My conclusion, based on his view of the future of cars and transportation fuels, is that his thinking — while provocative — is too tidy, often too rational and many times likely wrong. His comments brought back the words of Matthew Arnold, “We do not do what we ought; what we ought not, we do; and lean upon the thought; that chance will bring us through” – a variation on chaos theory.

Let’s together go through some of Larsen’s views, which, at times, I have taken the liberty to paraphrase or summarize (fairly, I hope).

Larsen: Continued suburban growth, wealth and American family needs will support and create demand for large vehicles.

In making an argument for large cars, Larsen indicates that the suburbs will be around for a long time and that young people will want children and home-based lives, with lots of space around them. They will fill up a car with kids, dogs and stuff from big-box supply stores. That means people will still want big cars. Conversely, rich people want luxury, based on their income and their desire to show off. He indicates, In our new AMG model we have an idea of, one man, one engine. Although he doesn’t use the term, according to Larsen, wealthy people are somewhat schizoid. They want to show they care about the world, and to do this many often buy the more-expensive Prius or provide a niche market for Tesla. But they go back and forth between doing good and doing what their wealth permits and their status seems to generate, a desire for big, technologically contemporary cars. Wealth is so tough to manage! No wonder psychiatrists charge big bucks.

Kaplan: While America’s love for the big car remains a legacy of the good ‘old days when gasoline prices were low for long periods of time and incomes were growing – contrary to Larsen – habits, income and demography seem to be changing slowly, but nevertheless changing, and the result may lead to less suburban growth, more atypical families and less income for gasoline, particularly among low and moderate income families. In this context, smaller cars that behave more parsimonious with gas will likely show a visible uptick in sales, over time. Ladies and gentleman, place your bets on where prices will be in one, two, three or more years out. Make a fair guesstimate on trends concerning vehicle popularity and fuel use (your guesses will be no worse than what the experts predict). The odds are that gas prices will return to their “normal” highs and smaller cars that use alternative fuels will take a larger share of the market.

Larsen: Fracking has been a strong influence, keeping gas prices low.

Kaplan: Sure, fracking has led to higher levels of oil production in the U.S. and softened the market for gasoline, but lower prices (already on the rise again) relate to much more than fracking. They include: lower consumer demand, increased global supply of oil, the changing value of the dollar, the decision of the Saudis to avoid lowering production and to keep prices low to secure increased market penetration, etc. Most frackers did not anticipate the recent significant drop in the cost to consumers at the pump. Quite the contrary!

Larsen: Internal combustion engines are getting better mileage.

Kaplan: Yes, they are getting better mileage, thanks in part to CAFE standards and thanks in part to technology. New cars also emit less pollutants and GHG emissions. So what’s the rub?

Internal combustion engines using gasoline are likely to always generate more pollutants, and more GHG emissions than the alternative fuels now on the market. Dependence on gasoline because of reliance on non-flex-fuel internal combustion engines will also continue to lead the United States into military conflict to safeguard our own and our allies need for oil. Big cars pushed by Larsen, for the most part, continue to be gas guzzlers. Larsen is right to suggest that use of alternative fuels, including natural gas and electricity, instead of gasoline in bigger and newer luxury cars will help mitigate their present negative environmental, economic and security impacts. I am sorry he didn’t extend his comments to converting older big cars to flex-fuel status so they could use other alternative fuels that he seems to favor.

Larsen: [In context of his support of larger cars] natural gas is a cleaner fuel and easier to install from a technical point of view.

Kaplan: Larsen’s comment is basically correct for new cars and cars aimed at a luxury market. The fuel is cleaner than gasoline and installation of CNG equipment, when building a new car from the ground up, is not difficult. However, CNG, at the present time, adds about $8,000 or more to the price of a vehicle – whether new or converted – which prices them out of the market for most low- and moderate-income families.

Thanks to the leadership of the governors of Colorado and Oklahoma, a bipartisan demonstration is going on in 22 states. It focuses on replacing older state cars in fleets with Detroit-produced CNG vehicles. One of the key objectives of the effort is to see if building demand among states can get Detroit to develop a CNG fueled car that fits the budgets of more than just a relatively few Americans.

An equally promising initiative that would convert natural gas to ethanol is now being considered by both business, political, and foundation leaders across the nation. Ethanol, while not perfect, is a better, cheaper and more environmentally friendly fuel than gasoline. Its use requires a flex-fuel vehicle. Together, both will meet Mr. Larsen’s priorities. They will clearly reach the pocketbooks of the rich and famous. Happily, although not apparently Larsen’s major concern, both together will also reach the budgets of many low- and moderate-income households.

Larsen: Refueling with gasoline takes five minutes, once a week. People have anxiety about running out of fuel with electric cars. Tesla, cities and garages are building charging stations. But will they be sufficient?

Kaplan: Electric cars will become more popular as the price comes down, batteries provide fuel for longer driving distances, more infrastructure is developed by the private sector. Larsen’s question, if electric cars become popular, are they really going to put a charger in every space in the garage, is a bit specious. Not every corner has a gas station and not every space in a garage needs to include a charging station. Greater mileage from batteries on a single charge will generate (excuse the play on words) the ultimate distribution of charging stations in garages and, indeed, on roads and freeways.

Larsen: Hybrids can do well in the suburbs, where everyone could have a charging station in the garage, with rooftop solar panels to produce electricity.

Kaplan: Clearly, Larsen would not be a good candidate for a coming-back-to-the-city initiative. Indeed, his apparent views do not fit the movement back to cities at the present time on the part of many diverse households in America. Irrespective, someday soon, solar panels will charge stations in different locations to fuel hybrids and electric vehicles. If panels succeed in the suburbs, they can also succeed in cities (please try singing to the tune of “New York, New York” … if you can do it here, you can do anywhere). The sun has not been appropriated by suburbanites.

Larsen works as research director at Mercedes, which probably colors his views of urban America, the demand for luxury cars and fuel options. His perceptions of where we are as a nation regarding alternative fuels is narrow and seemingly limited. But he has raised some interesting observations related to the roles of demography, place of residence, and income to car buying and consumer choices regarding fuels. I wish he was less dogmatic, more expansive and less riveted intellectually by his experience at Mercedes. We need to introduce him to chaos theory and more alternative fuels.

corn ethanol_field

EPA’s ethanol ruling pleases no one

Nobody is happy with the EPA’s ruling on ethanol’s Renewable Fuel Standard made last week. The agency finally published its numbers after dodging the issue for two years and falling far behind on its legal obligations.

“It’s Christmas in May for Big Oil,” said Republican Sen. Chuck Grassley of Iowa. “President Obama’s EPA continues to buy into Big Oil’s argument that the infrastructure isn’t in place to handle the fuel volume required by law. What happened to the president who claimed to support biofuels? He seems to have disappeared, to the detriment of consumers and our country’s fuel needs.”

Gov. Terry Branstad of Iowa, also a Republican, was not quite so negative. “We are disappointed that the EPA failed to follow the renewable volume levels set by Congress,” he said. “But we’re encouraged that the agency has provided some stability for producers by releasing a new RFS proposal, and made slight increases from their previous proposal.”

Even the question of whether the EPA’s new standard represents an increase or a decrease in the required amount of ethanol is under dispute. The original law, passed by Congress in 2007, specified that oil refiners were to absorb 14 billion gallons by 2013, 17 billion by 2014 and 19 billion this year. By 2013, however, it became obvious that the country would be unable to absorb 14 billion gallons without spilling over the “blend wall,” the standard of 10 percent ethanol that’s blended into virtually all gasoline in the U.S. There are concerns that some older vehicles can’t handle higher ethanol blends beyond E10 without sustaining damage to parts.

“By adopting the oil company narrative regarding the ability of the market to effectively distribute increasing volumes of renewable fuels, rather than putting the RFS back on track, the Agency has created its own slower, more costly, and ultimately diminished track for renewable fuels in this country,” Bob Dinneen, president and CEO of the Renewable Fuels Association, said in a statement.

The critics seem to have a point. Blends of E15 (up to 15 percent ethanol) and E85 are being sold across the country without any difficulties. Cars built since model year 2001 are approved to run on E15, and about one-third of automobiles are now flex-fuel, meaning they can tolerate any ethanol blend, up to E85. But the EPA has stuck with the “blend wall” in order to accommodate the oil refiners and automakers, who say they will not honor warranties on engines that might be damaged by ethanol.

The EPA standards announced last week are: 15.93 billion gallons for 2014 (that approximates actual sales for that year), 16.3 billion for 2015 and 17.4 billion for 2017. All these figures are about 5 billion gallons below the original statutory requirements. The last two have caused the most controversy. Ethanol supporters say the EPA is bound by the number in the 2007 law — even though there is a waiver provision. But critics who want to cut back on ethanol use argue that the figure is actually increasing from year to year and is only considered a reduction because it doesn’t match the original projections if 2007.

Really, it’s kind of ridiculous to think that Congress could predict exactly how much ethanol could be sold eight years hence. Typically, they made straight-line projections and assumed that gasoline consumption would hit 160 billion gallons per year by this time and keep going up. In fact, gasoline consumption started to drop almost the minute Congress passed the law, resulting from both improved fleet mileage and the reduction in driving that came with the recession. It now stands at 140 billion gallons. Had the law simply specified that ethanol consumption should be 10 percent of all gasoline consumption, there would be nothing to argue about.

The other place where the law is completely out of whack is in the mandates for non-corn ethanol made from cellulosic materials. At the time it was anticipated that cellulosic ethanol was right around the corner, and Congress specified that consumption should be 3.75 billion gallons in 2014, 7.2 billion gallons by 2017 and 21 billion gallons by 2022. In fact, the cellulosic-ethanol industry produced only 1.9 billion gallons in 2014 and has not increased much since. At one point, the EPA was actually fining oil refiners for not using a fuel that didn’t exist.

There’s little reason for either Congress or the EPA to be meddling in the ethanol market. Ethanol has established itself as an oxygenator and high-octane additive since the banning of MTBE. It would probably be added at a rate of around 10 percent, even without the mandates. E85 has a big price advantage over gasoline and would sell more if it were available. Last week, on the same day that the EPA published its new proposed Renewable Fuel Standard benchmarks, the Department of Agriculture pledged to match state funds for $100 million for the construction of new fueling stations designed to dispense E85. The fuel is very popular in the Midwest and would probably attract customers in other areas if it were easily accessible.

Finally, an export market for American corn ethanol is starting to take shape. Brazil mandates 35 percent of its fuel must be ethanol, but it has had problems with its sugar harvest and has started to import from the U.S. Europe is also getting big on ethanol and is looking across the Atlantic for new supplies.

Ethanol has proved its worth as a fuel additive and possibly as a gasoline substitute as well. All the sturm and drang over the EPA mandates have very little to do with the future of the industry.