With the new year we’ve moved into the next phase of mandated ethanol blending in gasoline and that’s probably going to be of particular interest to a sizable group of voters in the SEC primary. Which group in particular? We’ll get to that in a moment, but first I wanted to take a look at the specifics of the 2016 Renewable Fuel Standard mandates and how they are already failing in their own stated goals. American Action Forum has the details.
As we enter 2016, Americans must now comply with the new Renewable Fuel Standard (RFS) volumes, which were set late last year. The latest iteration of the regulation calls for 18.11 billion gallons of renewable fuel to be blended with gasoline, an amount over 4 billion gallons short of the EPA’s original target of 22.25 gallons. The final regulation shows that the EPA has failed once again to get the RFS on track to comply with the goals of the Energy Policy Act. As the EPA struggles to find enough renewable fuel to meet its goals, it may be time to consider a reset on this costly, uncertain, and challenging regulation…
The RFS has an impact on fuel prices. Ethanol is more expensive per gallon than gasoline. The current fuel prices (dated 1/27/16) are $1.05/gallon for RBOB gasoline (Reformulated Gasoline Blendstock for Oxygen Blending), and $1.40/gallon for ethanol.* Ethanol also has a lower energy density than gasoline (reflected in fuel efficiency), and it takes 1.51 gallons of ethanol to achieve the energy of a single gallon of gasoline, meaning at current prices it costs $1.06 more for the same amount of energy. The latest RFS will require 14.5 billion gallons of ethanol to be blended, which will have the energy equivalent of 9.6 billion gallons of gasoline. If the cost difference continues to be around $0.35/gallon higher for ethanol, then the RFS could end up costing consumers around $10 billion in 2016. Even if the gap compresses to around $0.20 (what was originally projected for 2016), the costs would still be around $9 billion.
The blending gap is slowly but surely being felt, though current, rock bottom oil prices around the globe are muting the effect on prices at the pump for now. But there are more concerns regarding ethanol than the bite out of your wallet, and they are of particular interest to fisherman and boaters… the “boater voters” if you prefer. (This segment of the voting population is even more massive in the south than other parts of the nation.) Over the years, we’ve seen a constant stream of complaints from outdoor sports enthusiasts, such as this one which warns that ethanol is deadly for outboard motors.
Just when you believe government regulations can’t get any more bizarre, intrusive, or anti-business, along comes the EPA opening the way for E15 gasoline…
Although all major manufacturers of outboard motors reports their engines run just fine on E10 fuel (E15 support is doubtful, and, in fact, may void warrantees), spokespersons for those same companies know that in the real world of fishing and boating, ethanol-added fuel has been a disaster.
Their complaints come from real world experience and are very specific to the boating community, but also apply to most other small engines. They include:
- Ethanol is hygroscopic, meaning it has a strong attraction to moisture.
- Ethanol increases the amount of water accumulating in fuel tanks.
- Ethanol produces less energy (BTUs) than an equivalent unit of gasoline.
- Ethanol fuel’s usable life span may be less than the normal length of off-season boat storage.
Sure… for most pundits this topic isn’t even going to crack the top twenty as we deal with terrorism, out of control federal spending, crime rates and foreign policy debacles. But it’s just the sort of wallet based issue which too often gets ignored by the media and political candidates as regular, middle class voters continue to quietly steam in the background. We should be asking more out of our candidates on subjects which have a real world impact on the day to day lives of those who must labor under these rules.