My good friend and personal-watercraft government relations guru John Donaldson just sent me this update on an imminent decision concerning increasing the ethanol content in fuel from the present 10% to a proposed 15%.
Many of you are probably aware of the concerns the marine industry has over increased ethanol usage, not the least of which is gummed-up carburetors, brittle fuel hoses, and alcohol’s tendency to attract water. My own boat recently experienced this problem firsthand, and the result is I’m looking at a carburetor rebuild.
I’ll admit I don’t always agree with John’s politics. His research into these issues, however, is excellent. For those that are interested, I’m reprinting his latest update in its entirety:
Alternate fuels update for November 2009
A look at alternate motor fuels and renewable/green energy particularly as it may impact the power sports and utility vehicle industries.
A reminder at the start of this update: this monthly update came about because the U.S. EPA accepted a petition from an ethanol refiners’ association – Growth Energy – that asked for the permissible ethanol content of gasoline motor fuel to be increased from the present 10% level to 15%. EPA has previously said the decision will be announced on December 1st, 2009.
Note on the timing of this month’s update. This update is being distributed ahead of the EPA decision that is scheduled to be announced immediately after the long Thanksgiving weekend.
The President and the administration
Toward the end of November, as the Dec. 1st “deadline” approaches, a high level EPA official may have been hinting at the EPA decision process when she described the tens of thousands of public comments submitted with regard to increasing the percentage of ethanol content permissible in motor fuel. The hint could well be the EPA’s early notice of a delay in issuing a ruling. Despite statutory requirements for an agency to respond to a petition, the EPA frequently postpones rulings.
Fed. Legislative and Regulatory action
Also in the last week of the month, the Senator Grassley, (R-Iowa), issued a statement that a permissible ethanol blend level of 11% or 12% would be a reasonable compromise from EPA. This is the first high level elected official to make a statement of a precise level of ethanol blend increase. The petitioners have not made any such statements nor has the EPA mentioned any specific percentage they would consider as an alternative.
This is intriguing because the statement has no prior discussion and it is made within 10 working days of the EPA deadline. Is the senator making a last minute negotiation in the media or does he know the answer and want to get media attention for having such insight?
Or has the Administration traded his vote for say, health care, in exchange for an EPA finding for a one or two percent increase in the ethanol blend.
Other possible influences on the EPA decision
The largest U.S. ethanol refiner has announced a refining process that will allow them to produce the so called cellulosic ethanol [ethanol made in this case from corn cobs, not the corn itself] at a cost that is competitive with corn ethanol. The company claims they will have a commercial level refinery in operation by 2011.
This has been a goal sought by the ethanol industry for years. Such a break through would open the door to meet a second federal mandate for so called second generation renewable fuels. The government has put a significant emphasis on the development and utilization of this product as part of the national renewable fuel standards. The result of this development will be an increased inducement for EPA to raise the permissible level of ethanol to accommodate the millions of gallons of ethanol that this process will add to the potential ethanol inventory.
EPA will make an announcement of some sort on Tuesday, Dec. 1, 2009. The announcement may regard a delay in making a decision, or a decision on the petition. The federal government usually is deliberate in a decision making process such as this, which is to say it would not be unusual for the EPA to delay making a final ruling. However, looking ahead into 2010, it would be difficult to think how a delay would benefit the Administration or the petitioners.
It is my observation that not a single Administration official or member of Congress has spoken against the petition – while numerous members of both these branches of government have spoken in favor of increased use of ethanol. Will this bias in Washington sway EPA? Will there have been behind-the-scenes vote trading? Will there be a long phase schedule for a gradual increase in the ethanol percentage?